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Energy and Renewables – Marinus Link

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Tuesday, 7 June 2022

Tags: Marinus Link, Renewable Energy

Dr WOODRUFF - Minister, the federal election was a comprehensive vote for climate action, and it really spoke about the nine years of failure by the Liberals at the federal level on climate action and low electricity prices.

What Angus Taylor has gifted us is 30 per cent of coal fired power stations offline in New South Wales at the moment, no plan for transition, and we have no confidence that the deals that he made while he was federal minister are in the best interests of Tasmanians, low electricity prices and, especially, looking after our climate emissions.

I want you to explain why Tasmanians, with the current arrangements that are being proposed for Marinus, would be paying for the infrastructure that does not benefit them.

Mr BARNETT - I beg to disagree with you to indicate that the agreements that have been signed between Tasmania and the former federal government, which are on the public record with respect to Marinus Link, Battery of the Nation and green hydrogen are all in Tasmania's best interests, because they will put downward pressure on electricity prices, improve energy security, create more jobs and deliver a cleaner world.

In terms of Marinus Link, the funding is now locked in through to financial investment decisions in December 2024. That means the design and approval processes will continue through to that time, when a final investment decision is required to be made.

With Battery of the Nation, there is funding support from the federal government, some $65 million, matching our $58 million from Hydro Tasmania to redevelop the Tarraleah power station. We are talking about 100 jobs commencing, all being well, towards the end of this year. Then during the construction phase, the $700 million redevelopment in the Central Highlands, which is so important to the Central Highlands, will deliver 250-plus jobs during that two to three years of redevelopment.

In addition to that, the funding support from the federal government we have secured is $70 million, matching our funding support as well for Bell Bay to be a green hydrogen hub. If you talk to the businesses and families in and around northern Tasmania, I think they would certainly beg to disagree with you there as well. They are very much looking forward to a green hydrogen hub being developed at Bell Bay.

Dr WOODRUFF - Thank you for not answering my question. You do a very good job of talking out the time. People who are watching would be interested to hear that response, because it does not get to the nub of the question.

The question is that Tasmanians will be paying for part of the Marinus infrastructure, that none of the agreements that have been made have ever put on the table, how much Tasmanians will pay. All of the renewables power and profits will go offshore - so tell to Tasmanians, how they are going to benefit in lower electricity prices from the deals that you are doing secretly?

Mr BARNETT - I reject much of what you have said; but I will try and answer the various parts of the many questions that you have just put to me. If there is time I would be delighted to respond to all of your questions and I will attempt to do so.

Dr WOODRUFF - One statement and one question.

Mr BARNETT - In terms of Marinus Link, the funding is locked in through to the financial investment decision in 2024. The project is deemed an actionable project by the Independent Regulator which says it is a national infrastructure project. It will be a regulated transmission system, which means you get a return on funds invested. As a Government, we have always said that we shouldn't pay more than our fair share.

Dr WOODRUFF - What is our fair share? That is the question. What is the amount we will be paying?

CHAIR - The minister has the call.

Mr BARNETT - I am trying to assist you and those who are listening to understand the process. As a regulated project and transmission asset, a return on funds invested is delivered and it is deemed commercially beneficial to the national electricity market. It is not me saying that - it's the independent regulator. They say it's a $4.6 billion benefit to the national electricity market. When you ask what are the benefits for Tasmania, it will go to Tasmania and the national electricity market delivering downward pressure on prices, improved energy security, obviously more jobs, and in terms of the environment, with Marinus Link 140 million tonnes of CO2 will be removed from the atmosphere over the life of the project.

Dr WOODRUFF - You didn't address the cost. How much is being discussed for the cost to Tasmanians proportionate of the total amount of the project? Since you wouldn't have a final figure, what proportions are being traded away at the moment? People would like to know.

Mr BARNETT - As part of the agreement we made with the Australian Government that we would make an application to the Australian Energy Market Commission in terms of the cost allocation, which goes to the hub of your question. We have achieved the support of the Australian Government for our application to the Australian Energy Market Commission to ensure we get a fair cost allocation for Tasmanians. That process has now commenced.

Dr WOODRUFF - Is it fair to say there isn't actually an outcome? There is no money that has been discussed at the moment. It is a conversation that is still evolving?

Mr BARNETT - An application needs to be made and then it needs to be considered by the Australian Energy Market Commission and responded to by the Commission. We have the Australian Government support for that, which is important to note.

Dr WOODRUFF - Minister, how is Tasmania going to be able to transition to an all electric and circular economy without keeping all of the power that we produce on island?

