Genex locks in EPC contracts, other partners for flagship pumped hydro project

The construction of one of Australia’s first pumped hydro energy storage facilities in several decades is ready to go ahead after project developer Genex announced that it had secured contracts with key construction partners.

Genex is proposing to build a 250MW/2,000MWh pumped hydro energy storage facility at the site of the former Kidston goal mine as part of a bigger vision for a clean energy precinct in the region.

It announced on Wednesday that it had signed an engineering, procurement and construction (EPC) contract with a McConnell Dowell and John Holland Group joint venture, which will undertake the substantial construction work at the Kidston site.

The joint venture will complete the construction of dam infrastructure, underground works, and the construction of generator infrastructure on site for the production of electricity and pumping of water.

The Kidston pumped hydro project is the flagship project for Genex and will utilise two disused gold mines, using the mining pits to store water, moved between the two pits as needed. One solar farm is already operating at the site, but Genex hopes to add more, and a wind farm too.

Beon will also be engaged to construct the necessary grid connection and substation works at Kidston that will be used to link the pumped hydro project to the transmission grid.

Genex said that it had also given “notice to proceed” to network utility Powerlink to commence construction of a new transmission line between Kidston and the main grid, which will involve the construction of a new 186km 275kV transmission line from Kidston to a new switching station to be constructed at Mount Fox, roughly half way between Townsville and Cairns.

The signing of the construction contracts is a major milestone for the company, which said that with the project contracts now in place, the construction works for the 250MW/2,000MWh pumped hydro energy storage facility was ready to commence with around 800 workers to be engaged on site.

The announcement follows the company securing the necessary finance for the project through a fresh share placement on the ASX after prolonged negotiations with potential equity partners fell through.

Genex announced last week that it would raise a further $115 million in equity from a mix of institutional and existing retail shareholders, and a $25 million investment from a key partner in J-Power, allowing the company to retain a 100 per cent equity stake in the Kidston pumped-hydro project.

The Australian Renewable Energy Agency also agreed to support the project with a $47 million grant, with Genex previously securing a $610 million loan from the Northern Australian Infrastructure Facility.

“Following on the heels of our successful equity capital raising last week, which secured the final piece of the project financing for the Kidston Pumped Storage Hydro Project, I am delighted that we have now executed all the Project agreements and kicked off work to develop the transmission infrastructure which will connect the Project to the National Electricity Market,” Genex CEO James Harding said.

Genex has also signed a maintenance deal with Austrian hydroelectric firm Andritz Hydro for the ongoing upkeep of the pumped hydro project and an owner’s engineer contract with the Tasmanian government-owned Entura.

Project financials released by the company show that it expects to generate relatively stable revenues from the project through an energy storage service agreement struck with EnergyAustralia.

Through the contract, Genex will receive regular access payments from EnergyAustralia, which will be able to draw upon the Kidston storage project for additional supplies of electricity at key periods, helping the electricity retailer to mitigate its exposure to electricity price spikes during peak demand periods.

The Kidston pumped hydro energy storage project will be the first constructed in Australia for several decades and just the fourth ever established in Australia, alongside facilities at the Snowy Hydro scheme and the Shoalhaven scheme in New South Wales and the Wivenhoe Dam in Queensland.

Genex intends to cluster a number of wind and solar energy projects around the pumped hydro facility and already operates the 50MW Kidston solar farm.