This post examines the Tasmanian Government’s and Hydro Tasmania’s governance environment – the Whole of State Business Case (WoSBC) redactions, the opaque annual report, the refusal to disclose basic financial information, and the public repetition of myths about the National Electricity Market (NEM) – and shows how these patterns have eroded transparency at a time when clarity is most needed.
I thank John Lawrence for his assistance in preparing this information, his attention to detail and research over many years as we have worked together to better understand one of the most complex areas that impact our state, economically and functionally.
Glossary of acronyms used in this chapter
FID – Final Investment Decision: The formal government decision to proceed with a major project such as Marinus Link.
IRR / IRRs – Inter‑Regional Revenues / Inter‑Regional Residues: The financial mechanism that captures price differences between NEM regions. Historically a major windfall for Hydro.
LGC – Large‑scale Generation Certificate: A renewable energy certificate created for each MWh of eligible renewable generation.
NEM – National Electricity Market: A collection of five separate regional markets linked by interconnectors.
PPA – Power Purchase Agreement: A contract to buy or sell electricity at an agreed price.
WoSBC – Whole‑of‑State Business Case: The Tasmanian Government’s business case for Marinus Link.
Chapter 15 – Governance, Secrecy, and the WoSBC: Tasmania’s Architecture of Unaccountability
By the time the government released the Marinus Whole of State Business Case (WoSBC), without the promised three months public release prior to signing off on the Final Investment Decision (FID), something had already shifted in Tasmania’s energy governance. The public could sense it, even if they couldn’t yet articulate it. The debate had become more guarded. Answers were shorter. Documents were harder to obtain. And when they did appear, they arrived with thick black redactions running across the most important pages.
The WoSBC was the moment when secrecy stopped being an occasional frustration and became a defining feature of the system. It was a major infrastructure decision with billion-dollar implications, yet the public was given only fragments of the modelling, fragments of the assumptions, and fragments of the risks. The government insisted the redactions were necessary. Hydro said the information was commercially sensitive. But the effect was unmistakable: Tasmanians were being asked to trust a decision they were not allowed to understand.
At the time, the full significance of that opacity wasn’t obvious. It is only now – with the reconstructed accounts in front of us – that the scale of what was withheld becomes clear. The financial pressures visible in the 2024/25 statements did not appear overnight. The structural Large Generation Certificates (LGC) losses, the tightening liquidity, the rising debt, the growing derivative exposures, the dependence on Inter-Regional Revenues (IRRs), the vulnerability to drought – these were not surprises. They were present, or emerging, at the time the WoSBC decision was made.
Which raises the question that now sits at the centre of Tasmania’s energy debate: what did the decision makers know, and when did they know it? If the risks were known, why were they not disclosed? If they were not known, why not? Either answer points to a failure of governance.
1. The WoSBC Model: A Black Box Masquerading as a Business Case
Even with the release of the FTI Consulting (FTI) modelling, it would be a mistake to think the WoSBC has suddenly become transparent. The FTI report is only one slice of a much larger decision-making structure, and its publication does not illuminate the machinery behind the government’s final call.
The WoSBC is not a consultant’s report. It is a whole of government decision framework that draws on multiple inputs: internal Treasury modelling, Hydro’s commercial forecasts, TasNetworks’ costings, Marinus Link Pty Ltd’s assumptions, risk assessments, fiscal exposure analysis, and scenario testing. None of that has been released. The public has been shown one consultant’s modelling of consumer benefits, but not the underlying government analysis that supposedly weighed those benefits against costs, risks, and long-term fiscal consequences.
And the FTI report itself is not a business case. It is a benefits narrative. FTI were engaged by Marinus Link, not by Treasury or an independent reviewer. Their brief was narrow: quantify consumer benefits under a specific set of assumptions, using a specific modelling frame, and explicitly exclude producer surplus, fiscal risk, Hydro’s financial position, the Regulatory Instrument, and the State Budget. That is not a criticism of FTI – it is simply the nature of the work they were asked to do. But it means the release of their modelling does not tell the public what the government actually relied on when it approved Marinus.
