Genex Power Limited (ASX:GNX) Executive Director Simon Kidston provides an update on the significant progress at the Kidston renewable energy hub in central QLD.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from Genex Power Limited (ASX:GNX) is Executive Director, Simon Kidston. Hi Simon, welcome back.
Simon Kidston: Thank you very much.
Jessica Amir: For those investors new to the company, can you just remind us what you do at Genex Power?
Simon Kidston: Genex Power is involved in renewable energy generation and energy storage. And we’re developing the one site in Queensland in two stages. The first stage is a 50MW solar farm and that is now operating, the second stage will commence construction next year.
Jessica Amir: A massive congratulations, you’ve just generated first revenues from Stage One. Just tell us about that?
Simon Kidston: It’s a major milestone for the company; we’re now in commercial operations. The solar farm will be in operations for more than 30 years and it’s generating electricity into the Queensland market. And that project is backed by a 20-year Queensland Government revenue guarantee, and that really underpins the company. It provides us with a long-term sustainable cash flow, which I think will see a substantial rerating in our share price.
Jessica Amir: Now to your much larger project, the Pumped Storage Hydro project. Just give us an update on that?
Simon Kidston: Stage Two is really getting some positive momentum, it comprises the Pumped Storage Hydro, but that project’s fully integrated with an expanded solar farm. We’ve appointed the contractors to build the project and we’re now finalising the commercial and contractual contracts, to enable that project to commence construction in 2018. And of course, this project has strong backing from the Queensland Government and the Commonwealth Government.
The Commonwealth Government have invested a substantial amount of money in the form of grants and debt finance. And the Queensland Government have accelerated the permitting and planning process, by designating this project critical infrastructure. So the project is literally shovel ready and we’re on track to commence construction next year.
Jessica Amir: The Commonwealth Government have just announced their energy policy. How does that affect the company?
Simon Kidston: This is a major development. It’s called the National Energy Guarantee and this is a policy designed to promote energy storage. And of course our flagship project, the Pumped Storage project, is really a giant water battery. So our project being shovel ready, being low cost, using mature technology is ideally placed to capitalise on these recent changes in the energy market. And of course, what that really means is that the Government has committed to more renewables. But doing so in a responsible way, a way that recognises the importance of energy reliability.
And the one thing that distinguishes our project from all the other renewable energy generators out there, is that we’ve got a large-scale battery, or giant water battery that enables our solar project to be despatched on command. And this really has captured the interest of the Commonwealth Government and of course, our Queensland Government colleagues.
Jessica Amir: Just before we wrap up, you’ve achieved a lot of milestones. But where would you like to see the company in a year from now?
Simon Kidston: We’ve got a huge amount of milestones coming up. Probably the biggest one we’ll announce we hope to finalise next year, and that will be the identification of our energy offtake partner. This is a group that’s interested in working with us to provide us with a revenue certainty, to underpin our project finance. And we’ve had some very very good engagement with the market to deliver that contract, in the early part of 2018. Once that’s put in place, it’s then just a race to complete the contracts and commence construction in 2018.
Of course, we’ve actually had some very strong share price appreciation this year, but I really think it’s only just the beginning of that process. When we deliver on our milestones, as we’ve done every single step of the way this year, I expect the market will continue to reward us in terms of further share price growth.
Jessica Amir: Very exciting indeed. Simon Kidston, always a pleasure, thanks so much.
Simon Kidston: Thank you very much.