Clean energy generation and electricity storage solutions provider Genex Power has signed a binding energy storage services agreement (ESSA) with EnergyAustralia.

Through this agreement Genex has finalised the offtake deal for its 250MW Kidston Pumped Storage Hydro Project (K2-Hydro).

Genex CEO James Harding said: “Since November 2019, Genex has been actively working with all of its project stakeholders, including EnergyAustralia, NAIF and the Queensland Government, to complete the restructuring of the project financing for K2-Hydro and progress to financial close as quickly as possible.

“We have been extremely pleased with the support of our stakeholders and counterparties during this period and now believe, with today’s signing of the ESSA with EnergyAustralia, that we have the basis to move forward to financial close of the project.”

Under the agreement, Genex will provide operational rights of K2-Hydro plant including P&L responsibility to EnergyAustralia for a fixed annual rental payment.

The 30-year agreement includes an initial term of ten years, with EnergyAustralia having options to extend the agreement twice for a period of ten years each.

After 30 years, EnergyAustralia has the right to purchase Genex’s holding in the project for a cash payment.

Completion of the ESSA agreement is subject to achieving financial close for K2-Hydro.

Genex noted that it is in contact with the other project stakeholders, including the Northern Australia Infrastructure Facility (NAIF) to complete the restructuring of the project financing as per the terms mentioned in ESSA.

Harding added: “The K2-Hydro project will be the first pumped storage hydro project in the National Electricity Market in almost 40 years, and the first to be developed under private ownership.

“It will create over 500 jobs during construction and deliver significant economic benefits to Queensland through providing reliable generation for the grid and applying downward pressure on wholesale electricity prices.”