UPDATE - Panel backs approval for Australia's Basslink
Date: 11-Jul-02
Country: AUSTRALIA
Author: Michelle Nichols
The interconnector between Victoria and Tasmania was of national significance and would benefit both states, it said.
"The panel is of the view that Basslink would introduce an element of flexibility of supply to both Tasmania and Victoria and that this flexibility could be a catalyst for a number of social and economic benefits," the panel said in the report.
Basslink will be a 360km, 600 megawatt electricity cable connecting Tasmania to the National Electricity Grid. The project is due to be completed by the summer of 2003-2004.
The electricity cable will allow Tasmania to export up to 600 MW of renewable energy, particularly during periods of peak demand during the Victorian summer, and import up to 300 MW from mainland Australia.
It will also allow Tasmania to join in 2004 the National Electricity Market, which sets wholesale spot power prices in Victoria, New South Wales, Queensland and South Australia.
Basslink, which is owned by UK transmission developer and operator National Grid , welcomed the panel's report.
"We look forward to gaining approvals from the three jurisdictions in line with the Panel's recommendations," Basslink chief executive officer Geoff Singleton said in a statement. State-owned Hydro Tasmania called on the three governments to give their final approval of Basslink as quickly as possible.
"The development of Basslink will unlock Tasmania's wind potential and cement the state's position as Australia's renewable energy powerhouse," Hydro Tasmania's chief executive officer Geoff Willis said in a statement.
TRADERS SCEPTICAL
However, Victorian power traders questioned whether Basslink was worth building saying that to justify the cost of building an undersea cable would require power prices in Victoria and Tasmania to differ by at least A$20 per megawatt hour.
"Our view is that it is just not economic to build Basslink. The only way you can make money out of an interconnector is if the price is different on each side," one trader said.
"To cover the capital cost of the interconnector you are looking at difference of about A$20 per megawatt hour if it was used 100 percent of the time. But you are not going to get 100 percent utilisation out of Basslink."
The project was given conditional approval by the joint advisory panel's draft report in March.
Duke Energy Corp is also planning to build a gas pipeline between Tasmania and Victoria.