KIDSTON PUMPED STORAGE HYDRO TECHNICAL FEASIBILITY STUDY OPTIMISATION

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1 Level 6, 28 O Cnnell Street Sydney NSW 2000 GPO Bx 4626, Sydney NSW 2001 t e. inf@genexpwer.cm.au w. ASX Annuncement KIDSTON PUMPED STORAGE HYDRO TECHNICAL FEASIBILITY STUDY OPTIMISATION HIGHLIGHTS Cmpletin f ptimisatin study fr K2-Hydr prject Optimised fr 8 hurs f cntinuus generatin capability at 250MW fr ver 2,000MWh f energy strage (+25%) Adptin f variable speed turbines fr significant peratinal and ancillary market benefits Cnstructin timeframe reduced by up t 6 mnths Clear pathway t Financial Clse in 2018 Genex Pwer Limited (ASX: GNX) (Genex r Cmpany) is pleased t prvide an update in relatin t the 250MW Kidstn Stage 2 Pumped Strage Hydr (K2-Hydr) prject at Kidstn, Nrth Queensland. The K2-Hydr prject is part f the verall Kidstn Stage 2 (K2) prject, which includes a c-lcated 270MW slar PV prject (K2-Slar). Genex cmpleted a technical feasibility study fr the K2-Hydr prject in Nvember 2016 (TFS) which was managed by specialist pwer and water cnsulting firm, Entura, in cnjunctin with prject partner, HydrChina. The TFS cncluded that the K2-Hydr prject was technically feasible, and that all the key risks identified wuld be apprpriately addressed thrugh detailed design augmentatin and ptimisatin. Genex has recently been wrking with Mtt MacDnald, a glbal engineering firm which has specialist skills in hydrpwer including pumped strage hydr prjects, n the ptimisatin f the K2-Hydr prject design (TFS Optimisatin). The ptimisatin prcess fcused n taking int accunt recent shifts in the energy market dynamics as well as feedback frm ptential energy fftake parties. TFS Optimisatin Design Changes Fllwing a detailed review f the studies undertaken t date, it was cncluded that an augmented design utilising the tw existing mine pits as the upper (Wises pit) and lwer (Eldridge pit) reservirs, was the ptimal chice fr 250MW f installed capacity, in place f the Turkey s Nest design under the TFS. The ratinale fr the deletin f the Turkey s Nest design was as fllws: The Turkey s Nest design prpsed as part f the TFS was premised upn a larger strage requirement, given the initial preferred prject cnfiguratin f 450MW fr 5 hurs; Given the ptimised design f 250MW, the Wises pit can nw be utilised as the upper reservir fr lwer capital cst; and With minr excavatin and dam wrks, the TFS Optimisatin design prvides fr a channel cnnecting the mdified Wises pit t the existing prpsed lcatin fr the undergrund 1

2 pwer statin cavern, which was subject t detailed drilling and getechnical studies as part f the riginal TFS. Diagrams summarising the new prpsed site layut under the TFS Optimisatin are set ut in the figures belw. Further images frm the TFS Optimisatin reprt are set ut in Annexure A. Figure 1: K2-Hydr prject prpsed general arrangement plan (TFS Optimisatin, Octber 2017) 2

3 Figure 2: K2-Hydr prject prpsed crss sectinal plan (TFS Optimisatin, Octber 2017) In additin t the deletin f the Turkey s Nest design, the TFS Optimisatin determined several ther key changes t the riginal TFS design as fllws: Increased upper reservir vlume frm 6 hurs t ver 8 hurs f cntinuus generatin; Prpsed adptin f variable speed pump-generatr turbines which prvide significant peratinal flexibility, including: Fast generatin ramping via speed adjustment; The ability t better match the hydr pumping prfile t generatin frm the clcated K2-Slar prject; Better pumping efficiency acrss the head range; and Overall suitability in the ancillary service market with increased peratin flexibility; Reduced excavatin and civil wrks requirements; and Cnstructin estimated t take less than 3 years. A summary f the key utputs f the TFS Optimisatin is set ut in the table belw: 3

