Genex Power has bought the 50MW Jemalong solar project in NSW as it looks to its next stage of developments once it has the financing for its flagship solar and pumped hydro storage project in Queensland in place.
The purchase of the 50MW Jemalong project, near Forbes, was announced on Friday, and will see Genex take control of an undeveloped project that was put up for sale earlier this year by Vast Solar, adjacent to the 1MW pilot plant for its concentrated solar thermal power technology, using solar towers and storage.
Vast Solar had proposed to use the site to build a hybrid plant consisting of a 30MW CSP facility with the 50MW of solar PV, but put the PV project up for sale in May, apparently so it could look to use the funds to pursue its technology elsewhere. It is though it needs a region with a better solar resource than offered in central west NSW.
In any case, Genex plans to construct the 50MW solar plant in 2019, once it has completed contacting and financing for the world-leading solar and pumped hydro storage project based in the old Kidston gold mine in north Queensland.
The first 50MW solar farm has been built, but Genex is looking to add another 270MW solar farm, along with a 250MW pumped hydro facility, with eight hours storage, using existing pits at the former gold mine.
The project is considered crucial to the development of further wind and solar projects in north Queensland, because its spinning turbines will add the storage and “synchronous generation” that the Australian Energy Market Operator will want to see in the region.
Genex director Simon Kidston says negotiations for both the PPA for the solar-hydro project, and the debt financing, are getting close to completion. It has been earmarked for $516 million of low cost finance from the Northern Australia Infrastructure Facility,
Among the options on the table are a financing agreement that could cover the already completed 50MW Kidston solar farm, which has a power purchase agreement locked in. That would provide the certainty of a PPA combined with the uncertainty, and potential upside, of a merchant plant in NSW.
A project of the size of Jemalong could earn up to $19 million based around current wholesale prices and renewable energy certificate (LGC) prices. Even if LGC prices fall to near zero, as they are expected to do by many as the renewable energy target is meet and exceeded by 2002/21, a 50MW project could still pull in around $10 million a year in pre-tax earnings.
“We are pretty excited by (the purchase of Jemalong),” Kidston told RenewEconomy. “We see it as a pipeline project for next year.”
Kidston said the company has a “good line of sight” for funding for the hydro project and solar farm and “close to finalising” a contract. “Now we are thinking about what’s next for next year.”