July 11 (Reuters) – The Australian government said on Thursday it would provide up to A$610 million ($425 million) in cheap financing for Genex Power Ltd to build a pumped hydro project to help stabilise the country’s electricity grid.
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Pumped hydro energy storage is the one renewable energy technology strongly supported by Australia’s conservative government, which has come under fire for backing coal and failing to craft a broad energy policy to shore up the country’s shaky grid, cut emissions and lower prices.
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Pumped hydro acts like a giant battery, pumping water uphill when energy is abundant and releasing it to create power at night or on a windless day.
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“Energy storage facilities have a significant role to play in Australia’s transition to a low emissions, low cost energy future,” said Laurie Walker, chief executive of the Northern Australia Infrastructure Facility, the A$5 billion government fund which will provide the loan.
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Genex’s 250 megawatt Kidston pumped hydro project is widely seen as a template for projects that could be developed all over Australia at old dams and mine sites
“We have been gaining momentum with this project over the last few months and are confident that … Genex will be in a position to reach financial close before 30 September this year,” Genex Chief Executive Officer James Harding said in a statement
It had hoped to secure financing by June
The company is still working to seal a final agreement with the country’s third largest energy retailer, EnergyAustralia, a unit of Hong Kong’s CLP Holdings, to buy power from the project and take an equity stake in it
EnergyAustralia was not immediately available for comment
$1 = 1.4358 Australian dollars Reporting by Nikhil Subba in Bengaluru and Sonali Paul in Melbourne; editing by Richard Pullin