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Debt finance deal will ‘maximise returns’ for Genex’s Tesla battery project in Queensland, Australia

2022-02-24

news-Debt finance deal will ‘maximise returns’ for Genex’s Tesla battery project in Queensland, Aust

40 Tesla Megapack units will be used at the Bouldercombe site. Image: Tesla.


Genex Power has received credit approvals on a AU$35 million (US$25.26 million) debt finance facility for its 50MW/100MWh Bouldercombe battery energy storage system (BESS) project in Queensland, Australia. 


The renewables and energy storage developer said in an announcement to the Australian Securities Exchange (ASX) that it has agreed the financing deal with Infradebt, a specialist project finance fund management and financing company focusing on the energy transition space. 


The debt finance will allow Genex to “retain upside exposure to the attractive economics of energy storage and maximise the economic returns of the project,” the company’s CEO James Harding said. 

Genex said it will now negotiate final terms with Infradebt and take the project to its financial close. 


Bouldercombe Battery Project (BBP) will be one of Queensland’s first large-scale standalone BESS facilities. Scheduled to come online in the second half of 2023, the 12-year term of the Infradebt loan kicks in once commercial operations commence. 


Genex selected technology provider Tesla to supply the full integrated battery storage solution to BBP, in the form of 40 of the US-headquartered company’s Megapack BESS units which have also been used at Australia’s biggest battery project to date, the 300MW/450MWh Victorian Big Battery, which power producer Neoen recently brought online in the state of Victoria. 


Tesla’s Autobidder machine learning algorithm-based bidding system will also operate the BESS’ dispatch and trading activities. Genex and Tesla signed an eight-year off-take deal for that, which after the deal expires is expected to be renegotiated as a licensing deal. 


In addition to the AU$35 million debt finance, Infradebt has signed a Cooperation Agreement with Genex to continue working on financing other merchant BESS projects in Australia. The financial leverage that agreement will enable means Genex will retain upside from battery storage market economics, the company said.  


Genex is also currently building Australia’s first new pumped hydro energy storage (PHES) project in nearly 40 years, the 250MW/2,000MWh Kidston Stage 2 Pumped Hydro Project, also in Queensland. 


On Friday, Energy-Storage.news reported that Australian energy retailer Origin Energy plans to exit coal earlier than originally planned, given the competition the fossil fuel faces from renewables and energy storage.


Origin said it wanted to bring forward the retirement date of its 2,880MW Eraring coal power station from 2032 to 2025 and build a 700MW BESS at the site. The evolution of the National Electricity Market (NEM) is making it harder for baseload coal to keep up, with fast-responding batteries in particular able to capitalise on changing market structures.    


According to quarterly data from the Australian Energy Market Operator (AEMO), market revenues battery storage systems earn for frequency control ancillary services (FCAS) is rising, batteries are suppressing negative pricing events and the introduction of five-minute settlement (5MS) to replace 30-minute settlement in the NEM are among factors creating that upside Genex referred to. 


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