The most critical parts of the WoSBC remain entirely hidden. We still do not have the government’s internal modelling, the discount rate used, how Hydro’s capital program was treated, the assumed IRRs for new hydro or wind, the Power Purchase Agreement (PPA) prices Hydro is expected to carry, how drought risk was modelled, how negative cashflow years were handled, or how TasNetworks’ North West Transmission Development (NWTD) cost overruns were treated. We do not know the fiscal exposure, the sensitivity analysis, the risk register, or the alternative scenarios that were considered and rejected. These are the core of any business case.
In fact, the release of the FTI modelling highlights the opacity rather than reducing it. Once you see FTI’s assumptions, you immediately see the missing pieces. FTI assume 390 MW of hydro upgrades without showing the cost or financing plan. They assume 300-600 MW of wind PPAs without showing the PPA pricing or risk. They assume the Regulatory Instrument remains stable without testing that assumption. They assume Hydro’s NEM revenue rises without disclosing Hydro’s revenue modelling. They assume Marinus costs are annualised without showing the fiscal exposure. The FTI report is like shining a torch into a dark room: you see just enough to realise how much is still hidden.
Even if every consultant report were released – and they are not – the WoSBC would still be opaque, because the business case is not the modelling. The business case is the judgement: the weighing of risks, the balancing of fiscal exposure, the treatment of uncertainty, the internal advice from Treasury, the private representations from Hydro, the intergovernmental negotiations, the rejected scenarios, and the political trade-offs. None of that has been disclosed or is visible to public scrutiny.
2. Hydro Tasmania and the WoSBC: A Closed Loop of Self-Validation
Hydro Tasmania is not a normal government business enterprise. It is a monopoly generator, a monopoly contract counterparty, a major exporter, a political instrument, a revenue source for government, a system security linchpin, and now – if Marinus proceeds – a future NEM-scale trader.
Yet its strategic modelling is not public. Its risk assessments are not disclosed. Its commercial assumptions are treated as “commercial in confidence”. Its board is appointed by government, and its shareholder ministers are the same ministers promoting Marinus.
The WoSBC amplifies these weaknesses. Hydro feeds assumptions into a closed process. Government relies on Hydro’s internal modelling. Consultants hired by Marinus produce reports which, if released, suggest more questions than answers. Decisions are made without independent testing. The entire system becomes a self-referential loop in which Hydro’s assumptions validate government’s decisions, and government’s decisions validate Hydro’s assumptions.
This is not governance. It is circular reasoning dressed up as analysis.
3. The Secrecy Problem: Tasmania Is Being Asked to Take on Risk it Cannot See
The pattern since the WoSBC has only reinforced the concern. The annual report, while technically compliant, is structured in a way that obscures more than it reveals. The key numbers – the ones that matter for understanding Hydro’s financial health – are scattered, aggregated, or buried in notes. The operating result is overshadowed by revaluations. The cash flow pressures are masked by working capital movements. The liabilities are presented without context.
Then came the Government Business Scrutiny hearings, where the government refused to disclose Hydro’s revenue and direct costs – information that is neither commercially sensitive nor competitively harmful, and which can be inferred from public data with a little effort. The refusal was not about protecting Hydro. It was about controlling the narrative.
Most recently, the public interventions by Hydro’s CEO have deepened the concern. When the head of the state’s most important financial asset publicly repeats myths about negative Victorian prices flowing into Tasmania – myths that contradict the basic mechanics of the NEM – it becomes clear that the gap between internal reality and public messaging is no longer incidental. It is structural.
This is not about personalities. It is about a system that has become increasingly comfortable with opacity. A system where major decisions are made behind closed doors, justified with redacted documents, defended with selective numbers, and explained with narratives that do not withstand scrutiny. A system where the public is asked to trust, but not to verify.
The danger is not that Hydro is hiding a catastrophe. The danger is that secrecy has become normalised – and that normalisation makes it harder to see problems early, harder to correct course, and harder to maintain public confidence. Tasmania has seen this pattern before. The TT-Line ferry procurement and the Berth 3 debacle were not failures of engineering. They were failures of governance: decisions made without transparency, defended without candour, and corrected only after the damage was done.
