Kidston hydro electricity project hits troubled waters
Plunging share prices and a failure to secure a deal with its chief buyer has cast doubt on a $700 million hydro-electricity project expected to create hundreds of jobs in North Queensland — but all hope has not been dashed.
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PLUNGING share prices and a failure to secure a deal with its chief buyer has cast doubt on a $700 million hydro-electricity project expected to create hundreds of jobs in North Queensland – but all hope has not been dashed.
Genex shares went into a trading halt at the start of the month as the power generation development company announced EnergyAustralia had stalled on signing a contract to buy power from the pumped storage hydro project at Kidston, which is about seven hours’ drive southwest from Cairns.
The failure to reach financial close on the project has cast doubt on a $610 million Northern Australia Infrastructure Facility loan to Genex, which is due to expire at the end of the year.
It could also jeopardise the State Government’s $132 million commitment to build transmission lines connecting the Kidston power plant to the grid.
Advance Cairns CEO Nick Trompf said the story was not done yet and he hoped a positive resolution could eventually be found.
“It’s important to note that Genex immediately signalled it would continue to work with EnergyAustralia and its other financial investors,” he said.
“No doubt they are working furiously to finetune this.
“This is a significant project – indeed, Genex has described it as the most significant project for the organisation.
“At $700 million, it will be something they are very keen to stay alive.”
The Northern Australia Infrastructure Facility has stated it would “continue to engage with the proponents to support this important piece of energy infrastructure”.
Mr Trompf said both Cairns and Townsville stood to benefit from the project.
“It’s a big project and expected to create hundreds of jobs,” he said.
“Hopefully they are able to finalise it in 2020.
“The original plan had them generating power from 2022.
“Obviously that’s going to slip back a bit now.”
Genex’s share price has tumbled by a third since the announcement.
The project is a key component in the Queensland Government’s push to achieve a 50 per cent renewable energy target by 2050.
THE PROJECT
■ The Kidston project is about 404km southwest of Cairns
■ The project is at an old mine site
■ The dams where the water is for the hydro facility were open cut mines
Originally published as Kidston hydro electricity project hits troubled waters