Genex signs new off-take deal for 250-MW K2 hydro storage project

Genex Power Ltd (ASX:GNX) has signed a revised off-take agreement with EnergyAustralia Pty Ltd for its 250-MW K2 pumped storage hydro project in Queensland.

The Sydney-based power generation firm said on Monday it has signed a binding energy storage services agreement (ESSA) with the Aussie utility after it backed out from a previously arranged contract last year.

The two parties have agreed on an initial 10-year term, with two options for an additional 10 years each. EnergyAustralia will operate the plant and receive full dispatch rights while managing all of its costs as part of a fixed annual rental payment arrangement with an escalating tariff.

Following the 30-year term, provided that the extension options have been exercised, EnergyAustralia will have the right to buy Genex's interest in the project for a fixed cash amount.

The new off-take agreement is subject to certain conditions, including the project reaching financial close before December 31, 2020. Genex said it will aim to secure all needed funds for the scheme in the third quarter of the year.

K2-Hydro, which will be the first pumped storage hydro project in the National Electricity Market in almost 40 years, will be combined with a solar farm of up to 270 MW (K2-Solar) that is currently under development. Both projects are part of the Kidston renewable energy hub.

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