Mr BARNETT - Thank you for the question. Our policy is to grow our renewable energy credentials from 100 per cent fully self-sufficient in renewable energy and electricity through to 200 per cent by 2040; 150 per cent by 2030. We are on track with the Granville Harbour Wind Farm and Cattle Hill Wind Farm now being online. That's growing our options. In terms of what's underway and planned there are a very significant amount of new renewable energy developments proposed. There's pumped hydro and green hydrogen. We have significant plans to grow our opportunities. Having the opportunity to export our excess electricity to the mainland will also deliver improved energy security, downward pressure on prices and more jobs.

Dr WOODRUFF - The argument for Marinus is for it to be exported to the mainland. That is the purpose of trying to get funding for a second interconnector. The whole point of putting billions of dollars investment in is so that we can export. While we're doing that, we're not able to retain the power on island for our own needs to transition. Why are we pretending that we're going to be able to have a circular economy when we're asking to export it?

Mr BARNETT - We support the circular economy, just to answer the last point of your question. I commend Mr Jaensch for his commitments and his initiatives in that space as well as our efforts on bioenergy and replacement of boilers.

Dr WOODRUFF - I was talking about climate economy, sorry, not waste.

Mr BARNETT - You mentioned circular economy.

Dr WOODRUFF - Yes, I know. It is a bigger term, but yes.

Mr BARNETT - Thank you for that. We want to export our excess energy through Marinus Link but we also want the flexibility, so we will be buying and selling across Marinus Link, as we do across Basslink. It will certainly improve energy security. I hope that you will agree with that. Marinus Link will unlock more renewable energy developments in Tasmania, so that we would expect a significant increase in the opportunity for more wind developments, more pumped hydro developments and the opportunity for green hydrogen. It complements the development and establishment of a green hydrogen industry in Tasmania.

Dr WOODRUFF - Why is TasNetworks undergrounding the entire Victorian end of Marinus Link but it's refusing to listen to the community in Tasmania and do the same here?

Mr BARNETT - Because TasNetworks, through Marinus Link, has the same policy approach. It's underground through to Heybridge on the north west coast and then likewise in Victoria. Regarding the north west transmission system, TasNetworks has advised that when determining the type of infrastructure to be built it considers individual landholder impacts together with economic constructability and environmental impacts to ensure development occurs in a balanced and sustainable way. Advice from TasNetworks is that undergrounding at the north west transmission developments is likely to significantly be more expensive with potential to exacerbate impacts on landowners through the construction and operation phase. The indicative cost estimates are that undergrounding would involve cost increases of 7-10 times overhead transmission. So there's a whole range of reasons to assist the member.

Dr WOODRUFF - Those costs are the same in Victoria. The difference is that Victoria has stronger environmental legislation and a stronger community action when it comes to this sort of infrastructure than we do in Tasmania. You probably didn't hear that question. The difference is that the laws in Tasmania and the situation in Tasmania make it much easier for TasNetworks to get away with having to spend that money, whereas in Victoria they're required to do that. The government wouldn't suffer them to do otherwise, on behalf of the community and the environment.

Mr BARNETT - I think it's fair to say that obviously TasNetworks wants to get the best economic and environmental outcome for the state of Tasmania. In terms of Victoria, they're operating in an environment that needs to ensure that there is a balanced approach.

Dr WOODRUFF - That doesn't make any sense. What you're saying is that Victoria has stronger laws, they've got stronger push-back. In Tasmania, you've got it all stitched up. You can basically let them go and trash the joint and there's no requirement to do otherwise.

Mr BARNETT - Thanks for the question. I was just taking advice. It's the high-voltage direct current that needs to be taken all the way underground in Victoria and likewise to Heybridge on the north west coast, so it's like-for-like. So, you're comparing apples and oranges, and I'm wanting to make sure we compare apples and apples.

Dr WOODRUFF - No, I don't think so, but that's a nice get-out for you from your staff. You should thank them for that later.


Dr WOODRUFF - Minister, I want to ask some questions on behalf of communities in the Loongana area about the Marinus Link-related transmission lines - the route from Staverton to Hampshire Hills which goes through the biodiverse Legana Valley and breaches at least half of TasNetworks' own selection criteria. It particularly fails to address the costs to the climate and biodiversity through the permanent and extensive land clearing, the new roads, the increased traffic, the death of the forest that will occur because of the drying of forest, the pollution, the impacts on the wildlife and forest and the increased fire risk to communities, to name a few.

Why have the state Government and TasNetworks not adopted climate and biodiversity priorities guiding principles for these projects?

CHAIR - I will remind members again that the time for GBE estimates is later in the year. There will be an opportunity to ask questions regarding GBEs with GBE staff in attendance at that time but if the minister has any comments related to the Budget in that question, I am sure he will be able to answer them.

Mr BARNETT - Thank you very much, Chair. To indicate in terms of community concerns as a government, we absolutely support strong community engagement between TasNetworks, Marinus Link and indeed any proponent in the renewable energy space. I have been a very strong advocate of the importance of community engagement. I have made that very clear to TasNetworks and all of the relevant renewable energy proponents. In terms of the concerns you have raised around the environment, of course there are very important values that need to be respected. To make it very clear, there is an approval process that needs to take place - environment and planning approval processes - and we expect TasNetworks to meet those high standards that are applied.

