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Hydro Tasmania will not proceed with the TasWind project on King Island. CEO Steve Davy said the feasibility work to date had clearly indicated the project was not economically viable.

The original TasWind concept announced in November 2012 was for the construction of a 600 megawatt wind farm on the island, with the power generated to connect to the National Electricity Market (NEM) via a high-voltage underwater cable across Bass Strait to Victoria. Hydro Tasmania’s decision not to proceed any further with the TasWind project was based on analysis showing:

  • It was not economically viable as a stand-alone wind farm project or as a staged connection to Tasmania.
  • Changing economic conditions had seen the estimated capital costs for the wind farm alone increase by around AUS$150 million.
  • Extending TasWind as a staged connection to Tasmania would be more expensive than other direct connection options between Tasmania and Victoria.

Over the past 12 months, the original business case projections had been impacted by a range of factors, including:

  • a lower Australian dollar increasing the cost of equipment such as wind turbines, high voltage direct current (HVDC) cables and converter station equipment;
  • impact on transmission efficiency as a result of loss of industrial load near the likely cable connection point in Victoria;
  • reduced revenue projections as a result of declining demand across the National Electricity Market (NEM); and
  • projected increased on-island construction and infrastructure costs.
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