Tasmania's ability to become a renewable energy powerhouse hinges on the development of a second undersea interconnector but a cloud remains over the project as negotiations continue over who will fund it.
Negotiations over the second cable, dubbed the Marinus Link, have been ongoing between the federal government and state government but a resolution on the way forward has not been reached.
The Marinus Link forms a vital part of the Tasmanian Government's draft renewable energy action plan, released on Wednesday, which aims to double Tasmania's renewable energy production by 2040.
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However, doubts have been raised about the viability of the interconnector, with Green Energy Markets' director Tristan Edis saying without federal government support and policy changes, the interconnector would not be needed to supply power to Victoria.
The Marinus Link feasibility study states that for the link to be viable, a decommissioning of existing coal power sites is needed.
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A spokesman for Energy Minister Angus Taylor said the government recognised the substantial economic and energy benefits the Marinus Link would bring for Tasmania and the mainland.
However, he stopped short of committing to any policy changes that would support or fast-track the decommissioning of coal power sites.
Mr Edis said the federal government was getting in the way of a natural transition in the energy market, which was changing in favour of renewable energy.
If asked whether the federal government would support policy that would favour renewables over coal-power, Mr Taylor's spokesman did not directly answer the question.
The spokesman said the federal government's goal was to secure reliable power for the nation.The federal government has funded $56 million for the design and approval phase of Marinus but has not committed to ongoing support.
The Battery of the Nation and Marinus Link projects are expected to create up to 3800 direct and indirect jobs during construction and deliver an economic stimulus of up to $7 billion.
Tasmanian Labor Senator Helen Polley said the party strongly supported the second interconnector but unanswered questions remained over the project which needed to be resolved.
"Tasmanians deserve reduced power prices if we are going to produce energy for the mainland, not an increased cost in our electricity bills," she said.
But she said a question remained over who would fund the project.
"Don't ask the federal government, they have no strategic plan regarding Tasmania's energy policy because of a lack of collaboration with the state Liberal government."
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Ms Polley also called on the state government to give an assurance that the Marinus Link would not be privatised.
"Labor will never accept such a proposal but we welcome reduced power prices and the Tasmanian jobs which would accompany a project of this magnitude," she said.
"It is now up to the state government to start collaborating with their federal colleagues to make this project a reality that Tasmania needs as we emerge out of this health and economic crisis."
The spokesman for Mr Taylor said negotiations were ongoing with the Tasmanian Government regarding the Marinus Link and Battery of the Nation projects.