Dr WOODRUFF - Minister, will you rule out the compulsory acquisition of land for that route over private and covenanted land, for example? That would be a comprehensive breach of just what you said were the necessary environment guidelines.

Mr BARNETT - Can I make it clear, it would not appropriate for a Minister, me or any other minister, to be ruling anything in or out. What we would be expecting is the proponent, in this case, TasNetworks, to be operating consistent with the rules and regulations and the environment and planning approval processes.

As I have said, I have made it clear, that community engagement is a priority for our government. We expect that those robust processes for land and any interest in that land, such as easements, may be acquired by certain authorities using the provisions of the Land Acquisition Act that applies not just to TasNetworks but other proponents as well. In terms of TasNetworks, those authorities include the Crown, public authorities and local councils. They also include electricity entities, licenced under the Electricity Supply Industry Act 1995, whose acquisitions are subject to express ministerial authorisation. As I say, I was referring to the Land Acquisition Act 1993.

Similar provisions apply under legislation governing gas infrastructure, for example. Neither gas legislation or electricity legislation gives preferential treatment to government owned utilities. Private sector businesses that are licensed to provide utilities infrastructure for gas or electricity are treated equally. Using the compulsory acquisition powers is not a new or unusual approach and has been followed by my predecessors in this role under successive governments when utilities infrastructure is being considered.

The government is keen to work with TasNetworks, renewable energy proponents and interested parties such as the Tasmanian Farmers and Grazier's Association to develop best outcomes for the community in a way that recognises and respects the rights of individuals and landowners. The advantage of using the well-established provisions of the Land Acquisition Act 1993 is that it provides independent oversight of the acquisition and compensation process with significant safeguards for affected landowners.

Dr WOODRUFF - You mentioned then that you would working with the TFGA and I think the community would be grateful to hear that there would be a focus on working with the Loongana community about these issues, not just with a peak body because that community is the one that is directly affected. Can you give a commitment that you would do that?

Mr BARNETT - I am the minister and my door is always open to anyone in the community with respect to energy and renewables and my various other portfolios. I work hard to listen and learn and I have made it clear to TasNetworks the importance of community engagement. I expect them to meet the high standards that we set as a Government and the direction of the minister.

Mr WOOD - Minister, can you please provide an update on project Marunis?

Mr BARNETT - Yes, I have been assisting honourable members -

Dr WOODRUFF - How much it will cost Tasmanians would be great to know.

Mr BARNETT - It is important because it is a key national infrastructure, the independent regulator, the Australian energy market organisation has highlighted the importance of it as an actionable project. Meaning, they weigh up the costs and the benefits and they can see some $4.6 billion of benefit for the project for the national electricity market. It enables access to least cost energy for customers across the electricity market in Tasmania, including in new industry like green hydrogen as I have mentioned earlier. It provides that support for energy security, and indeed underpins the Government's ambitious 200 per cent target. It is consistent with going from 100 per cent to 200 per cent, and it supports that significant increase in new wind generation, unlocks Tasmania's deep hydro storage potential, and enables the export of our surplus energy production that would otherwise not be used.

Mr Chair, through you, for Bass Strait interconnection, access to diversity of supply and clean energy sources will enable the Tasmanian green hydrogen industry to grow. Marinus supports new green hydrogen, it is complementary to the establishment of a green hydrogen industry at Bell Bay, and keeping the lights on in the mainland when the wind drops and the sun goes down, the conventional battery storage will run out. I should make the point that Tasmania is and can be the battery of the nation, because we have that deep storage that is complementary to batteries which provide that short provision of electricity. What the nation needs is short, medium, and long available duration electricity, and Tasmania's battery is ideal for that.

Dr WOODRUFF - Minister, TasNetworks' business plan is to become a sole builder of transmission lines for new wind farms to connect to the mainland grid. How is this not a clear conflict of interest when they are also, at the same time, the Tasmanian jurisdictional planner for the National Electricity Market?

CHAIR - Dr Woodruff, I will remind you again that TasNetworks is a government business enterprise -

Dr WOODRUFF - Chair, thank you very much.

CHAIR - and I would appreciate you not interjecting on the Chair as well. There will be an opportunity later in the year to ask about Government Business Enterprises. If there are matters in your question that pertain to the Budget, the minister will be able to answer that. We don't have any staff from TasNetworks available here so I give the opportunity to the minister as relevant.

Dr WOODRUFF - For clarification, this is a new ruling by you, as Chair, in this position. In every other Estimates committee I have been in, we can ask the minister any question we want in relation to the energy portfolio. He is the minister responsible for energy and renewable energy in Tasmania. My question is entirely germane to the situation for renewable energy in Tasmania.

