The Government of Queensland has agreed to provide up to $89.9m (A$132m) in funding for the Genex Power project at Kidston, to encourage renewable energy in North and North-West Queensland.

State-owned transmission network service provider Powerlink will construct the Kidston Pumped Storage Hydro project (K2-Hydro) transmission line from Kidston site to Mount Fox near Ingham, establishing a connection between the hinterland and the National Electricity Market. Powerlink will also own and operate the transmission line.

Genex CEO James Harding said: “Genex is delighted with the Queensland government’s announcement of a significant funding package to enable the construction of the Kidston Pumped Storage Hydro Project Transmission Line.

“Further, the transmission line will now unlock additional stages for the Kidston Clean Energy Hub, including up to 270MW of additional solar and up to 150MW of wind.”

Construction works of the electrical infrastructure project are expected to begin early next year. During the construction phase, the project is expected to create 500 employment opportunities in the region.

Queensland Energy Minister Dr Anthony Lynham said: “The Genex project itself will have a peak construction workforce of about 500 people per annum for the first two years, 250 in the final year and 30 permanent operational jobs.

“And connecting 250MW of pumped hydro capacity will help make the North Queensland electricity network more reliable.”

The government’s investment is part of its Powering North Queensland Plan, which focuses on investing in strategic electricity transmission infrastructure.

At present, North and Far North Queensland hold an operational renewable energy generation capacity of 1700MW.