Hydro is far larger, far more important, and far more financially intertwined with the State Budget. If governance fails here, the consequences will not be confined to a port or a shipping contract. They will flow directly into the state’s fiscal position, its energy security, and its long-term economic independence.
4. The Wholesale Contract Regulatory Instrument: The Quiet Mechanism Everyone Ignores
The Wholesale Contract Regulatory Instrument (the Instrument) is the quiet engine that protects Tasmanian households from NEM volatility and Hydro’s market power. It forces Hydro to sell wholesale contracts at regulated prices tied to Victorian market conditions – a deliberate design choice to prevent Hydro from manipulating Tasmanian spot prices or exploiting its monopoly position.
Yet the WoSBC treats the Instrument as a static background assumption, as if it were a law of nature rather than a political and regulatory choice. It does not analyse the Instrument, test its long-term viability, model how Hydro’s export incentives change under Marinus, examine how the Instrument interacts with Hydro’s expanded fleet, or consider whether it can survive once Hydro becomes a NEM-scale trader.
This is extraordinary. The Instrument is the single most important consumer protection mechanism in the Tasmanian energy system. And yet it is simply assumed to continue functioning unchanged, even as Hydro’s incentives shift dramatically toward mainland arbitrage.
5. Hydro’s Expanding NEM Role: The Unasked Financial Questions
FTI’s modelling assumes that Hydro will upgrade 390 MW of hydro capacity, underwrite 300 MW of wind via PPAs, eventually support 750 MW of pumped hydro, become a major exporter via Marinus, and earn enough NEM revenue to justify all of this.
But the WoSBC does not ask how Hydro will fund these upgrades, manage the PPA risk, maintain IRRs in a NEM with falling spreads, balance domestic obligations with export incentives, or how its contract book will be affected by the Instrument. It does not examine how Hydro’s risk profile will change under Marinus or how its dividend stream to government will be affected.
These are basic questions for any major investment decision. Yet they are not asked – because the WoSBC is not designed to ask them. It is designed to validate decisions already made.
6. The Illusion of “Consumer Benefit”: A Convenient Narrative
FTI’s modelling is framed entirely around net consumer benefit. But the WoSBC does not test producer surplus, Hydro’s profit trajectory (which we have just spent fourteen chapters trying to unravel), the distribution of gains and losses, the risk to Tasmanian households if Hydro’s revenue falls short or if the Instrument is weakened, the risk of stranded assets, cost overruns, or NEM structural change.
Instead, it presents a single narrative: “Marinus is good for consumers.” But that narrative depends entirely on assumptions chosen by Hydro, modelling done by consultants hired by Marinus, a governance structure that does not publish its work, a regulatory instrument that is assumed to remain stable, and a NEM that behaves exactly as modelled.
This is not a business case. It is a belief system.
7. The Core Governance Failure: Tasmania Has No Independent Energy Oversight
Tasmania lacks an independent energy regulator with real teeth, an independent transmission planner, an independent market operator, an independent modelling capability, an independent cost-benefit review body, and an independent consumer advocate with access to modelling.
Instead, Tasmania has Hydro, Marinus Link Pty Ltd, TasNetworks, Treasury, the WoSBC model, and consultants hired by the proponents. This is a governance ecosystem designed to produce alignment, not scrutiny.
8. The Unavoidable Conclusion
Tasmania is being asked to commit to a multi-billion dollar interconnector, billions in transmission upgrades, hundreds of megawatts of new hydro and wind, a major expansion of Hydro’s NEM role, and a fundamental shift in the state’s energy identity. And yet the modelling is secret, the assumptions are untested, the risks are unquantified, the governance is opaque, the Instrument is taken for granted, Hydro’s incentives are changing, and Tasmanian consumers are exposed.
The WoSBC was the first sign that something was wrong. The annual report confirmed it. The scrutiny hearings amplified it. And the recent public commentary from Hydro’s leadership has made it impossible to ignore.
The next chapter turns to the fiscal stakes – the consequences for the State Budget, for own-source revenue, and for Tasmania’s ability to stand on its own feet. Because the numbers we have uncovered do not sit in isolation. They sit inside a state that is already struggling to maintain its financial independence.