I am reflecting on the history of this place and the opportunity that members have, as our right, to ask questions of the energy minister in this portfolio.

CHAIR - I appreciate your input, Dr Woodruff. I, too, am aware of the history of Budget Estimates committees as well as the history of Government Business Enterprise committees and the practice of this place is that Budget questions are in the Budget Estimates committee, and Government Business Enterprises questions are in the Government Business Enterprise committee. You asked a question about Government Business Enterprises. If there are matters pertaining to the Budget, the minister will be able to answer that as relevant.

Dr WOODRUFF - Thank you, Chair. I asked a question about the National Electricity Market and that is why I asked the Minister for Energy.

Mr BARNETT - Through you, Chair, it seemed to be a reasonably lengthy question with a good amount of it referring to -

Dr WOODRUFF - It was very short, three lines.

Mr BARNETT - Do you want to repeat your three lines?

Dr WOODRUFF - Yes, sure. TasNetworks' business plan is to become a sole builder of transmission lines for new wind farms to connect to the mainland grid and how is that not a clear conflict of interest when they are also, at the same time, the Tasmanian jurisdictional planner for the National Electricity Market?

Mr BARNETT - Obviously it relates specifically to TasNetworks because, as the Tasmanian Government response, we don't see that there is a conflict of interest. If there ever was a conflict of interest, it would need to be managed and managed very clearly.

I have made it very clear that TasNetworks is expected to abide by the rules and regulations like anybody else. In terms of any ring fencing that is required pertaining to conflict of interest, that would need to occur. I make the point that the Australian Energy Market Organisation has identified TasNetworks and has identified at least the north-west of Tasmania as a renewable energy zone and it has potential to host connections to business and households. Strengthening that network across north-west Tasmania is an important objective, not just with respect to Marinus Link but with respect to the Government's economic and environmental agenda.

Dr WOODRUFF - In relation to Marinus Link, mainland renewable proponents of wind and solar infrastructure are already locating themselves near their own markets. Why would one of them want to additionally invest in what will be expensive Tasmanian power being exported over a Marinus Link?

Mr BARNETT - It sounds consistent with the Greens opposition to Marinus Link.

Dr WOODRUFF - Incorrect, for the record.

Mr BARNETT - Let me try to answer the question. It is important to understand Marinus Link will unlock more renewable energy developments in Tasmania. It will happen; it is happening. There are a range of wind energy proponents that are looking at Tasmania to establish, some are already here, some are already progressing their environment and planning approval processes and that is very encouraging for Tasmania because we have already met the 100 per cent threshold to be fully self-sufficient in renewable energy.

We are now legislating, and as you know it has passed through the parliament without the Greens support to 200 per cent. That is part of our plan, it part of our vision and we see Marinus Link as helping to deliver on that vision, that will put downward pressure on electricity prices, it will improve energy security. It will certainly create more jobs and opportunity for Tasmanians and importantly deliver a cleaner world. When I say that, 140 million tonnes of CO2 will be removed from the atmosphere by 2040 as a result of Marinus Link.

Dr WOODRUFF - To the question, minister. Why would a mainland proponent want to buy energy from Tasmania which will be more expensive, there will be greater transmission loss than they would otherwise be able to generate and purchase from right next to their own facilities?

Mr BARNETT - I will disagree with you again. To indicate that when the wind is blowing and the sun is shining, that is excellent, when it is not there are serious issues. There is a massive need for dispatchable electricity and that is why they want Tasmania affordable reliable, clean electricity.

Dr WOODRUFF - You are talking about pumped hydro now not wind farms.

Mr BARNETT - I am making the point that the national electricity market sees a lot of benefit in Tasmania's renewable energy credentials, not just our wind but hydro being the battery of the nation to provide dispatchable energy over the coming decade. There will be thousands and thousands of megawatts required of dispatchable energy. When the wind is not blowing and the sun is not shining they will need our electricity. You have Snowy 2.0 with 2000 megawatts and you have access to Tasmania's battery which is in our hydro electricity. The Tarraleah Power Station redevelopment, 110 megawatts to 220 megawatts will increase that capacity to make it available in Tasmania and then to the mainland to benefit Tasmanians.

Dr WOODRUFF - You are still not talking about the money.

Mr BARNETT - Can I conclude because you have made these allegations so I want to refute it that there will be higher electricity prices. The whole point of Marinus Link is that there will be downward pressure on electricity prices.

Dr WOODRUFF - You say that but you are not backing it up with anything.

Mr BARNETT - I draw your attention to the Australian Energy Market Organisation reports that are available on the public record of $4.6 billion benefit. The reason they have identified Marinus Link as a priority project as an actionable project is because they look at the costs and the benefits and they say Marinus Link can deliver for benefits to the national electricity market of $4.6 billion.