As Western Australia continues to face a looming vitality supply-demand deficit throughout the subsequent decade, vital investments in energy era for the area are imminent and Frontier Power (ASX:FHE, OTCQB:FRHYF) is completely positioned to probably turn out to be not solely a key a part of the State’s vitality resolution within the instant future, but additionally profit from what’s forecasted to be record-high vitality costs.
The South West Interconnected System (SWIS), the primary electrical energy grid for Western Australia’s southwest area, is in instant want of appreciable funding in electrical energy era for the area, with the Australian Power Market Operator projecting a rise in vitality demand of between 78 and 220 p.c.
The challenges this forecast represents are solely additional exacerbated by the Federal Authorities’s plans round renewable vitality. By 2030, Australia goals for 82 p.c renewable energy era. This contains the deliberate closure of all coal-fired energy capability by the identical 12 months, which represents roughly 30 p.c of provide.
Solely 35 p.c of the SWIS is at the moment generated by renewable vitality.
While the State is planning a serious growth of the grid, this can take time and appreciable value. Following this growth, further funding and additional time for approvals are required to develop new vitality to connect with the grid.
WA’s points are not at all an remoted occasion on a worldwide scale, with grid constraints persistently recognized as the foremost roadblock to reaching its renewable vitality targets, all whereas additionally guaranteeing vitality safety and steady provide.
Frontier Power, a near-term, totally built-in renewable vitality and hydrogen developer, will be capable of meet the market’s pressing requirement for vitality with the event of their Stage One (120MW) photo voltaic venture to begin building in 2024.
This, nonetheless, is de facto solely the beginning for Frontier, as they’ve outlined a three-pronged technique that goals to not solely meet these pressing vitality necessities and better costs, but additionally place the corporate for future development industries, akin to hydrogen. This technique will see the corporate develop three important areas of the enterprise: photo voltaic, hydrogen and a twin fueled hydrogen (pure gasoline) peaking plant.
The explanation Frontier is able to transfer ahead so rapidly is that the flagship venture the place the whole lot is going down, Bristol Springs, advantages from world-class infrastructure and strategic partnerships, which embrace an settlement with Western Australia’s Water Company, entry to the Dampier Bunbury Pipeline, pre-approved energy connections, and 868 hectares of freehold land with no native title. With out these property and partnerships, the venture’s capex would have elevated by over $1 billion and its manufacturing timeline would lengthen to greater than 5 years. As well as, all permits and approvals for the venture have already been secured.
Maybe probably the most important facet, nonetheless, is that the connection to the WA electrical energy community is already in place. These connections are extraordinarily tough to entry and take years to ascertain.
Frontier is wanting far past its Stage One improvement as the corporate lately introduced the deliberate acquisition of Waroona Power (TSXV: WHE) that shall be accomplished in December 2023. This transaction will give Frontier entry to 355 MW of shovel-ready photo voltaic era, with potential to broaden to over 1 GW, which may probably play an necessary position within the State’s vitality necessities.
Renewable Power resolution within the coronary heart of business WA
- Frontier’s flagship venture, Bristol Springs, has entry to world-class infrastructure which significantly reduces each upfront capex and its total improvement timeline.
- The acquisition of Waroona Power will function a capstone on Frontier’s improvement technique, including 355 MW of solar energy era with the capability to broaden as much as 1 GW.
- The corporate is anticipated to generate main information circulation because it strikes in direction of FID on a number of improvement alternatives in 2024.
- These are the strongest ever market circumstances for each renewable vitality and hydrogen deployment. A near-term, totally built-in renewable vitality and hydrogen producer, Frontier Power is ideally positioned to profit from these circumstances.
- The South West Interconnected System, Western Australia’s major energy grid and vitality market, is in dire want of funding in new electrical energy era.
- The present demand forecast over the subsequent decade ranges from 78 p.c to 220 p.c. Assembly this demand shall be much more difficult provided that the State intends to shut all coal-fired energy capability, which at the moment accounts for roughly 30 p.c of energy era, by 2030.
- SWIS at the moment generates solely 35 p.c of its energy by way of renewables, far beneath the Australian authorities’s goal of 82 p.c.
- The corporate has a three-pronged improvement technique, starting with the institution of photo voltaic infrastructure as a basis adopted by the deliberate building of a dual-fuel hydrogen peaking plant and entry into the inexperienced hydrogen market.
- Frontier’s finish aim is to develop a scalable renewable vitality hub which is able to create long-term sustainable worth and supply a big contribution to each the State and Federal decarbonisation technique.
