Kidston Pumped Storage Hydro Project
Kidston Pumped Hydro Project (Investment Decision December 2020)
The Kidston Project is the first pumped hydro energy storage scheme globally to be developed in an abandoned gold mine. The project includes a contribution to the construction cost of the 186km transmission line from the Kidston site to Mt Fox.
The project is NAIF’s largest investment decision to date through a loan of up to $610 million to the project that is forecast to create more than 500 construction jobs and deliver affordable, reliable electricity for north Queensland.
About the Project
Kidston is essentially a giant battery, pumping water uphill when energy is abundant during off peak periods and releasing it to create power in times of peak demand. The project is co-located at an existing 50MW solar farm and a larger solar farm at the same location is planned.
The project will buy and store power from the National Electricity Market when it is cheap and plentiful in off peak periods. It will then sell it back to the market when prices go up in periods of high demand, typically in the morning and evening peak periods. The additional source of peak generation capacity will lead to lower average wholesale power prices which would flow to end users through the competitive retail power market.
The energy storage project can provide dispatchable, reliable and affordable renewable energy to the grid.
Financial close on the project was achieved in May 2021. Construction activities carried out on site so far include the installation of accommodation units at the Oaks Rush accommodation village and at Kidston, upgrade of the access ramp to Eldridge Pit, and installation of a new communication system. Rock material sampling and testing for concrete production has been completed, and pumps are being mobilised to site to commence the initial dewatering of the Eldridge pit.
- 186km 275kv transmission line.
- New substations switchyard and control building.
- Dam construction.
- Powerhouse cavern, two pump/turbines.
- Upgrade of local airstrip.
The Value NAIF Brings
The Kidston project is supported by NAIF’s largest loan approved to date.
NAIF was an early supporter of the project. In 2018 NAIF conditionally approved a loan to the project which helped Genex secure other support for the project, including support from EnergyAustralia through a long-term off-take agreement, and an agreement with J-Power of Japan to invest in Genex, conditional on the Kidston project closing.
Concessions offered by NAIF are required to help overcome disadvantages of the project’s remote location compared to a development closer to major urban centres, including:
- higher construction costs;
- higher costs incurred in accommodating and flying the workforce to and from the project to Townsville;
- the significant cost of the required transmission infrastructure; and
- Maximising opportunities for local Ewamian and other indigenous workers and contractors; and
- Funding a contribution for an Ewamian owned eco-tourist facility
Australian Industry Participation
Australian Industry Participation (AIP) requirements ensure full, fair and reasonable opportunity for Australian industry to compete for work. This includes work in major public and private projects in Australia, and procurements or projects receiving Australian Government funding of $20 million or more.
NAIF projects much comply with the Commonwealth’s AIP policy.
The AIP Plan developed by Genex is available here.
Economic Impact and Public Benefit, including
The project is forecast to contribute $343m in net public benefit to the regional, state and national economy and community including $235m direct value add for Far North Queensland. Benefits include:
- wholesale market energy cost savings estimated at a present value of $500m;
- emission savings;
- reliable, on demand electricity; and
- 510 construction and 30 operational jobs.
The support we have received from the NAIF team in advancing the Kidston project has been instrumental in getting the project to the stage it is today – NAIF’s conditional approval for the project in June 2018 brought confidence in the project’s financeability. This has been vital in building the momentum we have achieved with a range of other project participants and stakeholders.
James Harding, Genex CEO