Genex Power Limited (ASX: GNX) (Genex or Company) is pleased to provide shareholders with an update in relation to the development of the Company’s Kidston Stage 2 (K2) projects, comprising the Pumped Storage Hydro (K2-Hydro) project and the Stage 2 Solar (K2-Solar) project, at the Kidston Renewable Energy Hub in North Queensland.
K2-Solar Development Approval
Genex is pleased to advise that it has received Development Approval (DA) from the Etheridge Shire Council in respect of the K2-Solar project. The DA is for a maximum of 270MW but Genex has the potential to build K2-Solar in stages to match energy offtake and energy transfer capabilities. This represents a significant milestone for the K2 projects. As with KS1, K2-Solar will benefit from being located within the highest solar radiation zone in Australia.
Early Contractor Involvement (ECI) process
Genex continues to advance the ECI process toward agreeing full fixed price Engineering, Procurement and Construction (EPC) wrap contracts with UGL for K2-Solar and with McConnell Dowell/John Holland Joint Venture (JV) for K2-Hydro. EPC contracts are expected to be finalised by the end of June.
As part of the ECI process for K2-Hydro, the JV has selected ANDRITZ, an international tier-one supplier and global leader in hydraulic power generation, as the preferred electromechanical equipment supplier (including the reversible Francis pump-turbines). The JV, together with ASX Announcement 3 April 2018 ANDRITZ, has continued to optimise the design for K2-Hydro as the EPC contracts are finalised, with a selection of 3D images of the optimised design detailed in figure 1.
Genex recently provided a submission in response to the draft design consultation paper published by the Energy Security Board (ESB) relating to the proposed National Energy Guarantee (NEG). Genex is supportive of the NEG, which it believes should deliver on Australia’s emissions reduction targets while maintaining the security of the National Electricity Market through promoting investment in low emissions and dispatchable capacity. Importantly, Genex believes that the Reliability Guarantee being considered by the ESB should embrace dispatchability, availability, ASX Announcement 3 April 2018 synchronous capabilities and the ability to ramp up & down (responsiveness). Genex looks forward to contributing further on the consultation process. A copy of the Company’s submission can be found on the Company’ website.
Commenting on the announcement, Managing Director of Genex Power, Michael Addison stated:
“After several months of detailed market engagement, we are now in negotiations in regards to securing debt funding for our Kidston Stage 2 projects with a select group of partners. Genex’s main focus remains on progressing the Kidston Stage 2 projects to financial close in calendar year 2018. Concurrently, Genex continues to consider further renewable opportunities to broaden its project pipeline, as the Company evolves into a broader renewable energy generation and storage developer.”
The Federal Government, through the Australian Renewable Energy Agency (ARENA), has provided $8.9 million in funding to support the construction of Genex’s KS1 Project, and up to $9 million in funding to support the development of K2-Solar and K2-Hydro.
Queensland State Government
The Queensland State Government has continued to support the development of the Kidston Renewable Energy
Hub, providing a 20-year revenue support deed for KS1 through the Solar 150 Program, and designating the
Hub as ‘Critical Infrastructure’ to the State.