The giant undersea electricity project connecting Tasmania to the mainland is in jeopardy.

Tasmania's Premier, Jeremy Rockliff, has formally written to the Commonwealth to renegotiate the joint funding pact signed last year by Tasmania, Victoria, and the Commonwealth for the ambitious Marinus Link undersea power cable project.

The Marinus Link interconnector, a core element of Tasmania's “battery of the nation” strategy and one of the Australian Energy Market Operator's top priority projects, is designed to bolster Tasmania's capability to transmit power from its renewable energy initiatives to the mainland. 

The initial cost estimates ranged between $3.1 billion and $3.8 billion, with 80 per cent to be funded through loans and the remainder to be equally divided between Tasmania, Victoria, and the Commonwealth.

Premier Rockliff has indicated that the anticipated cost of the Marinus Link project has increased significantly, without specifying exact figures due to ongoing tender proceedings. 

He says that despite the project's importance, there exists a financial threshold that Tasmania cannot surpass.

In response to the cost surge, Premier Rockliff has engaged in discussions with Prime Minister Anthony Albanese and Energy Minister Chris Bowen to explore alternative funding models. 

This move aims to ensure that the financial burden of the project is equitably distributed and lessened for Tasmania.

The project's supporters, including Hydro Tasmania and wind farm proponents, are poised to benefit from enhanced access to the mainland power market. 

However, increasing concerns from groups such as environmental activists, energy market analysts, and even traditional Liberal Party supporters, including small business owners and farmers, are prompting Tasmanian officials to reassess their stance on the project.

Premier Rockliff faces the challenge of maintaining support from not only project backers but also key Independent MPs whose votes are crucial for his minority government's stability. 

The government's recent announcement aligns with the concerns expressed by these Independents, suggesting a need to strike a balance between economic viability and appeasing local constituents.

At the core of the Marinus Link debate is the question of cost distribution, benefits, and financial feasibility. 

While the Tasmanian government argues that the project would reduce overall power bills in the long term, critics worry that Tasmanian residents and businesses might shoulder disproportionate costs without proportionate benefits.