Originally published by Perry Williams of The Australian.
04.05.2026
The capacity of Australia’s largest planned solar farm has been cut due to tough market conditions, while the country’s first new pumped hydro scheme in 40 years faces delays in a fresh setback for the Albanese government’s goal of fast-tracking renewable energy supplies.
Genex Power, owned by Japanese energy giant J-Power, planned to develop a 775 megawatt solar farm and 400MW battery at Bulli Creek in southern Queensland as part of an eventual 2 gigawatt scheme spanning large-scale solar and batteries.
The company’s board had been due to make a final investment decision before the end of 2025, but Genex chief executive Craig Francis said a call was made to dial back on the enormous scale of the project to focus on smaller capacity given tough market conditions.
The prolonged use of coal in Australia’s power grid, higher costs to build renewable projects, and a federal subsidy-triggered boom in household batteries all played a part in the decision.
“There was a real deterioration at the end of last year. We reached the conclusion that the current configuration that was being proposed was a bit too big a leap,” Mr Francis told The Australian.
Genex had planned to install 1.5 million solar modules across 204,000 steel foundation piles in a renewable installation that was touted as the biggest solar facility in the southern hemisphere.
However, the pullback underlines the challenge of delivering major green energy supplies amid a backdrop of rising construction costs, higher financing charges and uncertain electricity prices. It adds to concern Labor will undershoot delivering on its 82 per cent renewables target by 2030.
“We’ve been working this year to reconfigure the project to be a solar and battery hybrid and smaller first stage and then building it out in smaller chunks. Our stakeholders remain committed to working with us to get the new configuration to a final investment decision,” Mr Francis said.
Genex’s Kidston project in Far North Queensland, the first new pumped hydro development in four decades, has also suffered a setback with capacity of 250MW now not due online until late July 2027, according to consultancy WattClarity.
That marks a years-long delay from the original schedule.
Genex in March said the project would be completed by mid-2027, while conceding some timeline uncertainty over the exact length of the commissioning process.
The location, 380km northwest of Townsville, and complex engineering and tunnelling conditions, have partly hampered the speed of construction and commissioning to bring the project online, with EnergyAustralia holding a 30 year-deal to purchase power from the facility.
A combined wind farm and battery system at Kidston is also under review given cost inflation which has dampened enthusiasm among some developers to sign off on new wind resources.
“It’s still evolving what the configuration is there,” Mr Francis said. “Capital costs for wind projects are significant and only going in one direction.”
The Queensland-government owned Stanwell signed a 15-year deal with Genex in September 2024 for 550MW of capacity from the Bulli Creek solar farm. Stanwell touted a target of 9 to 10GW of renewable energy generation by 2035 and it is unclear how a reduction of the Bulli contract would be managed by the company. Stanwell was contacted for comment.
Andrew Forrest’s Fortescue was the first company to sign a deal for Bulli in October 2023 but the offtake arrangement was subsequently scrapped after the iron ore major’s Gisbon Island green hydrogen plant in Queensland was binned. Hydrogen produced at Gibson Island was to have been used to produce ammonia at Incitec’s mothballed fertiliser plant nearby.
Atlassian co-founder Scott Farquhar and his wife Kim Jackson’s investment fund Skip Capital attempted to buy Genex in 2022 but its bid was rejected for being too low. J-Power eventually won control of Genex in July 2024.
Average prices across the National Electricity Market fell to $73 per megawatt hour across the March quarter according to the energy regulator, down 12 per cent from a year earlier, as batteries determined around 32 per cent of ‘dispatch intervals’. It is the first time storage has led the market.
The Australian last week revealed a major cost blowout at the federal government owned Snowy 2.0, with costs soaring and major delays plaguing the original vision laid out by former prime minister Malcolm Turnbull.
Cost slugs that have hit Snowy include productivity underperformance, delays from tunnel boring machine stoppages, the need for a fourth tunnel boring machine to navigate a section of difficult terrain, rising offshore supply chain bills for the underground power station, and higher wages paid to workers.
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