The AER has today released the Stage 1, Part A (Early works) revenue determination for Marinus Link.
The determination approves proposed prudent and efficient capital expenditure of $196.5 million and finds the proposed scope of works are consistent with the Australian Energy Market Commission’s definition of early works.
The scope of the Stage 1, Part A (Early works) revenue determination is substantially narrower than a standard determination. Key decisions include review of the efficiency and prudency of proposed capital expenditure for early works, the allowed rate of return, and application of incentive schemes.
Marinus Link Pty Ltd will later submit a Stage 1, Part B (Construction costs) application seeking to recover revenue for project construction and implementation costs once the project has been committed to, passed the Australian Energy Market Operator's feedback loop process and a final cost estimate is available.
The staged approach has been adopted to reduce project uncertainty and identify project risks before committing to the full project.
Background
Marinus Link is a proposed 1500MW transmission line between Tasmania and Victoria. The project comprises two undersea High Voltage Direct Current (HVDC) cables running across Bass Strait and converter stations in Tasmania and Victoria.
The AEMO 2022 Integrated System Plan (ISP) identifies significant new transmission requirements to connect renewable generation sources as well as firming capacity; one transmission project identified is Marinus Link.
On 1 June 2023 the AER published its decision to commence a revenue determination process for the Marinus Link interconnector and the commencement and process paper applying to that decision.