Basslink planned to utilise mono-pole technology that would have relied on the water of Bass Strait to be the conductor of the return path needed in any electricity transmission system.

However, energy giants Duke Energy and Esso feared rogue electrical currents would have accelerated corrosion in the $15 billion worth of metal infrastructure in Bass Strait.

To allay fears of collapsing oil and gas platforms, Basslink said it would spend an extra $20 million to add a return wire to the undersea cable.

The Basslink interconnector will run from Loy Yang in Gippsland across Bass Strait to Bell Bay in northern Tasmania. The 280km undersea cable component will be among the longest of its type in the world, Basslink said.

Basslink said the aim of the project was to enhance security of supply on both sides of Bass Strait by protecting Tasmania against the risk of drought and protecting Victoria and other southern states against the forecast shortage of peak load power.