Plans to turn a disused north Queensland gold mine into Australia’s biggest renewables-based energy storage project are nearing financial close, after securing debt and grant funding towards construction of the solar array for the ground-breaking project.
ASX-listed company Genex Power said on Friday that work on first stage of its solar and pumped hydro power project was expected to start soon, after the company received credit approval from its debt syndicate for a debt facility of up to $110 million.
The company said it had also achieved execution of its Australian Renewable Energy Agency (ARENA) grant funding agreement of $8.85 million, secured in the recent large-scale solar competitive tender.
The financial milestones come less than a month after the Kidston project – which will be unique in the world – was found to be technically feasible, with the favoured design capable of delivering 250MW of generation capacity, with six hours of continuous generation, and 1,500MWh of total storage capacity.
Essentially, the project will convert the former gold mine into a giant battery by exploiting the vertical drop of an old open pit gold mine. This will store the power from a potentially 200MW – but initially 50MW – solar array.
The idea is to pump water into an upper storage reservoir through the day or overnight when energy prices are low, and then release it into a lower reservoir to generate power during periods of high demand or need, offering the same kind of grid support services as a gas or coal-fired power plant.
And as ARENA CEO Ivor Frischknecht has pointed out, “it comes at a time when cost effective storage options are becoming increasingly important as more large-scale renewable energy generation enters the national electricity market.”
Genex managing director Michael Addison said on Friday that the commencement of site works marked another significant milestone for the project.
“(Kinston) benefits from one of the best solar resources in Australia and we will target first generation and revenue from the project in Q4 2017,” he said.
ARENA, meanwhile, is chalking up Kidston’s progress as a win for the Agency’s efforts to drive down costs – and accelerate deployment – in Australia’s large-scale solar sector.
“This opens up the potential to create Australia’s first big solar plant capable of delivering renewable energy into the grid around the clock,” Frischknecht said on Friday.
“The runs on the board for large-scale solar demonstrate the ARENA effect in transitioning Australia to a reliable and affordable renewable energy future.
“One example is falling local costs, which represent a large portion of overall costs. ARENA support and knowledge sharing activities have slashed the locally determined costs of developing and building plants by more than half in the last three years.”
Frischknecht noted that ARENA’s investment in large-scale solar is expected to unlock almost $1 billion in commercial investment that will mostly be spent in regional Australian economies.
“Nationally, the six plants in Queensland, five in New South Wales and one in Western Australia will be a huge boost to regional areas with the expected creation of around 2,300 direct jobs and thousands more indirect jobs,” he said.
Another 11 large-scale solar projects are currently working towards signing ARENA agreements, locking in finance and lining up construction contracts in order to reach financial close early next year, Frischknecht said.