The decision to delay full construction of a series of power connections around the North-West Coast will be a "deal-breaker" for Tasmanian investors that were relying on the link to connect their proposed developments to the grid, the head of the state's business lobby has said.
State power grid company TasNetworks confirmed last week that its North West Transmission Developments project would now be built in two stages, rather than one, with just 60 per cent of the original project included in the first stage.
Critically, construction of a link between Burnie and Staverton that passes by a proposed energy-hungry e-fuels plant is now in limbo, pending a decision about the second leg of the Marinus Link interconnector.
TasNetworks chief executive officer Sean McGoldrick said the project timing and staging was revised following the state government's decision to initially scale down Marinus Link from two cables to one.
"The project has been revised to deliver the NWTD across two stages, focusing on the delivery of Stage 1 until a final decision is taken on the second Marinus Link cable," Mr Mc Goldrick said.
"This approach will see approximately 60 per cent of the proposed NWTD built in the first stage."
That decision to delay implementation of the full project could prompt some wind farm developers to abandon their projects, and as much as $7 billion in investment funding could leave Tasmania, said chief executive of the Tasmanian Chamber of Commerce and Industry, Michael Bailey.
"We know we have a number of wind farms and a number of biofuel plants and others that desperately need this connection, and they were told it would be available to them," Mr Bailey said.
"And now to find out it's been delayed by at least a decade is diabolical for these businesses.
"They are telling us this is a deal-breaker for them in Tasmania and there are literally billions of dollars that are likely to leave the state unless we get on quickly and fix this problem."
But Mr McGoldrick said TasNetworks would connect every eligible proponent to the grid if they want to join it.
"It's false to say any projects won't get connected because we've revised NWTD," he said.
"As always, we'll work with proponents to meet their requirements."
He said the state-owned company was responding to the decision to prioritise one Marinus cable initially.
"We have to be prudent and responsible with Tasmanians' money," Mr McGoldrick said.
"That includes prioritising the transmission needed for Marinus cable one, until Marinus cable two's been confirmed."
According to TasNetworks, construction of the first stage of the NWTD project will begin in 2025.
It will focus on the Palmerston-Sheffield-Heybridge link, as well as the Stowport to Burnie link, which are required for the operation of the first Marinus Link cable.
The second stage will see construction of the Staverton to Burnie section via Hampshire Hills, to align with the second Marinus Link cable.
Construction of this second stage will take place if the state government decides to build a second Marinus connection.
The state government and the commonwealth decided to initially construct one leg of the Marinus undersea cable project following a cost blow out.
Energy minister Nick Duigan said the government was taking steps to ensure energy developments were not disrupted as a result of the phased development.
"We are aware significant wind farm projects are likely to require some of that infrastructure being delivered ahead of that schedule, and that's exactly what we are planning," he said.
"The government is working with proponents to ensure their future needs are factored into that planning so they can make investment decisions with confidence."
"What needs to be built, will be built," he said.
Labor energy spokesman Dean Winter said at least six wind farm developments and the proposed HIF Global e-fuels plant at Hampshire will be hit by the delay to the Staverton to Burnie link.
"Without these connections that TasNetworks and the Tasmanian government appear to have scrapped at least temporarily, there won't be new generation going into the grid," Mr Winter said.