Genex Power has reached a new major milestone that can get construction going on the 250MW Kidston Pumped Storage Hydro Project (K2-Hydro) later this year.
A binding energy storage services agreement (ESSA) has been signed with EnergyAustralia and this agreement will get EnergyAustralia to operate K2-Hydro for an initial 10-year period with two 10-year extension options.
Under this agreement, EnergyAustralia will also have full dispatch rights as well as meet its operating costs.
From November 2019, Genex Power has been working closely with all its project stakeholders – including Energy Australia, Northern Australia Infrastructure Facility (NAIF) and the State Government – in finalising the restructuring of the project’s financing as well as progressing the project towards financial close.
“We have been extremely pleased with the support of our stakeholders and counterparties during this period and now believe, with today’s signing of the ESSA with EnergyAustralia, that we have the basis to move forward to financial close of the project.
“The K2-Hydro project will be the first pumped storage hydro project in the National Electricity Market in almost 40 years, and the first to be developed under private ownership. It will create over 500 jobs during construction and deliver significant economic benefits to Queensland through providing reliable generation for the grid and applying downward pressure on wholesale electricity prices. We look forward to keeping the market informed as we progress toward financial close, and to commencing construction at Kidston later this year,” Genex Power CEO James Harding said.
Though financial close and the beginning of construction is anticipated in the third quarter of this year, the timing might be adjusted accordingly depending on the impact of the COVID-19 pandemic.
K2-Hydro is going to be built on an old gold mine in Far North Queensland - approximately 270 kilometres north west of Townsville - making it the first of its kind in the world. This project is part of the Kidston Hydro-Solar Project Stage 2 (K2) which also includes a 270MW solar farm.
Early last year, Genex Power appointed the McConnell Dowell – John Holland joint venture to undertake early works on the project. You can read more about it here.
In addition, a $610 million funding was secured by Genex Power in July 2019 from NAIF, which you can read up more information here.
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