Located 120 kilometres from Perth, Frontier’s Bristol Springs Renewable Power and Inexperienced Hydrogen venture is on observe to begin building of Stage One photo voltaic improvement in 2024. The 868-hectare venture is situated on flat, predominantly cleared freehold land which is simply 3.5 kilometres from the Landwehr Energy Terminal, lower than 3 kilometres from the Stirling Trunk Foremost Water Pipeline and three kilometres from a gasoline branching level linked to the Dampier-Bunbury Pipeline. Its proximity to this infrastructure reduces the venture’s upfront capex and considerably accelerates its improvement timeline.
Frontier is at the moment engaged on a proposed acquisition of Waroona Power for which it has already signed a Letter of Intent. This transaction, as soon as accomplished, will rework Frontier right into a large-scale renewable vitality firm with shovel-ready photo voltaic era of 355 MW and the potential for growth to over 1 GW. This acquisition additionally supplies Frontier with a novel, accelerated turnkey resolution for the event and consumption of inexperienced hydrogen courtesy of Waroona’s proposed 120 MW twin gasoline peaking plant, probably positioning Frontier because the main developer of inexperienced hydrogen within the nation.
All improvement on Bristol Springs shall be carried out with a deal with sustainability, as detailed in Frontier’s Q2 2023 inaugural Sustainability Report.
- Betting on Photo voltaic: Photo voltaic vitality is without doubt one of the most superior and most dependable renewable vitality options, significantly in Australia, which has among the greatest circumstances for producing solar energy. Capital prices for photo voltaic have additionally fallen considerably over the previous decade, while innovation upside is arguably close to its peak.
- Assembly a Market Want: Frontier’s multi-pronged technique is geared toward assembly the wants of the electrical energy market while concurrently maximising its profitability:
- Photo voltaic vitality will energy the corporate’s hydrogen technique throughout low-price/shoulder durations.
- Inexperienced hydrogen manufacturing will happen throughout noon.
- A peaking plant will function within the early night and early morning, throughout instances of peak vitality consumption.
- Accelerated Improvement: Bristol Springs advantages from the next agreements, insurance policies and infrastructure:
- The Landwehr Terminal will present the venture’s accomplished grid with as much as 1.1 GW of electrical energy export capability by way of two connections.
- An settlement with the Water Company provides the venture entry to 1,250 kl of fresh, recent water per day and eliminates the price of setting up a desalination facility (water is a vital component to create inexperienced hydrogen – the opposite being renewable vitality).
- Frontier intends to leverage the Australian Authorities’s Hydrogen Headstart program for additional improvement. It at the moment meets all standards for consideration.
- A possible connection level to the DBNGP, Australia’s largest pure gasoline pipeline, is situated simply 0.3 kilometres from the positioning of the venture’s proposed hydrogen plant. Federal and State governments have already begun the method of amending pure gasoline legal guidelines and laws to introduce hydrogen and related gasses.
- Present Progress: Stage one improvement of the venture is nearing its ultimate funding determination (FID). Frontier/Waroona commenced a DFS for a 120-MWdc photo voltaic facility, which is able to ship a set value estimate and finalise the design, dimension and know-how choice.
- A Pathway for Inexperienced Hydrogen Consumption: Waroona Power has commenced a research to evaluate the event of a inexperienced hydrogen twin gasoline peaking plant which is anticipated to be accomplished in This fall 2023. The 120-MW peaking plant, which will be fuelled by each inexperienced hydrogen and pure gasoline, would generate a minimal of ~AU$27million every year in income.
Samuel Lee Mohan — Managing Director
Samuel Lee Mohan is an completed vitality govt with over 20 years of expertise within the vitality and utilities trade. His expertise spans many aspects of the trade, from design and building by way of to strategic asset administration, regulation, coverage, business and innovation.
His earlier senior administration positions embrace International Head of Hydrogen of Xodus Group, a subsidiary of Subsea 7, the place he developed and led the corporate’s total hydrogen technique. On this position, he additionally conceptualised the corporate’s largest hydrogen venture, Venture MercurHy. Previous to Xodus Group, Lee Mohan spent six years at ATCO, the place he was instrumental in creating the corporate’s hydrogen technique together with the conceptualisation, design and building of Australia’s first inexperienced hydrogen Microgrid, the Clear Power Innovation Hub.
Lee Mohan earned his MSc in mechanical engineering from the College of Portsmouth and an MBA from the Australian Institute of Enterprise.
