I thought I would add some additional commentary and data on why I think the completion of Jemalong Solar Farm is a huge win for Genex, and why I think the SP movement doesn't reflect the significance of this milestone.
Jemalong and Kidston are the same size and technology, though obviously in different states, Qld and NSW respectively. The location of KSP is excellent for renewable resources, with high capacity factors being recorded throughout the year. Jemalong's location however is however much further south, and in a more temperate climate more prone to cloud cover. From a resource perspective, KSP is the winner here. However, from a spot revenue perspective, JSF is by far the more fruitful asset.
The following chart shows a comparison of monthly spot revenues comparing KSP, and JSF (if it were already operational). I have used actual generation using the nearby Parkes Solar Farm (and its 0.9259 MLF) as a proxy to complete this calculation. In a year plagued by low demand, low coal and gas prices, and therefore low spot prices, gross annual revenue from KSP and JSF are estimated to be
$7.83 and
$17.03 million respectively. JSF revenues in 2020 would have been a whopping 117% higher than KSF - this is what I meant in a previous post that Simon is severely underestimating the step change in revenues from JSF.
*December dataset to 17/12/2020
You will notice that January revenues in NSW are somewhat of an outlier. This is a result of the bushfires in early January knocking out some infrastructure in the Snowy Mountains, essentially cutting off Snowy Hydro from transferring electricity to Sydney and causing extreme spot prices.
Though this can be considered a 'once-off' event, NSW is generally a more volatile market than Qld, and tends to have more extreme spot price events (driven by a lower reserve capacity margin) that we can profit from as a merchant only solar farm.
Looking forward, Qld is expected to have low midday spot prices until either a coal power station comes offline, or our pumped hydro gets built (or a combination of the two). NSW on the other hand is retiring Liddell Power Station in a couple of years, still has very strong daytime demand, and is strongly linked with the other NEM regions (plus the EnergyConnect interconnector with SA in a few years time) - spot prices are very unlikely to go into the negative territory any time soon.
TLDR: Jemalong Solar Farm is a significant step change in the potential revenues for Genex since MLFs and spot prices are far better than for Kidston SP.
Regardless of whether KPH gets over the line this side of NYE, the current sub-$100 million share price seems overly bearish to me and is ripe for a re-rate once the panic sellers disperse.
