Just over 90 per cent. That’s roughly the share of Tasmania’s electricity that comes out of Hydro Tasmania’s own fleet in an average year, across the 30-odd power stations strung through the Derwent, Gordon and King river systems. No other state in the NEM gets close. It’s the reason Tasmania can run near-enough as an energy exporter in wet years, and it’s the reason the entire Battery of the Nation pitch makes sense on a whiteboard in a way it doesn’t yet make sense in steel and concrete.
I drove down to Tarraleah a few years back, past the old hydro village with its weatherboard cottages, to look at the penstocks running down the escarpment toward the power station below. It’s a strange thing to stand under: six pipes, each wide enough to park a car in, carrying water that fell as rain weeks earlier and is now a few seconds from becoming electricity. Tasmania’s hydro scheme was built mostly last century for an aluminium smelter and a population a fraction of mainland capitals. What it has turned into, almost by accident, is the best natural battery the NEM has.
What makes the Tasmanian system different #
Hydro generation isn’t like wind or solar. You can turn it up and down in minutes, store the fuel behind a dam wall for months, and schedule it against price. Tasmania’s big storages (Lake Gordon, Lake Pedder, the Great Lake) hold enough water, in combination, to ride through dry stretches that would otherwise force the state back onto gas peaking or imports down Basslink.
That flexibility is precisely what the rest of the NEM is short of. As coal leaves the system on the mainland, and NSW’s coal exit is running ahead of its REZ build-out in a way that’s already causing headaches: the grid needs something that can absorb surplus solar in the middle of the day and give it back at 6pm. Batteries do some of that over two-hour windows. Pumped hydro and conventional hydro with storage can do it over days or weeks. Tasmania, in theory, has weeks of it sitting behind dam walls already paid for.
Battery of the Nation: the pitch and the catch #
Battery of the Nation is Hydro Tasmania’s name for using that existing fleet, plus some new pumped hydro schemes, to firm the mainland grid at scale. The flagship pumped hydro candidate is Lake Cethana, in Tasmania’s north-west, which AEMO’s Integrated System Plan has carried for several ISP cycles now as a committed or near-committed project. There’s also talk of Tribute and other smaller schemes, though Cethana is the one that actually shows up in the modelling with real megawatt numbers attached.
The catch is almost embarrassingly simple: none of it matters without a bigger cable to the mainland. Tasmania is connected today by Basslink, a single high-voltage DC link with a transfer capacity of around 500 MW. That’s a power figure, not an energy figure, and it’s worth being precise about the difference – 500 MW tells you the maximum rate of flow at any instant, not how much energy moves over a day or a year. Basslink can shift meaningful amounts of power, but it’s one cable, built for one purpose, and it has failed before. A fault in 2015 took it out of service for months and cost Tasmania dearly in emergency diesel and gas generation while hydro storages were run down trying to cover the gap.
Marinus Link: the cable doing the heavy lifting #
Marinus Link is the proposed second interconnector, running underwater through Bass Strait, designed in two 750 MW stages for a combined 1,500 MW of extra transfer capacity. I’ve written before about how Marinus Link’s cost and staging have moved over the life of the project, and the short version is that the numbers have grown substantially since the project was first costed, as subsea cable projects almost always do once marine surveys, contractor appetite and steel prices get involved.
Project Marinus is now a joint undertaking between TasNetworks, Marinus Link Pty Ltd and the federal government, with Tasmania and Victoria as the connecting states. The first stage has underwritten funding commitments from the Commonwealth and both state governments, and construction contracts for the converter stations and cable supply have been let. But “funded” and “built” are different words in transmission infrastructure, and Bass Strait cable-lay is a genuinely hard engineering job: deep water, strong currents, a strait with its own weather reputation among anyone who’s sailed it.
Let’s be careful with that distinction between committed and complete, because it matters for anyone reading AEMO’s draft 2026 Integrated System Plan and taking the Marinus timeline at face value. AEMO’s ISP treats Marinus Link Stage 1 as part of the optimal development path: meaning the modelling says the NEM needs it, but the ISP is a planning document, not a construction schedule. Actual in-service dates for major transmission builds in this country have a well-established habit of sliding to the right. VNI West is the cautionary tale here, a line still arguing with a map years after it was first flagged as urgent.
