The hydro revolution continues to take place in Australia, as Genex Power has confirmed that it is partnering with Energy Australia to deliver a hydro storage solution to power up to 260,000 households.
Upon the news, Genex shares shot up immediately, receiving an instant 12.5% upon the announcement of it building a hydro storage power plant in North Queensland. This shows just how much backing there is for hydro power.
In a week where coal power has been struggling to find financial backing and insurance, as with the Carmichael mine, the fact that the market has backed Genex so well indicates that there may well be a more general shift on the way.
This is good news for those in hydro power development, and there is plenty of scope to grow this sector given Australia’s natural surroundings, which already make the nation ideal for boosting solar and wind power.
Hydro is a renewable source that should be a big part of the energy mix in the future, so gains such as these are likely to encourage other players on the scene to start pushing for their own hydro power solutions.
Work on the Genex project will begin early next year, and it will deliver 250 megawatts of energy, which is enough to keep more than a quarter of a million homes fully powered.
The deal with Energy Australia is key. Australia’s federal government has said that it is happy to support renewable energy projects, and Genex received $516m to deliver solar, wind and hydro energy generation, but the funding was conditional on the company finding an energy retailer to input the resources into the grid.
The public to private transition of these energy sources will encourage investors looking for ways to fund climate-friendly options if they know that the government is happy to provide stability on the issue.
Changing political decisions have long been a problem for investment vehicles that simply want a less volatile market before putting their capital in, and the energy sector is known for having plenty of ups and downs over the years. Despite the government failing to get any consensus on an overall energy deal, the fact that it has been able to get private companies to come on board is indicative of the general direction that it wants to head in.
There have been plenty of green finance initiative backings in the last few years, and now it seems that if energy generators are able to persuade retailers to back their projects, then they will also be able to get federal funding to move forward.
Simon Kidston, Executive Director at Genex, believes that it was easy for Energy Australia to partner with his company because it offers a strongly diversified energy mix comprised of solar, wind and hydro. This means that unlike power companies that rely on one resource, if there are any issues or changes to legislation, then Genex’s power supply can remain unchanged in its output.
Kidston confirmed that ‘this hydro asset can be turned on and off quickly to match any gaps in supply,’ assuaging any fears that there could be problems with power delivery due to intermittent wind patterns, especially when solar is not generating in the evening.