Genex Power Limited (ASX:GNX) Executive Director, Simon Kidston talks about its major renewable energy projects, government support and outlook
Genex Power Limited (ASX:GNX) is developing a renewable energy hub in north Queensland. We’re going really well, we’ve got Stage One under construction today, that’s 50 megawatts of solar. And we’re now busy planning the funding of Stage Two, which is a further 270 megawatts of solar and 250 megawatts of pump storage hydro.
So the Kidston Solar Project Phase One is 50 megawatts, that’s under construction today. And we anticipate that project to deliver first cash flows, by November of this year, with full practical completion early next year. That’s a long-life project, which is underpinned by 20-year revenue support arrangement with the Queensland Government.
Our Stage Two project is a further 270 megawatts of solar integrated with a giant water battery. So we can store power and despatch that power, as and when it’s required.
So the Pump Storage Hydro project is our flagship project. That’s a giant water battery and it’s considered really strategic, because the focus now in the electricity market, is about energy storage. And pump storage hydro is a low cost way to store power. And we can despatch that power as and when it’s required. And we’ve got enormous support from the Government, to develop this project and we’re working with them now on that.
We’ve got a strong financial outlook for Genex Power. Stage One solar farm will generate free cash flow in the order of $15 million. And the vast majority of that cash flow is backed by long-term Government contract. We expect that revenue will commence late this year (2017), with long-term cash flow thereafter.
So Stage Two project is a big project, we’re working with Government agencies to fund that project at the moment. And we’re very encouraged by the support we’ve received from the market.
So we’ve got to deliver our Stage One project, that’s going very well, but we really want to deliver Stage Two Pump Storage Hydro project. And the reason for that is that’s going to deliver much needed energy storage, into the Queensland grid. And we’re very keen to kick that construction program off next year (2018).
So unlike other renewable companies who just generate power, we can generate renewable power and we can store that power. So the thing about wind and solar generation, that’s fine when the wind blows and the sun shines, but that doesn’t always correlate for when energy’s required. So we can store that power through our Pump Storage Hydro giant water battery, and despatch that power when it’s required. We are the only project in the country, with an advanced project that can deliver that, at low cost.