Genex Power has reached financial close on its Kidston Pumped Hydro Storage Project (K2-Hydro) in Far-North Queensland.
The $777 million project (including required transmission infrastructure) will be the first pumped hydro plant to be built in Australia since 1984, and the first to be used specifically to support the integration of variable renewable energy generation from solar and wind.
The facility will produce approximately 250 MW / 2,000 MWh of baseload power, equivalent to eight hours of energy storage.
The project forms a part of Genex Power’s flagship Kidston Clean Energy Hub, which also comprises the operating 50 MW Stage 1 Solar Project.
ARENA will provide $47 million in funding towards K2-Hydro. ARENA has already provided funding for feasibility and development totalling $9 million for the project, as well as initially providing $8.9 million towards Genex’s 50 MW Kidston Solar Project in 2016.
K2-Hydro is also supported with $610 million in concessional debt finance from the Northern Australia Infrastructure Facility (NAIF).
Genex has finalised its capital raising process to allow the project to reach financial close. EnergyAustralia is to be the project offtake partner for up to 30 years. A joint venture of John Holland and McDonnell Dowell is the EPC contractor.
Two existing mining pits at the former Kidston gold mine will be utilised as the upper and lower reservoirs for the project 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 187-kilometre transmission line, supported by the Queensland Government and Genex, 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.
Construction is expected to be completed by 2024. The project is expected to generate 500 construction jobs and a further 20 ongoing operation roles.
CEO of ARENA, Darren Miller, said the project will supply dispatchable, renewable energy to the grid when and where it is needed and provide a blueprint for how excess solar and wind energy is stored at scale.
“Projects like this play a significant role in progressing Australia’s energy transition. Storage solutions such as pumped hydro and large scale batteries are a key part in providing backup power and grid stability as highlighted in the Australian Government’s first Low Emissions Technology Statement.”
Genex CEO, James Harding, said financial close marks an important step in the roll out of large-scale capability in the NEM and one Genex has been working towards for over five years.
“I am pleased to report that site preparation activities at Kidston are now well progressed as we prepare for full scale project construction activities over the next few months.”