Solar farm revenue slumps as market cools in aftermath of coal and gas crisis

The two solar farms owned by Australia’s last remaining listed renewable energy specialist continue to generate strong revenues, even though prices have halved since the giddy heights of last year and the midst of the fossil-fuel inspired market crisis.

Genex Power, which is also building the country’s first new pumped hydro project in decades, as well as a new big battery, operates two 50MW solar farms – Kidston in Queensland, next to the pumped hydro facility, and Jemalong in NSW.

In the December quarter, Genex says revenues at Jemalong (including large scale generation certificates) averaged $112/MWh, down from an average price of $180/MWh in the September quarter and $214/MWh in the June quarter.

Kidston received an average price of $90/MWh (not including LGCs which are surrendered to the state government under an underwriting deal), compared to 129/MWh in the September quarter and $184/MWh in the June quarter.

The data from Jemalong and Kidston is interesting because they are both “merchant” projects, meaning their prices are driven by the wholesale market, and – because Genex remains a listed entity – they are one of the few to disclose their results.

The two solar farms delivered revenue for Genex of $13.4 million in the December half, up from $11.1 million in the year earlier period, providing much needed cash flow as it works on a suite of much larger projects.

Genex ran into problems at the Kidston pumped hydro construction site last year when geological problems caused water ingress. But it says these issues have been sold, and the project remains on schedule to be completed in late 2024, although it is running $10-$15 million over its financial close budget.

The problems at the 250MW, eight hour Kidston storage site emerged at the same time as Atlassian co-founder Scott Farquhar and his wife teamed up with a US investment fund to launch a bid for the company. That offer was withdrawn in late December, but Farquhar’s Skip Capital remains a major shareholder.

Genex is also building the 50MW/100MWh Bouldercombe big battery in Queensland, with foundations now being laid (see picture above), Tesla Megapack batteries due for delivery in the next two months and the project due for completion by the end of June.