A $20 million business case study into a second Bass Strait electricity cable has drawn a mixed response.
The jointly funded Federal and State Government study would look at the route, capacity, cost and timeframe to build a second cable connecting Tasmania to the mainland.
Last year, a study into the viability of a second Basslink cable by Dr John Tamblyn found there were limited scenarios where a second cable would be commercially viable.
In 2015, Tasmania was plunged into a six-month energy supply crisis when the Basslink cable failed, prompting calls for a second cable.
Federal Energy Minister Josh Frydenberg said a second interconnector would be a national infrastructure project.
“It’s been estimated that the benefits could be worth up to $500 million from a second interconnector,” he said.
“It will enable more renewable power here in Tasmania to be developed and for Tasmania to become the battery for the nation.”
But Mr Frydenberg would not say who would put up the estimated $1 billion required to pay for it.
“Look I don’t want to cross that bridge until we come to it,” he said.
Questions over cable costs
Energy analyst Marc White said he was concerned about the overall economic viability of a second interconnector.
“Who ends up paying? And the concern being if the link is used to import into Tasmania then Tasmanians will pay for that service,” he said.
A $2.5 million feasibility study to expand Tasmania’s hydro scheme is due to hand down its findings by the end of the year.
A second undersea cable would be key to increasing Hydro’s capacity.
Mr White said he doubted the economics of the Tasmanian hydro scheme would stack up against the rival Snowy Hydro 2.0 scheme in New South Wales.
“The Snowy scheme has a geographic advantage,” he said.
Mr White said he expected improving battery storage technology to play a big part in Tasmania’s energy future.
“We think the future for Tasmania is small wind farms and solar farms rather than billion-dollar investments,” he said.
Shadow federal energy minister Mark Butler said he supported a feasibility study into a second Basslink cable, but accused the Turnbull Government of being late to the party.
“We do think there is merit in investigating the feasibility, the business case of a second Basslink cable, that’s something we announced last year,” he said.
Tasmanian Labor MP Madeline Ogilvie said the $20 million fee for a business study was a lot of money.
“If this contributes to a better outcome for the nation, then that is a good thing but we would like to see the detail,” she said.