Baker McKenzie has successfully acted for Genex Power Limited in relation to signing of an Energy Storage Services Agreement for the AUD 700 million 250MW Kidston Pumped Hydro Project in North Queensland.
Baker McKenzie's lead partner on the deal, Kate Phillips stated: "Under the deal, EnergyAustralia will secure the full output from the 250MW pumped hydro project for a fixed annual payment over 10 years with two options for a further 10 years. Should EnergyAustralia take the agreement to full extension, it will have the right to acquire Genex's holding in the project for a fixed cash payment which has an expected life of at least 80 years."
When asked how significant this agreement and the project is, Kate remarked: "The project is the first pumped hydro storage project in the National Electricity Market in almost 40 years and the first to be developed under private ownership. The execution of the agreement with Energy Australia is a cornerstone for the continued development of the project and a key milestone for the project."
The Project is currently in negotiations for finance by the Northern Australia Infrastructure Fund (NAIF). The project will create over 500 jobs during construction which is expected to begin after forecast financial close in Q3 of 2020. It will deliver significant economic benefits to Queensland through providing reliable generation for the grid and applying downward pressure on wholesale electricity price.
The Kidston Clean Energy Hub, which the pumped hydro project is part of, was granted critical infrastructure status by the Queensland Government.
Kate led a Baker McKenzie team comprising: Paul Curnow, Tanya Denning, Aylin Cunsolo, Leanne Olden, Lev Gantly, Shirley Chen, Harrie Bantick, Mike Webb and Meryl Liew.
The Kidston Pumped Storage Project recognises electricity generation in a pumped storage system and works much like a conventional hydroelectric scheme: in periods of high demand, electricity is generated by releasing water from an upper reservoir through reversible turbine-generators and into a lower reservoir.
However, unlike a conventional hydro scheme, water is not then discharged from the lower reservoir but pumped back to the upper reservoir during off-peak hours using electricity from the grid. This process is similar to the Wivenhoe Pump Storage scheme and Snowy’s Tumut 3 scheme.
The Kidston Project would be a highly efficient form of large-scale energy storage that helps to manage the growth of intermittent forms of renewable energy such as solar and wind.
Intermittent generation can therefore be stored and dispatched to the grid during periods of high demand.