Interview with Leon Compton - ABC Tasmania Mornings
LEON COMPTON: So, the second power cable to the mainland looks set to go ahead. You might have seen the reporting over the weekend, there's been a new deal struck between Victoria, Tasmania and the Federal Government for Marinus Link. An interconnector, our second. The Feds will pay more, Tasmania will pay less. Under the new deal, we'll own 17.7 per cent of it, and our costs will be, for the most part, covered at concessional borrow growing rates. So, what's Marinus Link, for those of you new to Tasmania? Well, it'll mean a lot of things if it's constructed. It'll mean opportunities for Hydro Tasmania to profit selling our power to the mainland for wind farm operators, those that are here and yet to be created for them to profit from access to markets on the mainland at peak times. There'll be redundancy for Tasmania if Basslink fails. We'll have a second interconnector to get power in if we need, and then, of course, there are the promises that will mean cheaper power for you. I caught up with Federal Energy Minister Chris Bowen a little earlier this morning and I started by asking him this; Minister, is it going to happen?
CHRIS BOWEN: Yes, yes and it's been talked about for many years. People have talked about what an important project it is but we're getting on and actually building it.
LEON COMPTON: So, effectively, this is the final investment decision. The project, as far as you're concerned, has been given a green light under the new deal announced over the weekend.
CHRIS BOWEN: Yeah, look, there's still obviously some final details to be worked through with the Tasmanian government in terms of final, final investment decisions. But clearly this project is proceeding. Both governments want it to proceed, Victorian Government wants it to proceed. We’ve worked together in difficult circumstances with cost increases which are happening to projects around the world, and we've agreed that we will deliver it as close as possible to 2028.
LEON COMPTON: Minister, I can see how this project works for Victoria, I can see how it works for wind farm owners. Our audiences can see how it works for Hydro Tasmania. How does it work for ordinary Tasmanians whose power bills have just gone up by nine and a half per cent this year and even more the year before?
CHRIS BOWEN: I think a couple of things, Leon. Firstly, Tasmania does need more energy. You need more electrons being produced on the island. And to make that viable, this cable is necessary because while a lot of that electricity will be consumed in Tasmania, not all of it will be and to make it viable, we need a sensible way to export it to the mainland. So, something like Tarraleah, a good hydro project, which creates a lot of jobs and a lot of energy, wouldn't really happen without the Marinus Link happening. That's the first point. Second point, Tasmania actually, obviously exports a lot of power, but you also need power, particularly in winter when it gets very cold and you use a lot of electricity and this will help with getting electricity to Tasmania in winter. And finally energy security. You know, just having one link, just having Basslink between Tasmania and the mainland. When you think about it, it's quite a risky proposition. And it's not just electricity that transfers across, it's used for communications and other things. And really having a second link and potentially a third link just really improves Tasmania's energy security.
LEON COMPTON: What is the status of the second link. So, when it was proposed, it was not one cable, but two running backwards and forwards across to the mainland. This is in addition to Basslink, obviously, that exists at the moment. The Greens are describing it as one cable for the price of two. What is your thinking around the second cable? Is that ever going to happen? Is that now officially shelved, where are you on it?
CHRIS BOWEN: Well, the Greens say they want more renewable energy than they oppose projects which actually deliver more renewable energy, so I'm not going to get distracted by them. But the second cable we've agreed to keep talking about, we're focusing on the first cable in the first instance that actually delivers two-thirds of the benefits. The second cable, the second Marinus cable or the third cable between Tasmania and the mainland remains a good idea. But obviously both governments are going to work carefully through the figures, see what's happening with costs as we roll out the first cable. We're committed to the first cable. We're committed to talking about the second cable and seeing if we can make it work. But there's a bit of work to do on second cable yet.
LEON COMPTON: Who's going to run the project? Up until now, it feels like it's been incredibly populated by Tasmanian players. Who runs Marinus and delivery of the project from here on?
CHRIS BOWEN: There's a joint board with representatives of the various governments and obviously one of the things we've done is we've stepped in. The Federal Government and stepped up, we've taken more ownership of the project, 49 per cent. Obviously that's reflected in our management structure, et cetera, going forward. But it'll continue to be a joint project, Tasmania has reduced their equity down to 17 per cent, so they still have a stake, but it still remains very much a joint, genuinely joint project.
