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- Genex Power’s (ASX:GNX) Kidston pumped hydro project in QLD now boasts a completed access tunnel
- The project repurposes two old gold mining pits into a pumped hydro dam
- Kidston sits as a staple of QLD’s decarbonisation strategy
- The project has been hit by cost blowouts and geotechnical concerns
- Shares last traded at 15.8 cents
Genex Power (ASX:GNX) – the company behind Queensland’s Kidston pumped hydropower project – has today confirmed the facility’s main access tunnel is now complete.
The company reported high-quality rock conditions in its announcement the tunnel was complete.
The tunnel in question will provide permanent access to the Kidston power station underground – once it’s built.
Genex expects excavation works to continue further to design the housing cavern to the desired shape.
Troubled recent past
Genex’s Kidston project has not been without its issues.
In late 2022, costs of the project blew out by $10-$15 million when water penetrated into the main access tunnel shaft.
That incident saw a consortium dubbed ‘Skip/Stonepeak’ falter in its previously expressed intention to value Genex at $735 million.
Reputational hit
That consortium, offering to value Genex at $0.73 million, included Atlassian co-founder Scott Farquhar via Skip Capital.
The US firm Stonepeak meanwhile holds US$57 billion dollars under management.
At the time, the consortium’s offer represented a premium of 85 per cent to Genex’s contemporaneous share price of 13.5 cents.
That occurred in August. Shareholders then ran the price up to 24cps, matching the valuation.
But once water issues became apparent, the deal froze. Skip/Stonepeak abandoned the deal.
Shares fell back to 13.5cps, and today they’re not much higher, at 15.8 cents.
Issues in the past
Genex CEO Craig Francis today acknowledged the difficult last 12 months.
“We are extremely pleased with the way in which the Genex and EPC Contractor teams responded to the water ingress event last year, completing the redesign and recommencing production with minimal delay,” he said.
“This has limited the time and cost impacts of the water ingress event on the overall project.”
Mr Francis also described the access tunnel completion as “extremely significant,”
Pumped hydro has critics
Genex’s own founder, Simon Kidston, has previously acknowledged pumped hydro projects take too long to meet urgent net zero goals.
In short, its easier to establish solar farms than it is to wait for up to half a decade, or more, for a hydro project.
Australia’s own CSIRO has previously called for an acceleration of development timelines – to this document is what Kidston nodded.
Eleven-year project
All in all, Genex has been building on its Kidston play for a decade.
The company listed on the ASX once works were well underway as a means to acquire capital funding.
The 250MW/2000MWh project is, on paper, some eight months away from completion.
The stock also produced big batteries and other renewable projects.
GNX shares last traded at 15.8 cents.
