In a statement to the ASX on Wednesday, Genex said it would raise $90 million through an offering of shares to institutional investors while Japanese electric utility J-Power will make a $25 million equity investment, further increasing its stake in Genex.
Also on Wednesday, Genex confirmed the Australian Renewable Energy Agency (ARENA) had conditionally approved up to $47 million in funding for the pumped hydroelectric energy storage (PHES) facility in far north Queensland, which will be located alongside the existing 50 MW Kidston Solar Farm.
Genex said the latest funding announcements, in conjunction with previously approved $610 million in concessional debt finance from the Northern Australia Infrastructure Facility, would provide the $777 million in funding required for the construction of the pumped hydro project, and associated transmission infrastructure, to commence.
“Today’s announcement, securing the balance of funding required to take the Kidston Pumped Storage Hydro Project to financial close, is a significant achievement for the company,” Genex CEO James Harding said.
“More importantly, to be in a position to finance the project on a 100% equity basis and retain full ownership and control of the asset is a favourable outcome for Genex and its shareholders.”
ARENA CEO Darren Miller said the project will be the first pumped hydro plant to be built in Australia in almost 40 years, and the first to be used specifically to support the integration of variable renewable energy generation from solar and wind.
Miller said the PHES plant would provide reliable, dispatchable and affordable renewable energy to the grid.
“This is a landmark project for all involved and paves the way for renewables to play a larger role in Australia’s electricity grid,” he said.
“Genex will be delivering the first pumped hydro project in Australia since 1984 and the first to be used solely for energy storage and generation rather than water management.”
Part of Genex’s enewable energy hub, located at what was once Australia’s largest gold mine, the project is a 250 MW / 2,000 MWh PHES, equivalent to eight hours of energy storage.
Two existing mining pits at the former gold mine site will serve as the upper and lower reservoirs for the PHES to minimise construction time and costs. During peak power demand periods, water will be released from the upper to the lower reservoir, passing through reversible turbines. During off-peak periods and when the sun is abundant, water will be pumped back from the lower reservoir to the upper reservoir using electricity imported from the National Electricity Market (NEM).
A 187km transmission line will be required to connect the Kidston Renewable Energy Hub to the NEM. This transmission line is also expected to facilitate the connection of further renewable generation projects in the region.
“Large-scale storage will play a key role in ensuring security and reliability of Australia’s electricity system as we transition to renewables,” Miller said.
“Pumped hydro is expected to be a key technology enabling us to store abundant solar and wind energy when it is available and dispatch this energy back into the grid during the evening and other times of peak demand, so it is imperative these projects get underway.”
Genex said project construction costs are expected to total $583 million while the company will contribute $111 million towards the construction of the transmission line with the Queensland Government to contribute $147 million. Genex said $83 million had been set aside for financing costs and project contingency.
The Sydney-based developer said financial close is expected to occur in mid-May with construction activities to commence ahead of this in late April. Construction is expected to be completed by 2024.
EnergyAustralia is to be the project offtake partner for a period of up to 30 years. A joint venture of John Holland and McDonnell Dowell is the EPC contractor.
“Having championed this project from conception, and having supported pumped hydro feasibility studies across Australia, we are very excited to see this project reach financial close and commence construction,” Miller said.
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