Tasmanian Gas Pipeline warns on energy security, power station

That is according to the Tasmanian Gas Pipeline, which is in tense negotiations with Hydro about renewing a gas transportation agreement set to expire at the end of the year.

Hydro maintains it has no plans to decommission the Tamar Valley Power Station's big generation unit - the combined cycle gas turbine - which proved vital in the 2016 energy crisis when water storages fell and the Basslink interconnector with Victoria failed.

Energy Minister Guy Barnett on Monday said the combined cycle last operated in the 2018-19 summer and Hydro "has the ability to have it operational within three months".

But Tasmanian Gas Pipeline director Lindsay Ward said Hydro's plans would lead to the combined cycle being mothballed, and it would take much longer than three months to restart it.

"Should there be no supply to the CCGT, the infrastructure will be removed and used elsewhere, meaning, on our calculations, it will take some two years to reconnect," he said.

"We support the government's hydrogen vision, but the question has to be asked; where is the energy to power it coming from?

"Marinus Link is still a decade away, Basslink is on shaky ground, the rollout of additional renewable energy development under the TRET (Tasmanian Renewable Energy Target) is unclear, and now the government wants to essentially turn off the Tamar Valley Power Station.

"It just doesn't add up.

"If the Hydro wishes to contract lower volumes on the Tasmanian Gas Pipeline then so be it;

"We are simply pointing out the broader implications this will have for energy security in Tasmania.

"And the fact is, what is being proposed by the Hydro would mean a mothballing of the CCGT and a wrecking ball through Tasmania's energy security."

Mr Barnett said the government and Hydro had repeatedly said the Tamar Valley Power Station would be retained.

"The government will ensure the outcome of negotiations between Hydro and TGP is in the best interest of Tasmanians," he said.

"Tasmanians should also be proud that we are the first jurisdiction in Australia to be 100 per cent powered by renewable electricity and the state's energy security has never been stronger with our Hydro storages at the highest level for nearly a decade ..."

He said Tasmania's energy profile had changed significantly in recent years, with wind farms such as Cattle Hill and Granville Harbour becoming operational.

TGP commissioned ACIL Allen to model scenarios for the electricity system.

"The modelling revealed that should the Tamar Valley CCGT no longer be available, along with the development of 500 megawatts of hydrogen demand, Tasmania's dams could fall to the extreme environmental risk zone (EERZ) in less than two months," TGP said.

It said that fall in water storages was projected in circumstances where Basslink was out of action for two months, water inflows were low and current generation assets except the CCGT remained in place.

"No one wants a situation where we have rolling blackouts for consumers and major industry are forced to reduce or turn off their production," it said.

"It is vital the government intervenes in the current gas transportation negotiations between TGP and Hydro to ensure Tasmania's hydrogen industry can flourish while still maintaining Tasmania's energy security."