Genex says flagship pumped hydro project needs more time to lock in partners

Genex Power has pushed back deadlines for signing off the financing for its flagship pumped hydro energy storage project, but insists that the ground-breaking project is ready to go.

In an announcement to the ASX on Wednesday, Genex said it would miss the September 30 deadline it had set itself to secure financial close for the Kidston Pumped Hydro project, as the company works though the project’s final details, including negotiation with Powerlink on connections to the transmission network.

However, the company told RenewEconomy that the delay did not relate to any substantial issues faced by the project, and that the project remained shovel ready and ‘ready to go.’

The Kidston Pumped Hydro project would be Australia’s first new project of its kind for several decades, and would deliver a substantial 250MW/2,000MWh of energy storage in North Queensland.

The project, which will repurpose two disused mine pits for pumped hydro energy storage, has faced a number of delays over the last year, first triggered by EnergyAustralia temporarily backing out of a deal to purchase power from the facility.

Project partners agreed to extend the deadline for Genex to reach financial close on the project at the start of July, to the end of September, but has again indicated that it needs more time to finalised negotiations with its project partners.

The ASX-listed Genex had previously said that it was targeting a September 30 deadline for financial close, but said it was obligated to updated the market when it became clear it would miss the deadline.

It is still confident of locking in $610 million commitment from the Northern Australia Infrastructure Facility to help finance the project, and it had already agreed provide Genex until January 31 2021 to seal the deal.

Genex added that the Queensland Government, which heads to an election at the end of October, had reaffirmed its commitment to make a $132 million investment in new transmission network infrastructure to support the project. The election is unlikely to impact on the Queensland government’s commitment.

Genex said it was progressing the final stages of negotiations with its preferred equity partner, which would take an ownership stake of up to 50 per cent in the pumped hydro storage project.

“We are pleased that the Queensland Government has reaffirmed their commitment of $132 million to help fund the construction of the Kidston Pumped Storage Hydro Project Transmission Line,” Genex CEO James Harding said.

“The development of the Kidston Pumped Hydro Project will create a peak workforce of over 500 people per annum in regional Queensland, secure power supply to local communities and unlock significant clean energy generation in the region.”

“I would like to thank all stakeholders, particularly NAIF, ARENA, the Queensland Government and Powerlink for their ongoing support of the project as we seek to finalise negotiations on the project financing,” Harding added.

Genex is looking to develop a substantial portfolio of clean energy developments clustered around the Kidston pumped hydro project, including the already operating 50MW Kidston solar plant, which may be expanded with an additional 270MW solar project and 150MW of wind power capacity.

Genex also already operates the 50MW Jemalong solar project, and will expand its storage portfolio through its ‘Como Project’ strategy, which will start with a 50MW/75MWh big battery at Bouldercombe in Queensland, for which it recently secured a land access deal with Powerlink.

The price of Genex shares fell slightly on the open of trading on Wednesday following the announcement, dropping around 2 per cent to 20.5 cents per share.