Australia’s green bank has approved its biggest-ever investment – a $3.8 billion loan for the construction of a giant undersea power cable between the mainland and Tasmania’s vast hydroelectric dams.
The record loan from the Albanese government’s Clean Energy Finance Corporation, announced this morning, will help build the 345-kilometre Marinus Link inter-connector, the second high-voltage undersea and underground cable to cross the Bass Strait connecting Tasmania’s grid with Victoria’s Gippsland region.
The vessel Leonardo da Vinci will be used to lay the Marinus Link electricity cable between Tasmania and Victoria.
Jointly owned by the federal, Victorian and Tasmanian governments, the Marinus Link company agreed to proceed with the $5 billion project last month. The loan enabled it to reach financial closure on the first stage of the project, the company said, adding that it had given contractors notice to begin pre-construction works.
“Marinus Link stage 1 is now fully funded,” chief executive Stephanie McGregor said. Construction is set to begin in 2026, with the first stage due to be completed by 2030.
Tasmania is rich in renewable energy, sourcing most of its electricity from dozens of hydroelectric dams, which release water downhill to spin turbines and create energy.
For mainland Australia’s populous southeastern states, building the new cable is considered vital to help replace retiring coal-fired power stations in Victoria and NSW by enabling more renewable electricity to flow from Tasmania.
Minister for Climate Change and Energy Chris Bowen has backed the project.Credit: Alex Ellinghausen
This will be especially important to meet demand after the sun sets in the evenings and output from solar panels recedes, a problem that currently causes power prices to spike.
The link will also allow electricity flow in the other direction, giving large industrial energy users in Tasmania more access to low-cost wind and solar resources from the mainland, its backers say.
Federal Climate and Energy Minister Chris Bowen said it was “one of the most important energy projects in our nation’s history”, and was moving from “plans on paper to work on the ground”.
“Marinus Link will lead to economic benefits and job opportunities across the country, delivering cheaper, cleaner and reliable energy to and from Tasmania and the east coast of Australia,” he said.
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