Hydro Tasmania has a specific role in the business operation of Basslink. Hydro Tasmania supplies the National Electricity Market with peaking capacity and has a financial arrangement with the owner of Basslink, National Grid Australia, for the use of the interconnector. Hydro Tasmania pays a facility feed to National Grid, and National Grid pays Hydro Tasmania the trading revenue from energy transfers through Basslink between Tasmania and Victoria and vice versa.
The Basslink Project’s financial arrangements became unconditional on 29 November 2002, which allowed the Basslink developer, Basslink Pty Ltd, to issue a proceed notice to its engineering, procurement and construction (EPC) contractor (a consortium of Siemens Limited and Prysmian) to commence the construction of the project.
The Board of Hydro Tasmania undertook a thorough assessment of the Basslink Business Case prior to financial close. This assessment revealed a robust and viable business opportunity from the development of the Basslink Project and consequently the project proceeded to financial close.
The benefits of Basslink to Tasmania are:
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optimisation of Hydro Tasmania's peaking capability
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substantial drought-proofing of Tasmania's electricity system
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stimulation of business growth in Tasmania via access to a more secure electricity system
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full development of Tasmania's world-class renewable energy resources
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a major contribution by Tasmania to Australia's greenhouse gas abatement responsibilities
The Basslink project was completed and commenced operation on 29 April 2006.