J-POWER EYES PUMPED HYDRO INVESTMENTS IN AUSTRALIA
Japanese utility Electric Power Development Co is in talks to invest in and operate pumped hydro plants in Australia, Inframation understands.
Two sources familiar with the matter said EDPC, which trades as J-Power, is looking to take equity stakes, as well as help build and operate several plants in development in Australia.
These are understood to include Genex Energy’s Kidston 270MW pumped hydro plant in far north Queensland and EnergyAustralia’s 225MW Cultana seawater pumped hydro project in South Australia.
J-Power builds and operates numerous power stations in Japan, including 61 hydro generators and seven pumped hydro plants bigger than 200MW. It also operates seven coal fired power stations.
While government owned, EPDC built and operated the world’s first seawater pumped hydro generator in Okinawa. The 30MW Okinawa Yanbaru power station was a demonstration plant that was commissioned in 1999 and was closed in 2016 as it became unprofitable due to lower than forecast power demand on the island.
J-Power’s existing investments in Australia are confined to small stakes in four coal mines in Queensland and New South Wales to secure supplies for its coal plants in Japan. It also has an “afforestation” tree planting joint venture near Brisbane to offset some of its carbon emissions.
One source close to J-Power said Japan is running out of space to build hydro power plants, but Australia is seen as a big opportunity for power plant developers as the country embarks on extensive programs to install energy storage, including pumped hydro, as it shifts to renewable power and coal plants close.
Australia has just three operating pumped hydro power stations totaling 2.4GW. But an Australian National University study, partly funded by the federal government, has identified about 22,000 sitesaround Australia that would suit pumped hydro facilities.
Genex will formally begin seeking a joint venture partner for its AUD 750m, 250MW solar and 270MW pumped hydro facility located inland from Townsville in Queensland next month. The total cost to build the project will be about AUD 820m including finance and adviser fees. Debt will be used to fund around 80% of the project. Term sheets are understood to have been signed with lenders, which are expected to include CEFC and Societe Generale.
Financial infrastructure investors have been among the investors Genex has targeted, but sources say J-Power is pitching itself as both a joint owner and operator of the plant.
EnergyAustralia has completed a pre-feasibility study for its AUD 500m Cultana project. It is now working on a full feasibility study and won’t make an investment decision until 2019.
EnergyAustralia has been contacted for comment. Genex declined to comment.
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