Australia's last paper mill, Boyer, told power grid insufficient for electric conversion

Australia Broadcast Center

29-06-2025

On the banks of Hobart's Derwent River lies Australia's first, and now last, paper mill.
The Boyer Mill is a piece of history.
It is also reliant on some historical technology — coal burners.
Coal-fired boilers have been creating the steam used in the paper manufacturing process since the mill opened in 1941.
"That steam is used for softening [wood] chips in the pulping process, but its primarily used for drying paper in the paper machines, it's critical to our operation," the mill's general manager, Patrick Dooley said.
The mill's new owner, businessman David Marriner, wants to cut off its coal connection and bring in electric boilers.
The Boyer Mill is Tasmania's fourth-largest carbon emitter.
The switch to electric would cut the plant's on-site emissions by about 95 per cent — roughly the same as taking one third of Tasmania's cars off the road.
There is just one problem — getting the extra electricity needed.
Mr Marriner said he had been told by state-owned power company Hydro Tasmania that it could not supply him with power from the Tasmanian grid, due to a lack of availability.
Instead, it would have to import electricity from Victoria, which Mr Marriner said was offered a much higher price.
The Boyer Mill is one of the state's largest power users.
It currently uses around 100 megawatts — the electric boilers would require another 45 megawatts.
"I feel stressed and somewhat frustrated in the discussions and negotiations we've been having," Mr Marriner said.
The new boilers have been purchased from a Norwegian company and would be ready for installing in 15 months' time.
Hydro Tasmania chief executive Rachel Watson said Tasmania's power and supply were in balance.
"Until new generation is built, any large base load increases would be met by increased gas generation or imports from the mainland," Ms Watson said.
She said any energy it sourced would be based on the cheapest available.
"At times, that can be above what a customer wants to pay.
"Hydro Tasmania remains focused on achieving a sustainable commercial return for its owners, the people of Tasmania."
Boyer's Boiler No. 5, which was installed in 1991, chews through about 88,000 tonnes of coal a year.
Since the mill lost its Tasmanian coal source three years ago, all of it has been brought in by a chartered ship from Newcastle, New South Wales.
"It's unloaded and stored at a Bell Bay site then we utilise our contract with TasRail to bring the coal on a daily basis," Mr Dooley said.
That coal comes with a $12 million a year price tag.
"Now we've added [up] all of that logistics in terms of chartering the ship, storing it, unloading it and storing it at Bell Bay and then reloading it and bringing it down here," Mr Dooley said.
The upgrades received backing at this year's federal election, with Labor tipping in $24 million.
Of that figure, $9 million was to "stabilise its operations and prepare major investments to decarbonise and diversify its production", with the remainder to be spent on the electrification upgrades themselves.
This is not the first time the Boyer Mill's electrification plans have been knocked back due to its energy supply.
Under the previous ownership of Norwegian company Norske Skog in 2023, the company's plans for electric boilers were halted, when its request for 50 megawatts was refused by Hydro Tasmania.
When Mr Marriner purchased the mill in February this year, Liberal spokesperson Nick Duigan downplayed concerns about a lack of power.
In response to Mr Marriner's concerns, Mr Duigan told the ABC there was energy "through" Hydro Tasmania.
"Our major industrials have significantly discounted rates, as we've encouraged the economic development these businesses offer the state," he said.
"When additional supply is requested, Hydro Tasmania commercially negotiates a price."
Hydro Tasmania said the total capacity of its system was more than 2,600 megawatts.
The last major addition to Tasmania's power grid was the 112 megawatt Granville Harbour Wind Farm in 2020.
The Northern Midland Solar Farm will provide another 288 megawatts when it is commissioned in 2027, and Hydro has agreed to purchase energy.
Many other projects have been tied up in approvals processes for years.
Last week, a decision on approvals under the Environment Protection and Biodiversity Conservation Act for the proposed Robbins Island wind farm was delayed for the seventh time.
However, a new 250 megawatt solar farm at Weasel Hill in the Central Highlands received federal approval this month. It does not have an expected completion date.
Adding to frustrations, Mr Marriner said Hydro had exercised a contractual right to cut off power supply "multiple times" since he took ownership of the factory earlier this year.
"We get a credit for that, but it doesn't necessarily offset the cost of a total shutdown," he said.
He said it comes with little warning, and impacted production schedules.
Ms Watson said the trigger was one reason why Tasmania's major industrial customers received cheaper power.
"It is part of their contract and we always give advanced notice. This is a very common arrangement for major industrials in the National Electricity Market," she said.
Mr Marriner also said Hydro had been unsure it could supply power from Tasmanian sources for another of his business interests.
His pre-cast concrete factory at Bridgewater produced the 1,082 concrete segments for the new Bridgewater bridge.
Last year he unveiled plans to expand and convert the factory, so it could create 1,700 homes a year, made from precast concrete.
The Tasmanian Chamber of Commerce and Industry's Michael Bailey has been saying for two years that Tasmania is in an "energy crisis".
He is frustrated that nothing has changed.
"We're trying to grow industry, we're trying to build business, and it's impossible to do that without enough power," Mr Bailey said.
He said the key piece in getting new generation projects moving was the Marinus Link.
"What Marinus will bring then is the business case for those major wind production sites that we desperately need."
It is a proposal for two 750 megawatt high voltage energy cables between Tasmania and Victoria, and would allow for more energy trading between the two states.
The federal, Victorian and Tasmanian governments are due in August to make a final investment decision on the first cable.
Ray Mostogl from the Tasmanian Minerals, Manufacturing and Energy Council said the state should be focusing on building a few very large generation projects, close to existing transmission corridors.
Mr Mostogl said that could help avoid the cost of building new transmission lines and potentially cause less community angst.
"It's not just power, it's power at the right price," he said.
Mr Bailey said if any of the state's four major industrials — Boyer Mill, Liberty Bell Bay, Bell Bay Aluminium and the Nystar zinc smelter — were to close, it would have ramifications on the entire state's power grid.
"Not only would we see the cost of transmission increase for all Tasmanian households, but we'd see much more insecurity across our network. We'd see blackouts," Mr Bailey said.
He also said Hydro's ability to switch off power to the major industrials helped balance the network.
Mr Marriner said he hoped "common sense" would prevail, and that the Boyer Mill would be able to access power at a cheaper rate, even if it were sourced from Victoria.
But the first choice is for Tasmanian-made green energy.
"If you go back in our history, the one great asset we do have is in fact clean energy, and we should be all very appreciative for that," he said.