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Summary
The release of the Project Assessment Conclusions Report (PACR) for Project Marinus is an important point in the analysis of the project but it is not in itself a green light for the project to go ahead and it does not guarantee that the project is a viable investment and says nothing about how the project will be paid for.
The economic modelling done for the PACR show benefits exceeding costs across the whole NEM for a range of scenarios. However ‘perfect foresight, least cost’ modelling is a long way from the reality of how developments take place in the real world.
As with any modelling, the benefits are highly dependent on input assumptions. The modelling assumptions closely follow those in the market operator’s 2020 Integrated System Plan. However historical evidence suggests that traditional modelling consistently understates how rapidly costs can fall for new distributed technologies such as solar PV, battery storage and electric vehicle integration with the grid. Despite the rigour of the costing estimates for Marinus, large engineering projects are often subject to cost increases and unexpected complications.
Despite the unresolved issues around who pays for the Marinus project, the political momentum behind the project suggests that it is likely that some combination of partial solutions to the issues of uncertainty and financing will lead to the project being contracted either on or before the current Final Investment Decision target date of December 2023.
