Energy stocks GNX: The ASX is not the place for pure energy transition bets

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The ASX just hasn’t cracked it as a destination for the next wave of green electricity generators. Genex Power is the latest to be worth more in private hands.

Already a subscriber?It is Origin Energy and AGL Energy first, daylight second, for equity market investors seeking a way to fund Australia’s energy transition.You can invest in Origin and AGL and their coal-fired cashflows today, and be part of their transition tomorrow, but there is not much else for anyone wanting to chip into Australia’s whopping $300 billion task of greening the grid.

It will be sayonara Genex, just like it was for Infigen Energy, Tilt Renewables and New Energy Solar, the other renewables developers to disappear from the ASX boards in the past 3½ years.AustralianSuper fought so hard to keep Origin Energy listed late last year Pure-play renewables are hard to find and getting harder. It’s arguably the hottest theme in the world, just not on the ASX.That tells us Australia’s $300 billion funding hurdle to green the grid – six times the cost of the NBN or 50 per cent more than went into Australia’s mining super cycle almost 15 years ago, as fund manager Schroders points out – will be more about the existing gen-tailers, private capital players and global utilities than specialist ASX-listed renewables developers.

Genex has taken the old Kidston gold mine, 280km south west of Cairns, and is turning it into a pumped hydro project.Genex has all of that, and more, which may help explain why its board is waving the white flag at 27.5¢ a share only a year or two from when the company is supposed to hit its straps. None of it has been quick or cheap, and Genex has repeatedly tapped equity markets, banks, government agencies and strategic investors to keep developments moving.Even after all the raisings and debt deals, Genex has never posted an operating profit, while its biggest projects are still in front of it. There are a lot of moving parts.

 

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