LEON COMPTON: The Tasmanian Government can sell it back to you when it's up and running. That was a detail contained in the announcement on the weekend. What does that actually mean?
CHRIS BOWEN: Well, basically it means that remaining 17 per cent, if the Tasmanian Government at that point wants to sell it to us, they can. And we're happy with that because we believe in the project, we believe in its value, we believe in its returns. All the modelling shows that it's a good project, both for Tasmania and the mainland and the owners of it, and we are happy to take more at that appropriate time if Tasmania chooses at that time to sell is to us.
LEON COMPTON: Would Tasmanians still be responsible for paying down any of the debt associated with the construction of Marinus?
CHRIS BOWEN: Well, if they sell us their ownership, then they sell us basically everything that goes with the ownership at that time. But any decisions they make in the lead up to that, obviously then they continue to deal with. But if they choose to sell us the 17 per cent, we will buy it off them. We've said that very clearly and obviously at that time there'd be discussions about the process for selling it to us.
LEON COMPTON: And would we then lose revenue opportunities from trading across the line?
CHRIS BOWEN: Yeah, if you don't own the project, then you don't get the revenue that goes with the project. But that's a decision that the Tasmanian Government can make at that time.
LEON COMPTON: You’re on mornings around Tasmania. My guest this morning, Chris Bowen, the Federal Minister for Climate and Energy. We're talking Marinus, and you're welcome to join us as well. Why did you decide to pay more of a share to get Marinus to happen?
CHRIS BOWEN: Ultimately Leon because we want to see the project built. And Tasmania came to us and said, look, costs have blown out, we're a small state, we're going to struggle here. And we did a deal in October on what everybody would do. Tasmania came to us in recent weeks, the Tasmanian Government, and said, we are going to struggle to meet our commitments we made you in October because of the cost blowout. So, really the choice facing the Prime Minister, the Treasurer and me was, do we see this project go under? Do we see the benefits for Tasmanians and the mainland disappear? Or do we step up and make it happen? We've chosen to make it happen. That's the reality. We believe in Tasmania's energy future, we believe in Tasmanian renewable energy. But we also know that you can't just talk about it. Marinus Link's been talked about for years. Prime Ministers have come in and done little nice press conferences, talking about how many jobs it creates. None of that achieves anything until you actually put money behind it.
LEON COMPTON: On mornings, Chris Bowen's, our guest. A couple more questions about the wider energy issue in Tasmania. We see wind farm proposals in a number around the state. We also see a lot of opposition to those and we see a significant delay while those are thought through and assessed. Is the process for getting wind farms, Minister, too time consuming at the moment?
CHRIS BOWEN: Look, I mean, I think there's a real balance to be struck here, Leon, because nobody's a bigger believer in renewable energy than I am. But we’ve also got to ensure proper community consultation and it's in the right places. Not everywhere is appropriate for a wind farm or a solar panel, a solar farm. But we do want to get to, if you like I put it this way, Leon, get to yes or no quicker. It's in everybody's interest to get to yes or no quicker. It's in the proponent's interest. If it's no, let the planning authorities tell them it's no so that they can then move on to other projects. If it's yes, let's get to yes quicker.
LEON COMPTON: Final question for you this morning. Tasmanians opening their newspapers, actually, I think it might be The Mercury specifically, could be The Advocate and The Examiner and seeing an ad by ConocoPhillips looking to do more oil and gas exploration in the seas around Tasmania. Minister in 2023, knowing what we know about the climate crisis, why are we drilling for fossil fuels around the coast?
CHRIS BOWEN: Well, I mean, I think what you're looking at there is exploration to see what's there.
LEON COMPTON: Why is it even happening?
CHRIS BOWEN: Well, there's a process which is well established around exploration. And just on gas, we are seeing a lot of the Bass Strait gas fields deplete, which means they're running out of gas and they're producing less and less. But look, we are getting Australia's energy system to 82 per cent renewables by 2030. That's a huge task, a big lift. It's not going to happen easily or overnight, but we are going to achieve it and we are getting on with the practical things which achieve it and Marinus Link is very high on that list.
LEON COMPTON: That was Chris Bowen, Federal Energy Minister talking with you before about 08:00 this morning.