Off-take deal breakthrough for FNQ power project
EnergyAustralia has agreed to an Energy Storage Services Agreement for up to 30 years for full dispatch rights from the planned 250MW plant.
Genex expects to begin construction in the third quarter of this year, creating about 500 jobs over a build time of more than three years.
“It’s now just a matter of dotting the i’s and crossing the t’s with financing,” executive director Simon Kidston said.
The Kidston Stage 2 Pumped Storage Hydro Project (K2-Hydro), is part of a proposed $1 billion renewable energy hub based at the former Kidston gold mine south-west of Cairns.
The capital cost to Genex will be about $700 million, including $100 million towards transmission infrastructure.
The State Government is contributing a further $132 million towards the transmission line to link the Kidston renewables hub to the electricity grid.
News that Genex has finalised the ESSA comes after EnergyAustralia dashed the company’s hopes of reaching financial close on the project late last year when it failed then to commit to a long-term energy agreement.
The project has attracted a $610 million loan offer from the Northern Australia Infrastructure Facility (NAIF).
Genex says its remains ‘deeply engaged’ with other stakeholders including the NAIF to complete project finance restructuring on the basis of the terms of the new agreement with Energy Australia.
“We have been extremely pleased with the support of our stakeholder 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,” Genex chief executive officer James Harding said.
“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.”
A McConnell Dowell/John Holland joint venture will lead the construction project.
Other elements of the energy hub include the operating 50MW Stage 1 Solar Project (KS1), a multi-staged integrated solar project of up to 270MW (K2-Solar), and the Kidston Stage 3 wind project of up to 150MW.
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