Kidston will be Australia’s fourth pumped-storage plant, and the first for more than 40 years, as well as one of the world’s first to be co-located with a solar plant. The project is expected to take 3.75 years to build and to be fully commissioned in 2024.
The Sydney-based developer announced on 28 April that it had issued a Notice to Proceed to the EPC contractors, a joint venture of McConnell Dowell Constructors and John Holland Group, as well as to the design and construction contractor, Energy Solutions (which trades as Beon), for the surface connection works. The EPC contract covers the construction of the dam, and underground and waterway civil works, as well the supply and installation of the electro-mechanical equipment. Andritz announced separately on 29 April that it had received an order from the EPC contractors for the design, manufacturing, supply, transportation, erection, and commissioning of two 125 MW reversible pump-turbines, as well as full operation and maintenance services for more than 10 years. The D&C contract covers a new substation at Kidston to connect to the Powerlink transmission line and new 275 kV transmission infrastructure to connect the pumped-storage plant to the substation.
Genex Power had issued a Notice to Proceed to Powerlink for the transmission infrastructure in late March. Genex said it is hoping to achieve financial closure in mid-May. Genex reached finance document contractual close on 15 April after securing A$ 660 million (US$ 508.7 million) in external financing for the facility to be built alongside the existing 50 MW Kidston Solar Farm in northern Queensland. The company had already secured a A$ 610 million (US$ 429.4 million) long-term concessional debt arrangement from the Northern Australia Infrastructure Facility (NAIF), see H&D Issue 4, 2019, and a A$ 47 million project grant from the Australian Renewable Energy Agency (ARENA) and the EPC contractors. The final component of the financing was a $3 million variation deed to the loan note subscription agreement it secured from the Clean Energy Finance Corporation (CEFC). The financing package, in conjunction with Genex’s fully underwritten fundraising of A$ 115 million, means the project is now fully funded.
The K2-Hydro project, which is being developed in a partnership with EnergyAustralia, is the second stage of the Kidston Renewable Energy Hub in northern Queensland. The project will add 250 MW of energy storage capacity across two pits at an abandoned gold mine, with up to eight hours (2 GWh) of actual storage, and will serve as Genex’s flagship project within the clean energy hub, which will also include the operating 50 MW Stage 1 solar PV project, a multi-staged integrated solar project of up to 270 MW, now under development, and the Kidston Stage 3 wind project.
Genex Power has already finalized offtake agreements for K2-Hydro with the signing in March 2020 of an Energy Storage Services Agreement with EnergyAustralia, for a term of up to 30 years. Under the agreement, Genex will provide full operational dispatch rights for the K2-Hydro plant (including profit and loss responsibility) to EnergyAustralia in exchange for a fixed annual rental payment. The arrangement will provide steady revenue for the project, serving as a form of physical hedging for EnergyAustralia against high energy prices, and so the pumped-storage project will not be exposed to the merchant energy market.
It will be just the fourth such project constructed in Australia and the first for several decades. Existing pumped-storage projects operate at the Wivenhoe dam in Queensland, the Tumut 3 power station within the Snowy Hydro scheme, and the Shoalhaven scheme in New South Wales.