After overcoming a software issue that hampered output and earnings at the Kidston solar project, Genex Power has told shareholders that it is nearing final sign-off on its massive Kidston pumped hydro project, and expects to commence construction before the end of the year.
The company announced earlier in the year that the Kidston solar project had suffered a one-off outage that had been identified in the project’s inverters. Genex said that it had resolved the cause of the bug, but that the outages had made a significant dent in revenues.
Announcing the company’s financial results for the 2019-20 year, Genex said revenue totalled $12.3 million, which were largely derived from the Kidston solar project, a fall of 23 per cent compared to the $16 million in revenues reported in the previous financial year.
Despite the now resolved issues at the Kidston solar project, Genex remained optimistic about the company’s outlook, with the company on the verge of reaching financial close on the 250-megawatt Kidston pumped hydro storage project.
An announcement on financial close for the pumped hydro project is likely imminent, with the company expecting to secure sign off before the end of September.
With an agreement with an EPC contractor already secured, with a total outlay of $600 million, Genex expects to commence construction on the Kidston pumped hydro storage facility before the end of the year.
Unlike Australia’s existing pumped hydro projects, which utilise dams on existing water sources, the Kidston pumped hydro project is seeking to reuse two decommissioned gold mine pits as reservoirs.
By transferring water between the two pits, which sit at different heights, the project can deliver up to eight hours of energy storage at 250MW capacity, so with a total of 2000MWh of storage potential, the project is set to become one of Australia’s largest energy storage facilities, and the largest built in Australia for several decade.
Genex said that it is in the process of negotiating the final terms of a financing agreement with the Queensland government for a new transmission line to serve the energy storage project, which Genex expects to finalise shortly.
“We continue to work with the Queensland government to finalise the terms of the co-funding of the transmission line. We look forward to reaching financial close on Australia’s first pumped hydro storage project in the past 30 years in September CY20 and commencing construction shortly thereafter,” Genex CEO James Harding said.
Genex has previously secured access to a $610 million long-term conditional debt facility from the Northern Australian Infrastructure Facility, as well as an off-take agreement with EnergyAustralia for energy storage services provided by the Kidston project. Genex CEO James Harding said that these agreements had been key to progressing the project.
“Our flagship project, the Kidston Pumped Storage Hydro Project has been significantly de-risked through the $610m debt facility agreed with the Northern Australian Infrastructure Facility and the binding Energy Storage Services Agreement with EnergyAustralia,” Harding said.
“Furthermore, the presence of a global hydro leader in J-POWER, delivers technical expertise and demonstrates the world-leading nature of our renewable energy and storage portfolio.”
Japanese energy firm J-POWER has made a $25 million investment in Genex, with the company agreeing to purchase Genex shares, with proceeds from the capital raising to be used towards the development of the Kidston storage project.
The company added that progress towards completion of the 50MW Jemalong solar project has been made without significant disruptions caused by Covid-19, and Genex expects first generation from the project to occur before the end of the year.
In its earnings update, Genex confirmed that it was also looking for further opportunities to expand its portfolio of battery storage projects, with the company recently successfully raising $28.3 million in capital for the development of a 50MW/75MWh Como big battery project in Queensland.
“This is an exciting opportunity for the company as it leverages Genex’s knowledge of the Queensland energy market and expertise in financing large-scale renewable projects,” Harding added.
“Our significant pipeline of renewable energy and storage project, coupled with our operational Kidston Solar Project, places the company as a leader in the Australian renewable energy and storage sector.”
In addition to the solar and energy storage projects currently being progressed, Genex said that it is continuing to undertake wind resource monitoring at the Kidston energy park site, and will progress pre-feasibility work towards a planned 150MW wind farm.