Genex Power has announced that its subsidiary, K3W Project Co, has entered into a 15-year power purchase agreement (PPA) with Stanwell Corporation for the 258MW Kidston Stage 3 Wind Project (K3W).
K3W is being developed by Genex in a 50:50 partnership with Electric Power Development (J-POWER).
The agreement secures the offtake of 50 per cent of the project’s output of wind energy and large-scale generation certificates at a fixed price, over a 15-year term from commencement of operations. The fixed price is subject to annual escalation in accordance with movements in the consumer price index, subject to an annual cap.
The agreement contains typical conditions precedent for an agreement of this nature, including financial close of K3W by 31 December 2024.
Financing structure for K3W
Genex has said that Stanwell’s involvement as a counterparty under a long-term offtake arrangement reinforces the credibility of the project.
Following the securing of a long-term offtake agreement with EnergyAustralia, the agreement with Stanwell will enable Genex and J-POWER to shortly commence the debt financing process for K3W, targeting a final investment decision in 2024.
The combination of offtake from Stanwell and EnergyAustralia, totalling 80 per cent of the project’s output, will enable a significant debt facility to be secured for the project, which will be utilised to fund construction costs.
Kidston Stage 2 Solar Project update
Following the securing of this agreement with Stanwell, Genex confirms K3W will be the next stage of the Kidston Clean Energy Hub to be developed.
This phase will utilise the remaining available capacity of the new 185km transmission line and associated network infrastructure being constructed by Powerlink Queensland for the 250MW Kidston Pumped Storage Hydro Project.
As a result, Genex will no longer be pursuing the proposed up to 270MW Kidston Stage 2 Solar Project as a priority at Kidston. Genex continues to operate its 50MW Stage 1 Solar Farm at Kidston which was energised on the existing 132kV distribution network in 2017.
Genex CEO, Craig Francis, said that Genex’s offtake agreement with Stanwell marks a major milestone for the 258MW Kidston Stage 3 Wind Project, the third stage of the Kidston Clean Energy Hub.
“When complete, the project will complete the trifecta of wind, solar and pumped storage hydro technologies all co-located at a single site,” Mr Francis said.
“Securing Stanwell as the majority off-taker for the project, a highly reputable entity, underscores the appeal of the generation profile of the project and Genex’s track record in successful delivery of large and complex renewable energy and storage projects.”
Mr Francis said that Genex and J-POWER are delighted to be working alongside Stanwell for the Kidston Stage 3 Wind Project and are appreciative of the strong and continued support of the Queensland Government for the Kidston Clean Energy Hub.
“This agreement secures Kidston’s place in Stanwell’s renewable energy pipeline and contributes to Stanwell’s strategic goal of transforming its portfolio, whilst supporting the objectives of the Queensland Energy and Jobs Plan.
“The agreement with Stanwell provides long-term revenue certainty, which will underpin a substantial project finance facility for construction of the project. Genex and J-POWER will shortly be commencing engagement with lenders as part of this process as we continue to advance the Project toward a final investment decision in 2024.”
