Australian renewable energy firm Hydro Tasmania has ended plans for a A$2bn ($1.76bn) wind farm on King Island.
Earlier in November 2012, Hydro Tasmania announced plans to construct the 600MW TasWind project on the island.
However, the changing economic conditions have increased capital costs of the project by about $150m.
The company found that extending TasWind as a staged connection to Tasmania would be more costly than other direct connection options between Tasmania and Victoria.
If completed, the 200-turbine wind farm would have generated 2,400GWh of renewable energy that would be enough to power about 240,000 homes.
The electricity generated from the project was planned to be connected to the National Electricity Market through a high-voltage underwater cable across Bass Strait to Victoria.
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By GlobalDataHydro Tasmania said it will now consider a possible second direct connector across Bass Strait.
Commenting on the decision not to go ahead any further with the TasWind project, Hydro Tasmania CEO Steve Davy said the feasibility work to date had clearly indicated the project was not economically viable.
"Our investigations eventually found that TasWind was not viable even if the RET was maintained at the existing level.
"We have exhausted all avenues by which this concept could progress and now do not believe it appropriate to continue with the feasibility study. We will now focus our resources on further investigating the benefits and viability of a second inter-connector as outlined in the Tasmanian Government’s recent state budget."
Davy said a second inter-connector could provide significant strategic advantages for Tasmania such as support for further renewable energy development, including increased output from hydropower and wind, as well as greater market competition.
