AI Data Centers Cast Doubt on Marinus Link Energy Project Viability in Tasmania

The burgeoning demand for energy from artificial intelligence data centers in Tasmania is raising serious questions about the future of the Marinus Link, a major energy infrastructure project. Energy industry experts are warning that the business case for the $5 billion Marinus Link, a proposed undersea cable connecting Tasmania and Victoria, appears increasingly uncertain if power-hungry AI players continue to expand in the state. Firmus Technologies, a Singaporean firm, plans to establish three AI data centers in Tasmania's north, requiring an estimated 400 megawatts of power. This demand is significant, representing about two-fifths of the state's current power supply. The potential strain on Tasmania's energy resources has led Matt Kean, chair of the Climate Council Authority, to express doubts about the Marinus Link's economic feasibility. He stated that the proposed data centers, if they proceed, "bring into doubt the business case for the Marinus Link."

The Marinus Link project, a joint initiative of the state and federal governments, involves a 255-kilometer undersea cable designed to facilitate energy trading between Tasmania and Victoria. It promises to allow Tasmania to import cheaper renewable energy while enabling it to export its own hydropower when needed. The project received approval for its first stage earlier this year. However, Hydro Tasmania's earlier projections of the project generating an additional $450 million annually are now being questioned by energy analysts in light of the escalating energy demands from AI infrastructure. Firmus Technologies has declined to comment on the matter.

“

Just look at Tasmania, for example. We have to say that the Firmus proposal and the other data centre proposals for Tasmania, if they get up, does bring into doubt the business case for the Marinus Link. That's the reality.