Out-Law News 1 min. read
26 Mar 2021, 1:31 am
Australian Renewable Energy Agency (ARENA) will give a grant of AU$47 million ($35.8m) to power generation company Genex to fund a pumped hydro facility.
The project is a 250 megawatts (MW)/2,000MWh pumped heat electrical storage (PHES) with eight hours of storage capacity at the Kidston Clean Energy Hub in north Queensland.
According to ASX-listed Genex’s statement on Wednesday, it will raise AU$90m ($68.4m) via a share offering to institutional investors, and its major shareholder Japanese electric company J-Power will make a AU$25m ($19m) equity investment. The rest of the AU$777m ($591.4m) cost of the project will be meet by a AU$610m ($464.3m) loan from the Northern Australian Infrastructure Facility.
It will be the first pumped hydro plant to be built in Australia since 1984, and the first to be used specifically to support renewable energy generation, according to ARENA.
Energy expert George Varma of Pinsent Masons, the law firm behind Out-Law, said: “Pumped hydro is growing in popularity as an energy storage medium in Australia. It is great to see ARENA support this project, which will no doubt assist with grid stabilisation and flattening the ‘duck curve’. Energy storage projects need to be prioritised to allow greater levels of renewable energy generation and connection into the grid, which will assist with reducing Australia’s currently high electricity price.”
A 187-kilometre transmission line is required to connect the Kidston Renewable Energy Hub to the National Electricity Market (NEM), it said. The construction is expected to be completed in 2024. Energy Australia is to be the project offtake partner for 30 years.
