Marinus Link has received approval from the Australian Energy Regulator (AER) for $3.47 billion of capital expenditure (capex) required for Stage 1 of the project.
This involves the delivery of a 750MW cable connecting Tasmania and Victoria, along with associated upgrades in north-west Tasmania through the North West Transmission Development (NWTD). A second 750MW cable will be installed as part of Stage 2 of the project.
The $3.47 billion capex figure was $27.8 million less that what was proposed by Marinus Link. Applying a reduced risk allowance, the AER has approved $921.3 million of capex for the NWTD portion – $49.8 million less than what was proposed by TasNetworks.
Marinus Link costs will be recovered through transmission charges levied on Victorian and Tasmanian electricity customers once operations commence (expected in 2030).
The AER said capex estimates had been market tested, with the regulator assuring consumers that they would “pay no more than necessary for this important project”.
Marinus Link chief executive officer Stephanie McGregor welcomed the AER’s decision as bookending the project’s assessment and planning phase, paving the way for full construction.
“We thank the AER for recognising our discipline in managing the project’s construction costs on behalf of electricity consumers,” McGregor said.
“Our role now, as a regulated company and the custodians of national energy infrastructure, is to deliver efficiently, responsibly, and ensure the benefits are enduring for all Tasmanians and Victorians.
“Preparatory works are already underway across our project footprint. This final decision gives us the confidence to take construction into full swing later this year.”
Marinus Link is hoping to gain the support of the Clean Energy Finance Corporation through a concessional finance agreement, which could lead to lower transmission charges for consumers.
TasVic Greenlink (TVGL) was awarded the last major contract for Marinus Link Stage 1 in December, with a $994 million deal to support key cable and convertor technology for the project.
TVGL – a joint venture (JV) between DT Infrastructure and Samsung C&T Corporation – will build converter stations in Heybridge, Tasmania and Hazelwood, Victoria and carry out land cable civil works spanning 90km across Gippsland in Victoria.
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