Drive the Lyell Highway out past Derwent Bridge and you’re in Hydro Tasmania’s back yard, a chain of lakes and dams built up over nearly a century that most mainland readers have never heard of and that quietly does something no other state can claim: Tasmania ran on more than 95 per cent renewable generation across the last full year, mostly hydro, with wind filling in the gaps. That’s not a target. That’s the current operating reality, and it’s been true in some form since the big storage schemes on the Gordon and the Derwent were finished decades ago.
The plan now sitting on top of that system is called Battery of the Nation, and the engineering idea is straightforward even if the politics around it aren’t. Tasmania has enormous pumped hydro potential because it already has the dams, the elevation and the water. What it doesn’t have, on its own, is a market big enough to make that storage worth building at scale. So the plan pairs more Tasmanian pumped hydro and wind with a second high-voltage cable under Bass Strait, called Marinus Link, that would let Tasmania sell firmed power into Victoria when the mainland needs it and buy cheap mainland renewable energy when Tasmania’s lakes need a rest.
What Tasmania’s hydro fleet actually does today #
Worth being precise here, because “95 per cent renewable” gets thrown around as if it settles every question about reliability. Hydro Tasmania’s fleet is around 30 power stations with a combined capacity above 2,600 MW, built mostly for energy storage and flexibility rather than flat-out baseload running. The lakes behind Gordon, Pieman and the Derwent act as enormous batteries that store energy for weeks or months, not just hours – Lake Gordon alone holds enough water to run its power station for the better part of a year at full output if nothing refilled it. That’s the genuine asset. The catch is rainfall. Tasmania had a run of dry years last decade that forced it to lean on the existing Basslink cable to import mainland power, and the 2015-16 cable outage that followed a fault left the state scrambling for diesel generators and demand reduction for months. Anyone pitching Tasmania as a limitless battery for the mainland should remember that the limitless bit is actually rainfall-dependent, and rainfall doesn’t read planning documents.
The Marinus Link numbers, and where they still move #
Marinus Link is planned as two 750 MW high-voltage direct current cables between North West Tasmania and the Latrobe Valley in Victoria, delivered in two stages rather than one go. That’s 1,500 MW of transfer capacity in total if both stages proceed, roughly double what the existing Basslink interconnector can carry. Project Marinus Pty Ltd, the Commonwealth and Tasmanian government-owned entity now running the build, has pushed the in-service date for the first cable out past the original mid-2020s target, with construction and underground conditions in North West Tasmania adding cost and time. Let’s be careful with that number – AEMO’s 2024 Integrated System Plan treats Marinus Link as an “actionable” project for the optimal development path, which is AEMO’s way of saying the modelling leans on it being built, not that the build is guaranteed on the current timeline. Readers who want the plan’s own language on this should go to the Integrated System Plan itself rather than take a journalist’s paraphrase of it.
The cost has moved too. Early estimates for the full two-cable project sat in the $3 billion range; more recent figures from the proponents and state government commentary have pushed combined project costs, including onshore works, well past that. Readers who followed the equivalent blowout on Snowy 2.0 will recognise the pattern: tunnel and marine cable projects in Australia have a habit of discovering their engineering is harder than the business case assumed.
Pumped hydro sites waiting on the cable #
The storage half of Battery of the Nation isn’t abstract. Hydro Tasmania has identified several pumped hydro candidates, with Cethana near Sheffield in the state’s north-west the most advanced, potentially delivering several hundred megawatts of pumped storage by recycling water already captured in the existing hydro scheme rather than building a brand-new catchment. There are other candidates further down the pipeline. None of them make commercial sense at full scale without Marinus Link, because the whole point of a Tasmanian pumped hydro plant is arbitrage against mainland prices – pump when Victorian wind and solar are flooding the market and prices go negative, generate when Victoria’s evening peak bites and gas peakers are setting the price. Without the second cable, that arbitrage is capped by Basslink’s existing capacity, which is already doing useful work moving power both ways but isn’t big enough to support a second major pumped hydro development on top of everything else competing for that corridor.
