The AER is assessing a revised $3.52 billion price tag for Marinus Link’s first stage.
The Australian Energy Regulator (AER) has released Marinus Link Pty Ltd’s (MLPL) revised Stage 1, Part B construction cost revenue proposal, detailing updated capital forecasts for the 750 MW Bass Strait interconnector’s first stage and enabling works for Stage 2.
The underwater cable will bring more Tasmanian hydroelectricity to the mainland, while providing the island state with improved access to the National Electricity Market (NEM).
The revised submission follows the AER’s initial draft decision in May 2025, which approved about 46 per cent of MLPL’s capital expenditure for two competitively tendered work packages – converter station equipment and HVDC submarine/land cables – valued at $773.2 million and $918.9 million respectively (real 2023).
The remaining cost components, including the Balance of Works, risk allowance, and support activities, will be addressed in the AER’s supplementary draft decision, due by 10 October 2025.
MLPL says tender outcomes for the Balance of Works have now been refined to Class 2 estimates and verified by independent experts. However, some pricing remains confidential due to ongoing contract negotiations.
Total forecast construction expenditure for Stage 1 over the 2025-30 regulatory period is $3.52 billion, excluding $120 million in commissioning costs post-2030.
The procurement strategy has split works into packages to maximise competition, with contracts awarded to Hitachi Energy (converter stations) and Prysmian Powerlink (cables). The Balance of Works package covers civil works, converter interface transformers and valves, and access infrastructure. MLPL has also appointed an Integrated Delivery Partner to manage program risk.
Key technical and regulatory features of the revised proposal include:
- Continued classification as an actionable ISP project in AEMO’s 2024 plan, with the latest RIT-T update (July 2025) showing net market benefits above $3.8 billion for both stages.
- Adoption of independent expert recommendations to amend the Capital Expenditure Sharing Scheme to a 90/10 overspend/underspend sharing rate up to 10 per cent, with zero incentive thereafter.
- Resubmission of four cost pass-through events rejected in the initial draft decision, after redefining scope and control measures.
- Inclusion of updated labour, escalation, insurance, and hedging cost assessments from Oxford Economics, Lockton, and Chatham Financial.
Marinus Link will deliver 255 km of undersea HVDC cable between North West Tasmania and Waratah Bay, Victoria, plus 90 km underground to the Latrobe Valley, with converter stations at each end. Stage 1 commissioning is slated for late 2030; Stage 2 is not expected before 2034.
The AER has indicated it may adjust determination milestones to ensure stakeholders can review all cost elements once market-sensitive data is released.
“The timing of these milestones will be informed by MLPL’s ongoing tendering process,” the regulator stated.
Indicative modelling suggests that, with concessional finance, Stage 1 could slightly increase transmission charges in Tasmania and Victoria but deliver wholesale energy price savings of $25–$36 per household annually, with wider NEM-wide benefits.
Provisional final determination on Stage 1, Part B is scheduled for December 2025.