Today the Honorable Angus Taylor (I think I just threw up in my mouth) has a comment in the AFR. Interestingly, he does discuss the value of pumped hydro to stabilise the grid, along with the focus on gas and batteries. Of course they are pumping up their own book - the investment in the the Snowy Battery 2.0 etc. But the argument carries weight into Kidston too. There is an interesting podcast from ARENA that specifically talks about the role of pumped hydro (if I recall they mentioned basically 6000 potential sites, and only need around 20 for the whole grid if they also put in place the interconnectors). The head of GE "hydro" (not sure of their technical name) was recently in Australia discussing this, and trying to sell their wares. So definitely potential for more, and great to see the *current* policy framework is supportive of this tech.
With regards to interest on the Kidston assets, I'd be surprised if there aren't people kicking the tires. It's really hard for domestic utilities, generators and retailers to acquire I reckon, so I'd be thinking it's more likely to be an infrastructure fund manager or super. Though the internationals are willing to pay more. You have the likes of Brookfield buying up as much as they can (very low cost of capital for them). And you have the European retailers (Iberdrola, Enel) looking to expand out of their market because they are being squeezed - just look at what happened in Spain with their "windfall tax" on renewable energies this past week, Enel fell 10-15% because Government said they weren't going to let them keep the extra revenue from high spot energy prices. The challenge for any suitor though is EnergyAustralia can buy Kidston in 30yrs for $250m. As an investor, I don't worry about that because they need to pay $50m + CPI every year before that point, but as someone who may buy the underlying asset they may think that's a nuisance and could be expensive to break. So let's see.
GNX Price at posting:
24.0¢ Sentiment: Buy Disclosure: Held
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