Genex Power has reached financial close on its $777 million Kidston Stage 2 pumped hydro energy storage (PHES) project, with construction now set to begin.
The project 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.
Located at the former Kidston Gold Mine at the Kidston Clean Energy Hub in North Queensland, the facility will produce approximately 250MW/2,000MWh of baseload power, equivalent to eight hours of energy storage.
The Australian Renewable Energy Agency (ARENA) will provide $47 million in funding towards the project. ARENA also already provided funding for feasibility and development totalling $9 million for this current pumped hydro stage, as well as initially providing $8.9 million towards Genex’s 50MW Kidston Solar Project in 2016.
The Queensland Government will invest $147 million to connect Genex’s Kidston Pumped Storage Hydro Project (K2-Hydro) to Queensland households and businesses, and the project is set to create 900 construction jobs.
The project is also supported with $610 million in concessional debt finance from the Northern Australia Infrastructure Facility (NAIF).
Genex has now 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 gold mine will be utilised 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, supported by the Queensland Government and Genex, will be required to connect the Kidston Renewable Energy Hub to the NEM.
ARENA CEO, Darren Miller, welcomed the announcement and thanked everyone involved in achieving this significant milestone.
“On behalf of ARENA, I’d like to congratulate Genex on reaching financial close on a project that has been many years in the making,” Mr Miller said.
”The Kidston PHES project will supply dispatchable, renewable energy to the grid when and where it is needed and provide a blueprint for how we store excess solar and wind energy 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 back up power and grid stability as highlighted in the Australian Government’s first Low Emissions Technology Statement.”
ARENA has previously supported 16 PHES projects with over $28 million including the feasibility studies for Snowy 2.0 and Tasmania’s Battery of the Nation.
Queensland Treasurer and Minister for Investment, Cameron Dick, said Genex achieving financial close confirmed the status of Queensland’s nation-leading renewable energy credentials.
“As part of our Economic Recovery Strategy to grow the renewable energy sector and the jobs that come with it, the Palaszczuk Government has played a crucial role in getting the Kidston Pumped Storage Hydro Project over the line,” Mr Dick said.
“This decision will further secure our strong renewables future in North Queensland and will unlock hundreds of renewables jobs.”
Minister for Energy, Renewables and Hydrogen, Mick de Brenni, said the 250MW project will help secure the future of North Queensland’s energy system with a reliable supply of dispatchable power.
“As Queensland charges towards its renewable energy target, storage projects like Kidston will enable the continued investment in otherwise intermittent renewables,” Mr de Brenni said.
“Our $147 million commitment will support publicly-owned Powerlink to build a 186km transmission line from Kidston to Mount Fox near Ingham, creating 400 jobs.
“Construction of the pumped hydro project will create a further 500 jobs, powering North Queensland’s economic recovery.”
The Kidston Clean Energy Hub will integrate large-scale solar and pumped storage hydro using an abandoned gold mine 270km north-west of Townsville.
Water pumped into its reservoir will store approximately 2000MWh worth of dispatchable electricity that can be delivered back to the electricity market when needed.
Genex CEO, James Harding, said the announcement marks an important step in the roll out of large-scale energy storage capability in the NEM.
“Financial close for the Kidston Pumped Storage Hydro Project is a monumental achievement and one Genex has been working towards for over five years,” Mr Harding said.
“Site preparation activities are now well progressed as we prepare for full scale construction activities over the next few months.
“I would sincerely like to thank the Queensland Government for the significant funding support and continued commitment to the Kidston project.”
The Kidston Pumped Storage Hydro Project and its associated transmission infrastructure is expected to be completed and fed into the NEM by early 2025.