Basslink: a 'waste of public money'



Basslink is a proposed under-sea cable linking the Tasmanian and Victorian electricity grids. The Tasmanian government is a strong proponent of the Basslink project and has officially approved it, while the Victorian and federal governments are yet to endorse the scheme.

Basslink is not to be confused with the Duke Energy gas pipeline being constructed across Bass Strait.

The stated rationale for Basslink is to enable Tasmania to become a "full participant" in the national electricity market, to help meet the peak power needs in Victoria and to "improve the potential for economic growth in Tasmania".

Basslink is controversial, however, because the company constructing it will secure a guaranteed profit while the substantial risk will be borne by the public purse, and because of environmental damage expected to be caused by the project.

The Greens have a long-running campaign against Basslink, the Socialist Alliance campaigned in the July Tasmanian elections around a priority pledge to stop Basslink, and a community campaign in Victoria (supported by union bans) is opposed to the overhead transmission pylons at the Victorian end.

Environmental damage

The issue that initially caused the greatest controversy was the proposal to use a "monopole" cable — that is, a single cable to transmit electricity with return current travelling through the sea. After consistently rejecting the alternative "bipolar" cable (with current returning through a metallic return cable) as too expensive, Basslink proponents have agreed since April to abandon the monopole.

Monopole cables have been banned (or are being phased out) in Europe and other parts of the world because they cause significant corrosion, generation of chlorine and other negative effects. In addition to campaigns by environmentalists, lobbying by Duke Energy and Esso contributed to the decision to abandon the monopole due to anticipated corrosion of the gas pipeline and oil rigs in the Bass Strait.

While the bipolar cable will still produce magnetic currents that may have negative effects on marine life (including sharks, stingrays and whales), environmentalists generally agree that a metallic return could potentially solve many of the marine environment issues.

Nevertheless, anti-Basslink campaigners are concerned because Basslink proponents are not releasing detailed information about how the metallic return will be constructed and they cannot point to an example anywhere in the world of the sort of configuration they are planning to use. The fact that they were for so long planning to use outdated technology in order to save money raises questions about what other compromises they are prepared to make.

The bipolar cable will not be buried in a trench nor will it be enclosed with protective casing. Instead, the two heavy copper cables will be bundled with a third (fibre-optic) cable tied together with polypropylene rope. Christine Milne, the former state Greens leader and current adviser to Senator Bob Brown, argues that the ropes will have a limited life after which time the cables will separate increasing the magnetic field generated.

Milne also argues that Basslink proponents have not explained how the bipolar cable, long claimed to be unviable, has now become viable.

A significant environmental impact that has not been resolved is the increased damage that will occur downstream of the Gordon River hydro-electric power station in the Tasmanian Wilderness World Heritage Area. If Basslink proceeds, the pattern of energy produced by Hydro Tasmania will change. More energy will need to be generated in Tasmania during periods of peak electricity use in Victoria and less will be required at other times as energy will be imported from Victoria.

This will mean wider extremes in water flows ("drought-flood") downstream from the power station and increased damage to riverbank vegetation. This would represent a "systematic degradation of the ecological and geological features of the Gordon River, and therefore also the Tasmanian Wilderness World Heritage Area", according to the Tasmanian Conservation Trust.

Financial risk

Milne argues that Basslink is a bad proposition for Tasmania on economic grounds as well as environmental grounds. She told Green Left Weekly that "the company constructing the link has a deal in which there is no financial risk for the company" and that Premier Jim Bacon's Labor government "is guaranteeing to pay a facility fee [for transmissions along the link] at a fixed price for 25 years".

"All the risk lies with the Hydro and therefore the people of Tasmania", she added.

The government is refusing to disclose the fee that will be paid, citing commercial confidentiality, however Milne said that an assessment emerged at the latest hearing of the Joint Advisory Panel on Basslink that the facility fee is around $70 million per year.

"I don't have confidence that Hydro Tasmania will be able to return that fee by gambling in the national electricity market, let alone make a profit", Milne told GLW.