What the hydro fleet can and can’t do without more cable #
Here’s a worked example that I think clarifies the stakes better than the glossy brochure versions. Say Tasmania’s hydro fleet has spare capacity to export an extra 1,000 MW at a given moment – plausible on a wet day with storages full and mainland demand spiking. Basslink alone can carry 500 MW of that. The other 500 MW simply has nowhere to go, no matter how much water is sitting behind the dam wall, because the interconnector is the bottleneck, not the generator.
That’s the whole argument for Marinus in one sentence: Tasmania isn’t short of energy, it’s short of a way to sell the power at the moment the mainland wants it. Build Marinus and the arithmetic flips: suddenly there’s up to 2,000 MW of combined transfer capacity, and all those gigawatt-hours of stored water start being genuinely useful to a mainland grid trying to fill the gap left by retiring coal units.
The flipside gets less airtime. Dry years happen in Tasmania too, and when they do, a bigger interconnector cuts both ways. It also lets the mainland lean harder on Tasmanian storage during a drought year, which could leave the state more exposed if a dry spell and a mainland heatwave coincide. Hydro Tasmania manages this with its own water security policies and AEMO factors hydro inflow risk into its planning, but it’s a real constraint, not a rounding error, and I don’t think it gets argued honestly enough in the public pitch for Marinus.
Cethana and the pumped hydro layer #
Lake Cethana, proposed at roughly 750 MW with long-duration storage, would sit in the existing Mersey-Forth hydro scheme, using Cethana’s existing reservoir alongside a new upper reservoir. It’s a genuinely clever site: much of the civil works piggyback on infrastructure that’s already there, which should, in theory, keep costs more contained than a greenfield pumped hydro scheme. That’s the same logic Queensland is leaning on with its own pumped hydro ambitions, which I’ve covered in the context of Queensland’s energy plan and its reliance on two major pumped hydro projects, and Queensland’s own experience with Borumba shows how even a well-sited project can take longer and cost more than the first announcement suggested.
Cethana’s economics depend almost entirely on Marinus existing. Build pumped hydro storage in Tasmania without the extra interconnector capacity to sell it north, and you’ve built an expensive battery with no customer big enough to need it. The island’s own demand simply isn’t large enough to justify a project of that scale on its own. So the sequencing matters: Marinus has to come first, or close to it, or Cethana’s investment case falls over before a single turbine is ordered.
Where this leaves the state’s bigger bet #
My honestly contrarian view, for what it’s worth, is that Tasmania’s Battery of the Nation strategy has been sold to the public with more certainty than the project timeline deserves. The hydro resource is real and the engineering logic is sound. I don’t doubt either of those things. What I doubt is the implied promise that this all arrives on a predictable schedule. Transmission projects of this scale, in Australian waters, with multiple governments co-funding and changing cost estimates along the way, have a track record that should make anyone cautious about hard dates.
That doesn’t mean the bet is wrong. It means the state’s energy strategy, and quite a bit of the mainland’s coal-replacement plan in AEMO’s ISP, is resting on one cable that still has to be built across one of the more difficult stretches of water in the country. If Marinus slips the way VNI West has slipped, or the way Snowy 2.0’s schedule has moved, Tasmania keeps its hydro fleet, its reliability, its cheap power at home, but the “nation” part of Battery of the Nation stays mostly theoretical for a while longer.
The AER and the AEMC both publish regular updates on interconnector progress and the regulatory investment test findings behind projects like Marinus, and anyone wanting the primary numbers rather than my summary should go straight to AEMO’s published ISP documents and Marinus Link Pty Ltd’s own project updates. The gap between planning document and completed cable is where I’ll be watching next.
– Anjali Rao, Grid & Storage Correspondent
Image: Thennicke (CC BY-SA 4.0) via Wikimedia Commons