Tasmanians Deserve Straight Answers on Marinus – Not Marketing
This piece is a rebuttal to the opinion piece published in the Mercury Newspaper today from Minister for Energy, Hon Nick Duigan MP. You can read it there or in the picture attached to this post. The following is my response to his comments.
Tasmania’s energy debate should be grounded in facts, not wishful thinking. Yet the Minister for Energy’s recent defence of Marinus Link leans heavily on claims that do not withstand scrutiny – not against the National Electricity Market’s (NEM) rules, not against the government’s own modelling, and not against basic economic logic.
Tasmania is indeed a proud renewable energy state. But the Minister’s assertion that Marinus is “critical to our energy future” misrepresents why the project appears in Australian Energy Market Operator’s (AEMO) Integrated System Plan (ISP). AEMO includes Marinus because it is least‑cost for the mainland, not because Tasmania needs it for energy security. AEMO’s reliability assessments show Tasmania has no structural supply deficit, strong dispatchable capacity, and the lowest reliability risk in the NEM. While we have imported more electricity in recent years to prudently manage hydro storages, that reflects operational choices – not a dependence on Marinus to keep the lights on.
If Tasmania genuinely needs additional local supply in the future, we have not done the work to identify the lowest‑cost way to get it. No Tasmanian analysis has compared Marinus to local storage, local firming, incremental upgrades, or demand‑side solutions. Instead, Marinus has been treated as the default answer to every question – without first asking whether it is the right answer, or the cheapest one.
The Minister claims Marinus will put downward pressure on wholesale prices. This is contradicted by the government’s own Whole‑of‑State Business Case (WoSBC), which shows Tasmanian wholesale prices rise faster with Marinus than without it, gradually converging toward Victorian prices. Hydro’s increased revenue depends on Tasmanian prices rising, not falling. Presenting Marinus as a price‑lowering project is simply inconsistent with the government’s published modelling.
We are also told Marinus will “maximise our hydro resources” and deliver “significantly increased returns to the state.” But Hydro does not receive Victorian prices. It is always paid the Tasmanian Regional Reference Price (RRP), even when exporting. Hydro’s increased returns therefore come from higher Tasmanian prices and higher Tasmanian transmission charges – in other words, from Tasmanians paying more. That is not a benefit imported from interstate; it is a transfer from Tasmanian consumers to a state‑owned generator.
The Minister’s claim that Marinus will let Hydro “purchase cheap daytime solar” from Victoria is simply wrong under NEM settlement rules. Hydro pays the Tasmanian RRP, not the Victorian price. When Victorian prices go negative – as they increasingly do – Victorian generators pay AEMO. Tasmanian buyers still pay the Tasmanian price. AEMO collects the difference. Negative prices never flow across Basslink, and they will not flow across Marinus. Tasmania cannot “buy cheap solar” in the way the Minister describes.
He then pivots to Inter‑Regional Settlement Residues (IRRs), suggesting they allow Hydro – and “by extension Tasmanians” – to benefit from negative Victorian prices. But IRRs are quarterly financial instruments Hydro must pay to acquire. They are volatile, uncertain, and do not change the fact that Tasmanian consumers still pay Tasmanian prices. To present IRRs as a “direct benefit” to Tasmanians is a misuse of language. They are a hedge product, not a mechanism for households to profit from Victorian oversupply.
The Minister also claims Hydro will “sell into high Victorian prices.” Again, Hydro does not receive Victorian prices. It receives the Tasmanian RRP. To benefit from high Victorian prices, Tasmanian prices must rise too – which is exactly what the WoSBC shows. So yes, Hydro may earn more. But only because Tasmanians pay more.
The most extraordinary claim is that Marinus will add $470 million a year to the State’s bottom line. There is no published modelling, no mechanism, no NEM rule, no business case and no Budget paper that shows a $470 million annual fiscal injection. The WoSBC contains economic modelling, not cash flows. Economic modelling is not revenue. Until the government can explain who pays this $470 million, how it flows to Treasury, and why it does not appear in the Budget, the claim cannot be taken seriously.
The Minister assures us no further state funding is required for Stage 1. That is narrowly true – but incomplete. It does not cover operating costs, regulated revenue shortfalls, Stage 2, TasNetworks’ transmission upgrades, or Hydro’s increased exposure. The statement is technically correct but economically hollow.
Finally, we are told Marinus will unlock hydrogen, advanced manufacturing and new industries. These claims are speculative and unsupported by the WoSBC, the Final Investment Decision (FID) assessment or any binding commercial commitments. Hydrogen proponents have repeatedly said they need cheap electricity.
Tasmanians deserve a debate grounded in facts, not slogans. If the government believes Marinus will deliver the benefits it claims, it should publish the modelling, explain the mechanisms, and show Tasmanians exactly how the money flows. Until then, confidence is better served by honesty than by numbers that cannot be reconciled with the real economics of the NEM.