Simon Kidston’s Genex Power to ride hydro boom with new NAIF funded project
Simon Kidston hoped a Queensland gold rush town named after his great, great grandfather was ripe for revival. Today he starts a $800m hydro storage project on the mining site he bought for $1.
A century after a huge gold rush swept the town, Queensland’s Kidston will undergo another renaissance with an audacious $800m hydro storage project rekindling the site of a disused gold mine.
Simon Kidston – a descendant of the former Queensland Premier William Kidston who the town is named after – will see the company he co-founded, Genex Power, start construction on Thursday with a vision to develop the former ghost town into a major clean energy hub combining solar, hydro and wind generation.
Genex – backed by tech billionaires Mike Cannon Brookes and Scott Farquhar – aim to start up the 250 megawatt project in 2025, marking the nation’s first pumped storage hydro project in 40 years.
The facility, west of Townsville, has signed up power giant EnergyAustralia to a 10-year deal to buy power from the facility with two further decade-long options available, including control of the plant’s operational and dispatch rights.
The ASX-listed Genex bought the old gold mine from mining major Barrick in 2014 for $1 after the facility had been shut down in 2001.
It had been scanning different pumped hydro sites in Queensland, but Mr Kidston said returning to a town with strong family heritage made it an ideal choice.
“We had this idea of what if there’s a mine site that is presumably heavily disturbed from an environmental perspective which we could repurpose to a hydro reservoir,” said Mr Kidston. “We started looking for suitable sites and I knew about Kidston as my family were small shareholders in Kidston Goldfields. The site was connected to the power grid, had a transmission line and legacy infrastructure and was the perfect fit.”
With heavy backing via a $610m loan from the Morrison government’s Northern Australian Infrastructure Facility, the project appears to have cleared all major hurdles and aims to deliver firmed power to back up the state’s rampant growth in renewables.
“Firm energy is absolutely key. Queensland is saturated now with solar energy and that‘s causing all sorts of issues with negative pricing and volatility when slabs of solar are in and out of the market. This will help deliver energy that can be relied on.”
The pumped hydro plan represents the second major energy project for Mr Kidston and long-time business partner Michael Addison, a director of Genex. Both were former bankers who weighed into coal on the eve of the global financial crisis, betting prices would be elevated relative to historical norms because of the fundamental strength of Asian economies.
Their first success story — Endocoal — began in 2008 when they secured tenements in Queensland and built up the business before selling to Chinese-backed U&D Mining Industry for $71m in 2012.
The duo reinvested some of their fortune from Endocoal in a Queensland metallurgical coal play in the Bowen Basin called Carabella Resources, also snapped up by the Chinese for $70m.
Mr Kidston is proud of their coal track record but said they could see the writing on the wall for the under pressure fossil fuel.
“We were thinking about what to do next after Carabella and we just felt that coal wasn’t for us. We’d done our dash there, so we decided to look at renewable energy which was emerging in Australia,” Mr Kidston said.
“We were conscious there was a lot of renewable investment going on in Europe and we thought that over time that would come to Australia. At the time Mr Abbott was the Prime Minister — but we thought notwithstanding some of the views politically, that idea would take on here.”
Nearly a quarter of Australia’s power now comes from renewable energy. The Kidston site already has a 50MW solar project operating with a larger 270MW solar farm in feasibility stages and a 150MW wind facility also in development. A 50MW battery is also proposed at Bouldercombe, near Rockhampton.
Genex said having back-up power to deliver “firmed” renewables is central to the company’s strategy.
“If renewables were coming we were conscious that one big deficiency was they’re intermittent so they can’t be relied on, but there ultimately needs to be a way to store energy. We approached renewables in a different way — everyone was thinking about wind and solar farms — and we thought storage will be the real driver into the future.”
The Kidston pumped hydro facility will employ 800 people during the construction phase and is just the fourth project of its kind to be built in Australia.
“The project has certainly had its challenges. Even though pumped hydro is a mature technology, there hasn’t been a plant built in Australia in 40 years. Kicking off construction is a major milestone. Bringing life and jobs back to this town of Kidston feels pretty special too.”
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