According to evidence supplied by Hydro Tasmania in October 2001, when the cheaper monopole was planned, "the break-even point for the project for Hydro Tasmania has about a 65% probability of being achieved" and "an increase in costs of the order of 10% changes the project's viability to having a 50% probability of not breaking even".

At the time, the Hydro argued that a metallic return would increase costs by $75-100 million — that is, up to 20%. According to Milne, the Hydro is now saying that the costs won't be as high as that. She argues that a 50-65% chance of merely breaking even is too much risk for such a large amount of public money.

Milne argues that 25 years is a long time to be locked into a fixed contract when the electricity market is undergoing significant changes, including the development of new wind and gas power projects. She told GLW that a Victorian report argued that Basslink was the second worst option for meeting peak power needs (the worst option being to do nothing) and that there are indications that by 2010 some new wind farms around Australia will be unviable.

Since Basslink will result in significant transmission losses, Milne argues that this will result in additional costs being borne by the Hydro and/or a disincentive for Victorian power companies to source their power from Tasmania.

Other hidden costs include transmission losses within Tasmania that don't seem to have been taken into account and the increased cost of maintenance of the hydro-electric generating equipment. Tasmania's power stations are not designed to supply peak load and using them in such a way will dramatically reduce their life expectancy. A retired Hydro design manager wrote in a March 13, 2001 letter to the Hobart Mercury that the machines that would be used have "passed their designed working life" in one case and "have some fundamental design faults and cracks" in another.

Greenhouse gas emissions

One of the arguments used by the Greens to oppose Basslink is that it will "replace hydro power with dirty coal power in every Tasmanian home and business". Milne told GLW that Tasmania ought to become a "model of sustainable energy" and that Basslink would compromise the ability of Tasmanian businesses to market themselves as "clean and green" due to being supplied by "dirty coal power".

By contrast, the Socialist Alliance is concerned primarily with reducing the overall amount of greenhouse gas emissions Australia-wide. "For us it is not a question of being 'tainted' by coal power, but of finding a sensible plan to reduce overall emissions", Kamala Emanuel, who was a Socialist Alliance candidate for the seat of Bass in the July state elections, told GLW.

Basslink could conceivably play a role in supplying increased renewable energy to Australia if wind farm proposals for the north-west of Tasmania were developed.

Clive Hamilton of the Australia Institute told GLW that Basslink should not be rejected out of hand. "Before environmentalists categorically reject Basslink, they need to be aware that they would be ruling out a major source of renewable energy [wind farms in northern Tasmania] and that is not something that should be done lightly."

Hamilton believes that the rules of the national electricity market should be changed "so that the maximum greenhouse benefit is achieved, that is, that increases in renewable energy production should be used to drive out coal production. That would make Basslink much more attractive environmentally."

Nevertheless, he believes that "Basslink needs further study" and that "to be acceptable, Basslink would need major changes".

"Basslink is a major greenhouse gas emitter which ... will contribute an extra one million tonnes per annum of CO2 emissions by 2012", according to an August 2001 submission prepared by Bob Brown's office. "This is because the main effect of Basslink on mainland power generation is to increase the use of coal-fired power and displace closed-cycle gas turbines." Brown argued in April that "no evidence" had been provided by Basslink proponents to rebut this argument.

Both Milne and Emanuel believe the real reason the Bacon government is so strongly pushing Basslink is to prepare the ground for privatisation of Hydro Tasmania. Emanuel told GLW that "this would not be surprising since the purpose behind creating the national electricity market in the first place was all about privatising electricity utilities around the country".

"In its current form, Basslink is not going to improve the electricity service for households nor will it be used to increase overall production of renewable energy", Emanuel said. "Therefore it is a waste of public money that could be better spent.

"It is not enough to change the rules of the national electricity market, the market needs to be abolished altogether and replaced by a single, publicly run electricity commission. Along with promoting energy efficiency measures, the first task of such a commission would be to increase production of renewable energy.

"Until it is established that Basslink could contribute to such a project, the Socialist Alliance will oppose it."

From Green Left Weekly, September 4, 2002.
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