Basslink to Pay $38.5M Damages Over Tasmania’s 2015 Power Outage

December 4, 2020 Updated: December 4, 2020

Energy providers, Basslink have been ordered by an arbitrator to pay the Tasmanian government $38.5 million in compensation over an outage in December 2015 due to failure of its undersea interconnector from Victoria.

A justice mediator on Thursday night decided in favour of the Tasmanian government and state-controlled company Hydro Tasmania on several long-standing disputes related to an electric and telecommunication outage on the island.

He also found that Basslink was able to fulfil their contractual obligations during the six-month-long blackout, dismissing Basslink claim this was an unforeseeable event or force majeure and their claim for unpaid fees of A$31 million.

Basslink’s chief executive officer Malcolm Eccles confirmed in a statement (pdf) that disputes relating to the Asset Management Plan and the Marine Disaster Recovery Plan have been settled separately.

The arbitrator also threw out a claim by the Singapore-based Keppel Infrastructure Trust owned company that Hydro Tasmania owed them $31 million in unpaid fees for the same period during the outage.

Eccles said that the organisation would take time to review the rulings and determine the next steps.

“We are obviously extremely disappointed with the outcomes,” he said. “We will need some time to review the decisions and consider the implications. In the meantime, Basslink continues to operate efficiently and reliably, connecting Tasmania to the national electricity market.”

The states Energy Minister, Guy Barnett said the mediator award means the government now has to work through the details of the compensation. But the top priority is to ensure that “Tasmania’s energy position remains secure with water in storage above the prudent storage level,” he said.

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The news of the findings come as Tasmania has committed to becoming one of the worlds most advanced in renewable energy and has a project worth $50 million to invest in its hydrogen industry.

On Nov 27, Premier Peter Gutwein announced in a press release that the island had become the first in the nation to become 100 percent self-sufficient in renewable energy after the 29th wind turbines at Granville Harbour officially come online.

When the final two turbines are completed, the wind farm will generate up to 10,741 Gigawatt hours of power. This is said to be above Tasmania’s average annual electricity demand of 10,500 GWh.

The failure of Basslinks’s undersea interconnector from Victoria took place between December 2015 to June 2016. During the outage, Tasmania’s hydro energy generators were unable to keep up with demands due to record low rainfall forcing the government to import 80 temporary diesel generators to increase the output of the Tamar Valley Power Station.

In a parliamentary inquiry into the cable failure, Basslink and Hydro Tasmania both offered differing accounts of what happened. Basslink claimed that the cause of the outage was unknown, while the state-owned company said that it was due to degrading caused by demand outstripping capacity.

The dispute lasted five years and was eventually passed to an arbitrator in April.