Tasmania an island no more in power

The Australian Financial Review, Page: 9
Wednesday, 10 May 2006

A $780 million undersea electricity link was yesterday officially launched between Tasmania and Victoria, possibly leading to lower short-term prices but unlikely to meet growing peak demand after more than 18 months. The 297 kilometre Basslink was inaugurated by Victorian Premier Steve Bracks and his Tasmanian counterpart Paul Lennon, and will provide an extra 600 megawatts for the mainland national grid. But an estimated annual increase in peak demand in Victoria of 350 Mw each year will mean the state could face the threat of more power shortfalls by the summer of 2007-08 unless new power sources come on line, according to the National Electricity Market Management Company. The link was originally meant to be operational last summer but it was delayed after two turbines were damaged during shipment to Tasmania.

It allows electricity to flow to Victoria during summer peaks and into Tasmania during its peak in winter. According to Basslink's manager, National Grid Australia, electricity prices during non-peak periods could drop by about 3 per cent because of increased competition. The director of lobby group Energy Users Association of Australia, Roman Domanski, said the huge growth in peak summer demand caused by increased use of air-conditioners highlighted the need to accelerate demand-side management. The Victorian government is finishing the installation of a new generation of "smart" electricity meters that would allow households to manage their consumption more effectively.

Mr Domanski also said energy flows back to Tasmania would probably be limited to about 300 Mw because competition from the state's hydro power "will deliberately constrain supply". A spokesman for Hydro Tasmania denied the charge, claiming it was limited by the capacity of the state's system to absorb and use the power. Hydro Tasmania chief executive Geoff Willis said:"This will see more energy produced from existing catchments that, together with the wind-farm potential, will mean more renewable energy is produced. "Siemens, the consortium leader, provided the technology for the interconnector, the undersea cables were supplied by Prysmian and National Grid will manage the link.