Grant Davey — Government Chair
Grant Davey is an entrepreneur with 30 years of senior administration and operational expertise within the improvement, building and operation of worldwide mining and vitality initiatives.
He’s the chairman of Frontier Power (ASX:FHE), director of Lotus Sources (ASX:LOT) and Cradle Sources (ASX:CXX), and is a member of the Australian Institute of Firm Administrators.
Chris Tub — Government Director
Chris Tub is a chartered accountant and member of the Australian Institute of Firm Administrators with over 20 years of senior administration expertise within the vitality and sources sector, each in Australia and Southeast Asia. Tub has broad expertise together with monetary reporting, business administration, venture acquisition, ASX compliance and governance. He’s a non-executive director of Cradle Sources and firm secretary of Copper Strike.
Dixie Marshall — Non-executive Director
Dixie Marshall has 40 years’ expertise in strategic communications together with disaster communications, editorial media, promoting, advertising and marketing and authorities communications.
Presently the chief development officer of Marketforce, WA’s oldest promoting company, Marshall beforehand labored because the Western Australian Authorities’s director of strategic communications in addition to for the 9 Community as a senior information anchor. Presently, she serves because the deputy chair of the WA Soccer Fee and a commissioner of The Australian Sports activities Fee and can be a director of ASX-listed Lotus Sources.
Amanda Reid — Non-executive Director
Amanda Reid has a big background in authorities relations, offering recommendation to a large cross part of firms and organisations for greater than 15 years for 2 nationwide authorities relations and company communications corporations. This included 5 years as Associate at GRA Companions. She was additionally a senior adviser in earlier WA state governments with duty for managing a strategic communications unit.
She has held non-executive board positions throughout each personal firms and not-for-profit organisations and is a member of the Australian Institute of Firm Administrators.
Catherine Anderson — Firm Secretary
Catherine Anderson (B Juris (Hons), LLB (UWA)) is a authorized practitioner admitted in Western Australia and Victoria with over 30 years’ expertise in each high-level personal follow and in-house roles, significantly within the space of capital raisings, company acquisitions, structuring and regulatory compliance. She has suggested on all facets of company and business legislation and brings intensive expertise over a variety of industries, specifically the mining and IT/cyber safety sectors.
Anderson is an skilled firm secretary for each listed and unlisted public firms, and has served as a director of an ASX listed junior explorer. She has offered consultancy providers to entities wishing to proceed to IPO and ASX itemizing and has twice been nominated for the Telstra Enterprise Lady of the 12 months Award.
Warren King — Technical Director (Power)
Warren King is an engineer with 25 years of expertise, specialising within the client-side venture administration of the engineering, design, procurement and building of mineral processing crops and mine infrastructure (together with varied gasoline energy options and photo voltaic). He has labored in Africa, Indonesia and Australia and holds each a Bachelor of Engineering (mechanical) and a Bachelor of Legal guidelines diploma.
King has carried out and managed varied venture execution fashions (akin to EPC, EPCM, and EP with proprietor managed building).
Amy Sullivan — ESG Supervisor
Amy Sullivan has virtually 20 years’ expertise within the mining trade throughout Australia, holding govt roles in approvals, setting, group and authorities relations. While working with VHM Restricted, she led the approvals and development staff for the Goschen Uncommon Earths and Mineral Sands Venture and performed a key position in establishing relationships with authorities, native councils and the group in addition to managing the State and Commonwealth approvals technique, together with acquiring main venture standing.
Extra lately, Sullivan practised as a sustainability and ESG marketing consultant working with firms to implement ESG and sustainability methods. She holds a Bachelor of Environmental Administration with Honours from the College of Notre Dame.
Martin Stulpner — Company Improvement Supervisor
Martin Stulpner has over 20 years’ expertise within the mining and monetary providers industries, together with in company improvement, M&A, strategic planning and fairness analysis (promote facet).
Stuplner’s earlier senior management positions embrace GM at Aquila Sources, the place he was accountable for Aquila’s stake within the West Pilbara Iron Ore Venture (now below building because the $3-billion Onslow Iron Venture) and for Aquila’s South African enterprise. As director at Macquarie, he offered fairness analysis of Western Australian metals and mining firms to institutional buyers in Australia and globally.
Lastly, as VP of technique at Anglo American Ferrous Metals (FTSE 100), Stulpner developed and led a worldwide strategic planning staff to facilitate knowledgeable strategic determination making by the manager.