An energy economist says the Marinus Link is economically not viable and cannot happen without Tasmanian taxpayers footing the bil.
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Victoria University's Energy Policy Centre director Bruce Mountain spoke at the Australian Conference of Economists in Hobart, raising the issue of how Marinus Link is a viable project for Tasmania.
Professor Mountain said billions of dollars would need to be spent on Tasmania's power systems for the state to become a Battery of the Nation and deliver electricity to Victoria.
This includes infrastructure within Hydro Tasmania.
"The electricity that they will provide will not be cheaper than the power Victoria can produce themselves, so how is there a grand future in it, even if all the shipping and other costs were covered by customers and taxpayers," Professor Mountain said.
"It is quite obvious that the Marinus Link will not happen without taxpayers funding it, but it is not obvious to me why federal taxpayers would be interested in funding it."
It is quite obvious that the Marinus Link will not happen without taxpayers funding it, but it is not obvious to me why federal taxpayers would be interested in funding it.
- Energy economist Professor Bruce Mountain
Professor Mountain said the federal government is unlikely to fund the project, due to the existence of other power generators and storage companies that could provide more cost effective alternatives.
"It would be extremely difficult for the federal government to justify such a level of handouts. If they don't pay for it, then that means Hydro Tasmania will pay for it."
Professor Mountain said the Australian Energy Market Operator's analysis that it is the best option was flawed.
He said they had overstated its benefits, and had greatly underestimated the costs by assuming many wind farms would be developed in Tasmania.
"The final conclusion is that it is obvious that Marinus Link itself is not economically viable and will not happen without tax payer subsidy."
Mr Barnett said the state government had always maintained Marinus would only go ahead if it was in Tasmanians' best interests.
"Marinus Link will deliver $4.5 billion in net benefits to the nation, including $1.5 billion dollars for the Tasmanian economy, as well as delivering hundreds of local jobs, and reducing emissions by 140 million tonnes of CO2 by 2050," he said.
"The project will support lower wholesale energy prices in Tasmania through its two-way flow of energy, helping to keep future energy bills down for Tasmanians and increase energy security."
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