The Marinus Link undersea cable proposed to link the electricity grids of Tasmania and mainland Australia has been given the green light by its state and the federal government shareholders, in an extraordinary turn of events that could wind up sinking the Tasmania Liberal Party.
The Tasmania Liberal government, currently in caretaker mode, on Thursday night signed off on a Final Investment Decision (FID) for the state’s 17.7 per cent share in the $5 billion Marinus Link project, closely followed on Friday by the Victorian Labor government and federal Labor, which hold 33.3 per cent and 49 per cent shares, respectively.
“I’m very pleased to say that as of last night I was able to sign that new deal having received advice,” Liberal energy minister Nick Duigan told ABC Radio on Friday, bringing to a close weeks of speculation, political turmoil and debate over the fate of the project and who should decide it.
“Agreement on the FID between the Commonwealth, Victorian and Tasmanian governments marks the beginning of a series of detailed steps before Marinus Link proceeds to the construction phase,” added federal energy minister Chris Bowen.
The huge project, which in its first stage will construct a 750 megawatt undersea cable between North West Tasmania and Victoria’s Latrobe Valley is still awaiting federal environmental approval.
In June, federal environment minister Murray Watt pushed out a final decision on Marinus to July 25 – seven days ago. At the time of publication there had been no update on a decision or the timing of a decision in the EPBC portal.
Nevertheless, the “eleventh-hour decision” on FID clears a huge and critical milestone for Marinus Link, paving the way for financial close and the sealing of contracts with key project suppliers Prysmian and Hitachi that were due to expire at the end of August.
But for the state of Tasmania the move is hugely controversial, not least because it flies in the face of caretaker conventions, still in place following a snap election, that was sparked by a vote of no confidence, and from which neither party received a clear mandate to govern.
For the Rockliff government, the decision has almost certainly blown any chance of winning the support of minor parties or key independent MPs that it needs to hold power, particularly after breaking a promise to publish a whole-of-state business case for Marinus Link well before making FID.
Instead, the Liberals provided “last-minute” confidential briefings on Tuesday that included more than 1000 documents, in a move independent MP Craig Garland has slammed as an “absolutely disgraceful” approach to negotiations on a multi-billion dollar infrastructure project.
On Friday, Garland said he had contacted Premier Rockliff to inform him that he would not be signing any agreement to provide his government with confidence and supply in this parliament.
“While the premier promised to do things differently after the election, the recent handling of the Marinus Link decision tells a different story,” he said.
“It was rushed, secretive and emblematic of a government that has learned nothing.
“At this stage, I believe the only party capable of delivering stable and responsible government is the Labor Party. I look forward to continuing discussions with Mr Winter.”
Tasmania Labor leader Dean Winter supports the development of Marinus, but earlier this week declined to give his blessing on FID with such short notice from his opponent.
“Tasmanian Labor supports Marinus because it is the key to unlocking $25 billion worth of renewable energy investment in the state and it will create thousands upon thousands of safe, secure, well-paid jobs for Tasmanians,” the party said in a statement on Monday.
But it also said it would “make the mainland pay” for the hugely costly project by transferring Tasmania’s stake to the Victorian and Australian governments.
“This will save $200 million right now and help get the project moving after 11 years of inertia from the Tasmanian Liberal government,” the statement says.
For its part, Marinus Link said on Friday that it warmly welcomes the announcement from its shareholders of FID to proceed with Stage 1 of the project, which is a 750 megawatt undersea power cable.
“This marks our shareholders’ green light for the Marinus Link project,” said Marinus Link chief Stephanie McGregor in a statement on Friday.
“The coming together of three jurisdictions demonstrates Marinus Link’s truly national significance and benefit across the National Electricity Market, as well as directly to communities in Tasmania and Victoria.
“Everyone who has worked on Marinus Link from conception to now deserves credit for this historic achievement and should be incredibly proud. Your conviction will change the course of a nation,” McGregor says.
“We will continue to engage regularly with the communities and landholders along the project alignment before construction commences, which is planned for 2026.”
On this front, it is unlikely to be smooth sailing for Marinus Link, which has been decried by opponents as is “an expensive risk” for energy consumers, a white elephant of the energy transition, and a “boondoggle” that will offer “virtually no benefit to Tasmanians.”
Garland, who does not support the project, says the new link to the mainland will “lead to wind farms being developed all over Tasmania, including in locations that will have massive impacts on the environment, the community, and our Aboriginal heritage.”
“The government claims it’s got a good deal, but Tasmanian power prices will still increase to fund the construction of the North West Transmission development and the Robbins Island to Hampshire transmission line that will also impact farms, landowners, reserves, and habitat,” he wrote on Facebook on Friday.
“We don’t need Marinus for Tasmania and the costs outweigh any benefits in my view. …I’ve been fighting these issues for close to a decade and today’s announcement has only got me more fired up.”
The Bob Brown foundation, established under the name of passionate Tasmanian conservationist and the original founder and leader of the Australian Greens, has also expressed its disappointment at the news.
“Since 2018, experts have been telling us that Marinus was a dud for Tasmania, and not needed by the mainland, but yet again we see this state and federal governments fall over themselves to give a $5 billion gift to overseas-owned and backed wind farm developers,” said Bob Brown Foundation Campaigner Scott Jordan in a statement on Friday.
“Both Christine Milne and energy expert Bruce Mountain have shown that the project does not stack up economically. We know that Tasmanian households will be left footing the bill. The fact that the Rockliff Government refused to release the business case tells us that they don’t want the public to see just how bad this deal is.”
“The environment pays, the budget pays, Tasmanian families pay, and proper democratic processes pay for this $5 billion dollar freebee to foreign corporations,” said Jordan.
Meanwhile, debate continues over whether or not a government can execute a FID on such a huge project while in caretaker mode – and what advice, exactly, the Rockliff government received to suddenly make up its mind.
According to this very helpful YouTube video posted on Thursday by constitutional law expert Professor Anne Twomey, guidelines on caretaker conventions in Tasmania suggest the Rockliff government was not out of order in signing the FID.
The first point to note, Twomey says, is that caretaker conventions are not law and are therefore not legally binding.
“Paragraph one point 12 of the caretaker guidelines states that the conventions are neither legally binding nor hard and fast rules. Their application in individual cases requires sound judgment and common sense.
“In relation to major contracts, the guidelines … say that if it’s not possible to defer the commitment until after the caretaker period for legal, commercial or other reasons, the minister, after agreement with the premier, should consult the relevant opposition spokesperson regarding the commitment. Consultation does not require agreement,” Twomey says.
Marinus says construction is expected to commence in 2026, subject to final regulatory and environmental approvals.
