The federal government has launched a feasibility study into a second electricity connector between Tasmania and the mainland, which Malcolm Turnbull has said is “very likely” to prove its commercial viability.
Speaking in Tasmania on Thursday, the prime minister said he and Tasmania’s premier, Will Hodgman, believed the time had come to consider the second link because the state had “faced a very severe challenge in terms of energy supply with the breakage” in the Basslink interconnector, which is being repaired.
Tasmania has been using diesel generators to avoid brownouts – a reduction in electricity availability – and the state opposition has claimed the government has plans for enforced residential blackouts if the power crisis worsens.
Turnbull said the second connector “has got an energy security dimension, which is critically important. If you have two links, obviously if one is broken you are not completely cut off.”
Although the government has only announced a feasibility study so far, Turnbull said “we believe it is very likely to have real commercial viability” and “the inter-connector should be built as soon as it is found to be economically, commercially feasible”.
Former federal minister Warwick Smith will lead the study, working with the departments of the environment, industry, the Tasmanian government and the Clean Energy Finance Corporation (CEFC).
Turnbull explained the CEFC would be involved because the “interconnector, we believe, has the potential of being a very substantial economic asset in which [it] could invest”. He said the second connection would help spur additional investment in wind and hydro energy in Tasmania.
“The combination of hydropower ... and wind, would enable Tasmania to deliver, on a much larger scale, despatchable renewable energy right across the nation.”
“There are a number of ways in which we could support it, or indeed the private sector can support it, but an obvious avenue is the CEFC, which is established for precisely this kind of investment, and they’ll be looking at it very closely as well as part of the study.”
“The work will be undertaken immediately. We expect a progress report shortly and a final report later in the year,” he said.
