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Tasmanian Energy Development Conference: Small Business Electricity Consumer Perspective on Project Marinus

This presentation discusses the impact of electricity price rises on small businesses in Tasmania and the need for reductions in electricity prices. It also examines the Marinus investment project, its cost implications, and the potential beneficiaries. Note: This presentation is for general information purposes only and does not constitute personal financial product advice.

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Tasmanian Energy Development Conference: Small Business Electricity Consumer Perspective on Project Marinus

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  1. Tasmanian Energy Development Conference Tasmanian small business electricity consumer perspective - project Marinus November 2015 June 2019

  2. Acknowledgement Consumer representation at this event is funded by Energy Consumers Australia (ECA) Goanna Energy Consulting Pty Ltd

  3. A reminder – electricity prices • Electricity price rises over the past decade, due to increases in network charges and other components, have hurt all electricity customers. Small businesses where energy costs are a major business input have been hit especially hard. • Network (TasNetworks) charges make up around half of every electricity bill. • As the ACCC and Grattan have previously pointed out – Tasmanian electricity customers are paying for significant previous over-investment in Tasmania’s electricity network – providing scope for significant reductions in capex and prices. Tasmanian electricity prices are higher than they should be and need to come down. Goanna Energy Consulting Pty Ltd

  4. The Marinus investment Project Marinus – a $3.1 billion (?) investment in the electricity network – a second interconnector(s) and upgrades to Tasmania’s transmission system. The same as the current combined value of Tasmania’s entire transmission and distribution network ($3.1 billion). With return on and return of capital costs on the Marinus investment at around $250 million per year. A reasonable question is – who will pay for that? Goanna Energy Consulting Pty Ltd

  5. Price outcomes and security • Information about price impacts is not yet available – it’s early days of detailed modelling by TasNetworks. • Even if Marinus is built as a “merchant” link, ie not regulated, parties such as Hydro Tasmania and Aurora could be expected to contract with the link owner, with a flow on to prices. The TSBC expects that such information will be available as part of the investment decision making process, regardless of where funding will come from. • The Tasmanian Energy Security Taskforce determined that with: appropriate hydro storage management; Basslink 1; the Tamar Valley Power station on standby; additional on-island wind generation and other innovations:- security of electricity supply is adequate. Consumers do not need to pay for additional security. Goanna Energy Consulting Pty Ltd

  6. Beneficiaries • Benefits - • “unlock broader economic value in regional communities in Tasmania and Victoria”. • “In Tasmania construction and operation of Marinus Link is estimated to provide economic stimulus of over $600 million, with more than 500 direct and indirect jobs during peak construction and thousands more in related projects”. • But: • “Most energy market benefits would be realized in mainland NEM regions” The bottom line – Tasmanian small businesses don’t want to see any increase in their electricity charges. The most important benefit to Tasmanian electricity customers is for project Marinus to result in reduced electricity prices. Goanna Energy Consulting Pty Ltd

  7. Thank you General Information Only: Whilst the TSBC and Goanna have endeavoured to ensure that the information contained within this presentation is accurate, we do not make any warranties or representations in relation to the accuracy of the information contained herein. This presentation is intended as general advice only and is not intended to constitute personal financial product advice. It is has been prepared without taking into account the personal circumstances, financial needs or objectives of anyone person or organisation. Accordingly individuals or organisations, who seek to rely on information contained within this presentation, should undertake their own independent enquiries and seek legal or financial advice prior to doing so. Examples used in this presentation are for illustrative purposes only. Goanna Energy Consulting Pty Ltd

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