4 Parameter TFS Nvember 2016 TFS Optimisatin General Installed capacity 250MW 250MW Strage capacity 1,500MWh >2,000MWh Cntinuus Generatin Duratin 6 hurs >8 hurs Turbine Cnfiguratin 2 x 125MW Reversible Fixed Speed Turbines 2 x 125MW Reversible Variable Speed Turbines Upper Reservir Parameters Upper Reservir Vlume 2.8 gigalitres 3.9 gigalitres Upper Reservir FSL 579.0m 551.0m Upper Reservir MOL 571.0m m Upper Reservir Fluctuatin 8.0m 4.1m Lwer Reservir Parameters Lwer Reservir FSL 376.6m 381.0m Lwer Reservir MOL 349.0m 328.4m Lwer Reservir Fluctuatin 27.6m 52.6m Head Maximum Grss Head 230.0m 218.0m Minimum Grss Head 194.4m 181.0m Net Head Rati Time t Ramp Up t Full Generatin Capacity >30 secnds <30 secnds The TFS Optimisatin cncluded that the K2-Hydr prject was feasible based n a capital cst estimate f apprximately $330 millin (including cntingency). Fllwing cmpletin f the TFS Optimisatin, Genex is nw fcused n cnfirming the final capital cst estimates fr the K2-Hydr prject via an early cntractr invlvement (ECI) prcess. This prcess will invlve the appintment f a preferred EPC cntractr, wh will wrk with Genex and its advisers t cmplete the final design ptimisatin and the full EPC and O&M cntracting prcess fr the K2-Hydr prject. Genex will prvide further updates n the ECI selectin prcess in due curse. Prject Financing and Energy Partner Update The K2-Hydr scheme was ptimised based n an assessment f future energy market price frecasts, capacity requirements and direct engagement with ptential energy partners. It is clear that the Natinal Electricity Market is underging a rapid shift frm a traditinal baselad dminant market t a new dynamic where dispatchability and strage f renewable energy will underpin future generatin. In such a system, the rle f large-scale ecnmic energy strage becmes increasingly relevant. The updated design will enable energy ff-takers t take full advantage f the flexibility ffered by the integrated prject and, in ding s, allw Genex t extract maximum value frm the fftake arrangements. Based n psitive engagement with energy fftake and prject finance parties t date, including the Nrthern Australia Infrastructure Facility (refer t ASX Annuncement dated 12 July 2017), Genex believes it has a clear pathway t Financial Clse in Genex Pwer Managing Directr Michael Addisn said: We are pleased t prvide an update n the K2-Hydr ptimisatin, which is the culminatin f mnths f wrk alngside ur advisers. The ptimisatin study utcmes have been develped in respnse t direct feedback frm ptential energy partners amid the nging backdrp f the natinal debate n Energy Plicy, and the imprtance f ensuring dispatchability f renewable energy via energy strage. The Kidstn renewable energy hub is currently the mst advanced, lwest cst, large-scale energy strage prject in the cuntry. Energy strage is likely t play a critical rle in future energy develpment and Genex is well placed t benefit frm these dynamics. 4

5 We lk frward t prviding further updates t the market as we advance the K2 prject tward financial clse, targeted in The Federal Gvernment, thrugh the Australian Renewable Energy Agency has cntinued t supprt the K2-Hydr prject thrugh the TFS and TFS Optimisatin prgrams. T date, Genex has drawn dwn a ttal f apprximately $2.85 millin f its $4.0 millin ARENA funding facility in relatin t the prject. CONTACT: Simn Kidstn Executive Directr Tel: sk@genexpwer.cm.au Abut Genex Pwer Limited: Genex Pwer is a pwer generatin develpment cmpany listed n the ASX. The Cmpany is fcused n innvative clean energy generatin and electricity strage slutins which deliver attractive cmmercial returns fr sharehlders. Fllwing Financial Clse f the 50MW Kidstn Slar Prject (Stage One), the Cmpany s fcus is n the develpment f its 250MW Kidstn Pumped Strage Hydr Prject and the integrated 270MW Kidstn Slar Prject (Stage Tw) lcated at the Kidstn Renewable Energy Hub, in Nrthern Queensland. Abut ARENA ARENA was established by the Australian Gvernment t make renewable energy technlgies mre affrdable and increase the supply f renewable energy in Australia. Thrugh the prvisin f funding cupled with deep cmmercial and technical expertise, ARENA prvides the supprt needed t accelerate the develpment f prmising new slutins twards cmmercialisatin. ARENA invests in renewable energy prjects acrss the innvatin chain and is cmmitted t sharing knwledge and lessns learned frm its prtfli f prjects and infrmatin abut renewable energy. ARENA always lks fr at least matched funding frm the prjects it supprts and t date has cmmitted $1.1 billin in funding t mre than 270 prjects. Fr mre infrmatin, visit 5

6 ANNEXURE A: FURTHER DIAGRAMS FROM TFS OPTIMISATION Figure 3: K2-Hydr prject upper reservir intake gates (TFS Optimisatin, Octber 2017) 6

7 Figure 4: K2-Hydr prject undergrund intakes, pwer statin cavern and access tunnels (TFS Optimisatin, Octber 2017) 7