AI Factory Raises Questions About Marinus Link Future
Topic: AI
Thursday, 18 June 2026, at 5:18 am
Tasmania is a good place for AI data centers because of its cool climate and access to renewable energy. Firmus Technologies plans to build a site at Bell Bay.
In short:
Firmus plans to build data centers in Tasmania's north, which will need about 400 megawatts of energy.
The expansion of energy-intensive data centers in Tasmania makes the business case for the Marinus Link project uncertain, according to Climate Change Authority chair Matt Kean.
What's next?
A Marinus Link spokesperson says more data centers prove the project is necessary.
Energy experts warn that the business case for Marinus Link is not strong if data centers keep expanding in Tasmania.
Firmus Technologies wants to use a lot of Tasmania's energy to power three AI data centers in the north.
The company has already secured over 100 megawatts for its St Leonards site, which is under construction.
The AI data center at St Leonards will produce 'AI tokens' for tools like ChatGPT.
Firmus plans two more centers: one in Bell Bay and one in Wesley Vale. The three sites will need about 400 megawatts of power, which is one-fifth of Tasmania's current power use.
The high energy needs of these data centers make the business case for Marinus Link uncertain.
The $5 billion Marinus Link project will connect Tasmania and Victoria with a 255-kilometer undersea cable, allowing more energy trading between the states.
Climate Council Authority chair Matt Kean talked about Tasmania's evolving market at the Morgan Stanley Australia Summit.
Mr. Kean said the market is changing fast, and government policy needs to keep up.
Firmus declined to comment on this story.
Premier Jeremy Rockliff is with Firmus Technologies co-CEOs Tim Rosenfield and Oliver Curtis.
'You can't do both,' says an energy expert.
The $5 billion Marinus Link is a proposed undersea data cable between Tasmania and Victoria.
Firmus Technologies will become Tasmania's biggest power user if it builds three 'AI factories'.
The Marinus Link project will allow energy to be sent between Tasmania and Victoria, and into the National Electricity Market.
The project will let Tasmania import cheap renewable energy and store its hydropower to export to the mainland when needed.
In February, the Australian Economic Regulator approved the first stage of the project.
An energy analyst says Hydro Tasmania's claim that Marinus Link will make the state an extra $450 million in profit a year is now questionable.
The Tasmanian government still supports the project, but energy analyst Marc White says energy commitments to data centers have weakened the business case.
Mr. White says there is a trade-off between supporting local customers and making profits from Marinus Link.
If energy is allocated to local businesses, it can't be used for trading on the market.
A stylized 3D graphic of the proposed Marinus Link project.
A Marinus Link spokesperson says more data centers prove the project is necessary, enabling new investment in renewable generation and load infrastructure.
The spokesperson says Marinus Link will let hydropower assets operate more strategically, storing energy when renewable supply is abundant and dispatching it when needed.
Power bill hike possible, report finds.
Tasmania's cool climate and access to renewable energy make it attractive for AI data center investment.
The $5 billion Marinus Link project has passed two major milestones.
Aside from Firmus's plans, Australian mining company Greenwing is also looking into data center expansion in Tasmania.
Greenwing wants to reopen the Que River Mine and assess if the site can host data infrastructure like data centers or AI infrastructure.
Data centers have spread rapidly across Australia, with 162 in operation and over 90 in the pipeline.
Firmus Technologies' AI factory in St Leonards will be operational early next year.
Grid-scale batteries across the National Electricity Market are expanding rapidly.
A new report says the rollout of affordable batteries has reduced Tasmania's competitive advantage in energy storage, eroding the business case for Marinus Link.
A new report concludes that the surge in power-hungry data centers across Australia is jeopardizing the country's energy transition.
The report predicts an electricity bill hike for Tasmanians if Marinus Link goes ahead.
The state only has a small surplus of energy beyond its current capacity.
The report says only a significant reduction in demand would make it viable to expand data center development in the state.
Thursday, 18 June 2026, at 5:18 am
Thursday, 18 June 2026, at 9:33 am
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