Tasmania's game-changing new energy link to the mainland is set to go ahead.
The electricity cable project has been described as "critical" in the Australian Energy Market Operator's integrated system plan (ISP) for Australia's energy needs in the next 20 years.
Tasmanian Energy Minister Guy Barnett said the project's inclusion confirmed Marinus Link would be crucial to Australia's future energy needs, and Tasmania was set to become Australia's Battery of the Nation.
Battery of the Nation includes exporting more energy from Tasmania via the new cable or cables, utilising new renewable energy developments including wind farms and pumped hydro.
"Marinus Link is the key to Tasmania's biggest economic opportunity during the next decade and will play a vital role as we rebuild from COVID-19 by injecting up to $2.9 billion into our economy and creating up to 2800 direct and indirect jobs across our state and Victoria, with the majority in regional Tasmania," Mr Barnett said.
"Marinus Link will also unlock a pipeline of investment in renewable energy and long-duration energy storage, with an estimated value of up to $5.7 billion and 2350 jobs."
The development followed Prime Minister Scott Morrison in June announcing Marinus Link would be one of 15 major projects across the nation to be fast tracked as part of the government's efforts to boost recovery from the coronavirus economic crash.
Mr Barnett said the first of two Marinus Link undersea cables to Victoria could be operational as early as 2028-29, with early works expected to be complete by 2023-24.
He said the Australian Energy Market Operator (AEMO) listing Marinus Link as an "actionable project with decision rules" confirmed the second Bass Strait interconnector was needed to keep the lights on across the country and would be delivered with "the successful resolution of how the costs will be recovered".
"This means that resolution of a fair costing allocation for Tasmanians is an essential step in implementing this project," he said.
"The Tasmanian Liberal government stands steadfast; Tasmania should only pay our fair share for what is strategic national infrastructure benefiting the nation."
Mr Barnett said the ISP confirmed Battery of the Nation was one of the most reliable and cost-competitive solutions for meeting Australia's demand for affordable, reliable and clean energy.
He said the early Marinus works would include land and marine surveys, technical design and engineering, detailed modelling and analysis and significant community engagement in Tasmania and Victoria.
The report said Marinus would involve one or potentially two cables.
"It would deliver net market benefits and support the energy market transition by accessing necessary large-scale and deep storage in Tasmania to increase network reliability, allowing more efficient generation sharing between Tasmania and Victoria, reducing generation dispatch costs and adding 540 megawatts' hosting capacity to the attractive wind resource of the Tasmania Midlands REZ (renewable energy zone)," it said.
AEMO managing director and chief executive Audrey Zibelman said the ISP included a comprehensive review of the changes occurring in the electricity system and identified the supply and network investments that could best meet consumer expectations of affordable and reliable electricity.
"The ISP analysis confirms that as our coal plants retire, the least-cost transition of the NEM will be to a highly diverse portfolio consisting of distributed energy resources and variable renewable energy, supported by multiple dispatchable resources," she said.
"To enable the expected rise in renewable energy, the ISP identifies strategic investments in transmission infrastructure and renewable energy zones, which, when coupled with low-cost firming resources, will be the most cost-effective way to add generation capacity and balance variable resources across the NEM (National Electricity Market)."
The ISP report will be released on Thursday.