It’s worth putting this next to the Queensland approach, where Borumba is a state-funded pumped hydro scheme built to firm an in-state grid, no interconnector dependency required. Tasmania’s version is structurally different: smaller population, smaller in-state demand, so the business case only works if the cable gets built and Victoria is a willing buyer. That’s a more exposed position than Queensland’s, and I don’t think it gets said often enough in the Battery of the Nation marketing material.
Why Victoria needs what Tasmania is selling #
This isn’t a one-way favour to Tasmania. Victoria’s coal fleet is closing on a timetable that AEMO has flagged repeatedly as tight against the replacement build, and the state’s own renewable targets assume a lot of offshore wind and onshore REZ capacity landing roughly on schedule. Tasmanian hydro and pumped storage offer something batteries alone don’t do as cheaply at scale: multi-day, sometimes multi-week, firming. A four-hour battery is excellent at smoothing the evening peak. It’s not the tool for a week of still, grey weather across southern Victoria in winter, and that’s precisely the gap Tasmanian hydro can fill if the cable exists to move the electrons. The AEMC and AEMO have both pointed to this kind of seasonal firming shortfall as a live risk in their market design work, and it’s a central part of the logic behind what firming actually means in NEM planning documents.
Who’s paying, and the local pushback #
Marinus Link’s funding structure runs through the regulated transmission framework, with costs recovered via Tasmanian and Victorian transmission charges rather than a market-driven investment by a private generator. That matters for the politics. Every dollar of cost blowout on the marine cable or the onshore converter stations eventually turns up in someone’s electricity bill, split between the two states in a proportion that’s been argued over in regulatory submissions. There’s also been local opposition in North West Tasmania around the Heybridge and Hampshire Hills converter station sites and the transmission easements needed to connect pumped hydro candidates to the new cable – landholders raising the same concerns that have shown up around REZ transmission corridors on the mainland, just at smaller scale. Readers following the broader fight over who wears transmission costs should look at who really pays for the transmission build-out, because the Marinus arrangement is a live case study of exactly that argument.
My own read, for what it’s worth: the engineering logic for Battery of the Nation is sound and genuinely useful to the whole NEM, but the timeline keeps slipping in a way that should worry anyone relying on it in the ISP’s optimal development path for the early 2030s. If Victoria’s coal exits faster than currently planned, and Eraring’s own schedule has shown how fluid these dates can be – Marinus Link needs to be in service roughly when AEMO’s modelling assumes, not years later. A cable that arrives after the reliability gap it was meant to cover isn’t much use to anyone, however elegant the underlying hydro economics.
The seasonal mismatch nobody markets well #
Tasmania’s hydro output naturally dips in autumn before spring rains and snowmelt refill the lakes, which is roughly the same period Victoria’s own renewable output can sag in still, overcast weeks. That’s not a fatal flaw, but it’s a genuine constraint that the glossier Battery of the Nation material tends to skip past. The actual value proposition depends on diversity of timing between the two systems, not a simple story where Tasmania always has spare water when Victoria needs it. AEMO’s modelling accounts for this with inflow sequences and reservoir constraints baked into the ISP, but it’s the sort of detail that gets lost between the engineering report and the press release.
I’ve spent a fair bit of time this year cross-checking the capacity figures quoted in state government statements against the actual AEMO generation information page, partly out of habit and partly because the numbers genuinely do move between announcements, not through anyone’s fault, just projects evolving. It’s the same discipline I’d apply to reading an opening position in chess: the headline move looks decisive, but the follow-up sequence is where the actual commitment gets made, and Marinus Link’s follow-up sequence, the pumped hydro builds that depend on it, is still mostly unbuilt.
What to watch next #
The practical test over the next couple of years is whether Project Marinus hits its revised construction milestones for the first 750 MW cable, and whether Hydro Tasmania commits final investment decisions on Cethana or another pumped hydro candidate once that cable has a believable in-service date. Everything else in the Battery of the Nation story (the modelling, the market design, the seasonal diversity argument) is sound in principle. It’s the construction schedule and the cost recovery fight that will decide whether Tasmania’s lakes end up doing for the mainland grid what the engineering says they can.
– Anjali Rao, Grid & Storage Correspondent
Photo by Theo Laflamme on Unsplash