Basslink 2 on drawing board, Transend looks to secure energy future

Hobart Mercury
Friday 14/11/2008 Page: 13

Transend is considering a second Basslink connection with Victoria, as concerns about Tasmania's future energy security grow. The transmission company's annual report says Tasmania is at risk of energy constraints because of its heavy reliance on hydro-electricity. "This means that even with sufficient installed capacity to sleet peak demand, the Tasmanian power system may not be able to meet energy needs due to the unavailability of water," it says.

Energy Minister David Llewellyn said a second cable may be needed, not for energy security, but to export energy interstate. "We are aware that, as part of their long-term strategic planning, Transend has considered the potential impact of an expanded mandatory renewable energy target and the proposed carbon pollution reduction scheme on new energy investment in Tasmania," Mr Llewellyn said.

"It's entirely reasonable that in the longer tern, new investment in renewables could warrant serious consideration of a second cable to transport Tasmania's abundant renewable energy to the National Electricity Market. "That said, the project is not currently under active consideration by the Government." Transend has warned its capacity to transfer more equity to Hydro Tasmania is limited.

In the past financial year, the company has injected $50 million into Hydro Tasmania and taken on $220 million in debt. Aurora Energy has posted an after-tax profit of $27.2 million. The profit came as the energy retailer acknowledged the hardship caused by power price hikes last financial year. Prices rose by 15.7 per cent in January, with an additional 4 per cent rise in July and another 4 per cent increase mid-2009.

Aurora chief executive Peter Davis said the pricing determination had allowed the company to start a $588 million capital investment program to cater for customer demand. However, he acknowledged the increases across the business and residential sectors had placed extra pressure on Tasmanian families.

"We are committed to working with community groups and our customers to ease the impact of the price increases through initiatives such as our Hardship Program and energy efficiency awareness campaigns," Dr Davis said. During 2007-08 more than 1069 customers were assisted with hardship payments totalling $92,541, an increase on the previous year when 930 customers received payments totalling $88,119.