But the feasibility study for Marinus Link set the scene for a looming clash between coal and renewable energy. It found the economics of the project, with an estimated cost of $4.5 billion including the Battery of the Nation hydro scheme, were only viable if a huge volume of coal fire power exited the national electricity grid.
“The largest single influencing factor in the economic viability… is the trajectory of coal-fired generation retirement,” the study said. “The benefits of Marinus Link are likely to be greater than costs when approximately 7000 megawatts of the national electricity market’s present coal-fired capacity retires.”
NSW produces about 8000MW of coal power, while Victoria produces about 450MW.
During the 2019 federal election Prime Minister Scott Morrison committed $56 million to develop the Marinus Link, and the Liberal Party won crucial victories in the seats of Bass and Braddon.
Signalling a softening in support for coal power would reverse the Morrison government’s policy. Last year it pressured private operator AGL into extending the lifespan of the ageing Liddell plant, it intends to fund a $4 million study into a new coal plant in North Queensland where it retained key electorates in 2019, and its $1 billion Grid Reliability Fund is open to invest in new coal generation.
Energy and Emissions Reduction Minister Angus Taylor did not indicate if the Marinus project would influence the Morrison government’s energy policy, but said it was “essential” to build the “right transmission and storage projects”. Mr Taylor said negotiations over an energy deal between Tasmania and the Commonwealth are “progressing well”.
Green Energy Markets analyst Tristan Edis said Tasmania’s plans “absolutely make sense” as an insurance against coal power failures, or if the government was looking to decarbonise the energy sector to meet its emissions reduction commitments under the Paris Agreement.
“It’s more about the long term and if the coal power stations cark it before we expect them to, that’s a risk where Marinus provides insurance and you pay a bit of a premium for it,” Mr Edis said.
The Morrison government’s National COVID-19 Coordination Commission has no plans to appoint an expert in renewable energy, its chief executive Peter Harris told a Senate inquiry into the pandemic on Wednesday.
The commission’s executive chairman Neville Power, the former chief of Fortescue Metals, has backed a fertiliser project while former Dow Chemicals chief Andrew Liveris, a director of Saudi oil giant Aramco who is advising the commission, has pushed for a federal government boost to natural gas pipelines.
Asked if there was anyone on the commission from the renewable energy sector – or if there were plans to add any new commissioners – Mr Harris said he had received “no formal request” to do so.
Department of Prime Minister and Cabinet associate secretary Stephanie Foster said the Prime Minister had been involved in discussions over which commissioners to appoint.
Mike is the climate and energy correspondent for The Age and The Sydney Morning Herald.
Dana is health and industrial relations reporter for The Sydney Morning Herald and The Age.