Australia finalizes FID for Marinus Link cable to boost renewable power

Australia has reached the final investment decision for the Marinus Link Stage 1 undersea electricity cable project, marking a key milestone in its energy transition. The 750-MW connection is expected to enhance renewable energy supply, Climate Change and Energy Minister Chris Bowen said Aug. 1.

The announcement comes as Australia implements measures to boost renewable energy capacity, including increased funding and shorter tender processing times, aiming for 82% renewable electricity in the grid by 2030, double current levels.

"The underwater cable will bring more Tasmanian hydroelectricity to the mainland while providing the island state with improved access to the National Electricity Market," Bowen said.

Bowen added that the agreement on the FID between the Commonwealth, Victorian, and Tasmanian governments marks the start of detailed steps before Marinus Link moves to the construction phase.

The FID was reached between the federal and state governments of Victoria and Tasmania, Bowen said, and it clears the way for Stage 1 construction to commence in 2026 and finish by 2030.

The undersea and underground electricity and data interconnector will provide a link between northwest Tasmania and the Latrobe Valley in Victoria.

"It will deliver an economic boost to Tasmania and wider Australian industry during construction," Bowen said. He added that the project would have "long-lasting benefits by improving the transmission of cleaner, reliable renewable energy."

"A recent report to the Australian Energy Regulator found that building Marinus Link would deliver more than A$1 billion ($643 million) in climate pollution savings while putting downward pressure on energy bills," he added.

The project, which supports Australia's strategy to increase renewable energy penetration and grid stability as it transitions away from fossil fuels, has faced cost escalations and delays.

In 2023, Bowen said Australia would focus on delivering one 750-MW subsea cable of the proposed 1.5-GW Marinus Link to Tasmania by 2028, underscoring the country's commitment to the project despite challenges.

Among other measures, Australia recently expanded its Capacity Investment Scheme target to 40 GW from 32 GW of renewable energy capacity, it said July 30. The plan, which offers revenue underwriting to reduce investor risk, will rollout auctions through 2027.

Australia remains on track to meet its Nationally Determined Contribution, targeting a 43% emissions reduction over 2005 levels, Bowen said.