Overview
The world is quickly transitioning in the direction of renewable vitality. Whereas Australia and WA have come a great distance, reaching ~35 p.c of electrical energy generated by renewables in 2023, we’re nonetheless considerably wanting the 2030 goal of 82 p.c. Concurrently the transition is going on, there is a rise in electrical energy consumption: the Australian Power Market Operator (AEMO) forecasts WA’s electrical energy demand will improve between 78 p.c and 220 p.c over the subsequent decade. This improve in demand, together with the phasing out of coal-fired energy provide (which represents roughly 30 p.c of present provide) to be accomplished by 2029, is forecast by AEMO to trigger a big and rising hole in energy technology capability over the subsequent decade.
Frontier Power (ASX:FHE;OTCQB:FRHYF) intends to satisfy the WA market’s pressing requirement for renewable vitality. The corporate’s Stage One improvement plan for its Waroona Renewable Power Undertaking will encompass a 120 MWdc photo voltaic facility with an built-in four-hour 80 MW battery. Frontier is on monitor to finalise a definitive feasibility examine (DFS) for Stage One in February 2024 and targets FID through the first half of 2024.
Frontier can also be evaluating value-add alternatives, together with alternatives to develop inexperienced hydrogen manufacturing to maximise the worth of vitality produced. The Stirling Trunk Water Primary, which is positioned ~3 km from the WREP, might allow procurement of water for inexperienced hydrogen electrolysis. The Dampier to Bunbury Pure Fuel Pipeline, which runs adjoining to the venture, might doubtlessly enable for supply of inexperienced hydrogen into future home and export markets.
Key Undertaking
Waroona Renewable Power Undertaking
The Waroona Renewable Power Undertaking is positioned 120 km from Perth within the South West of Western Australia, and is on monitor to change into one of many largest renewable vitality initiatives in Australia.
The venture’s location, near main current infrastructure and close by regional cities, gives a number of strategic benefits. The close by 330 kV Landwehr Electrical energy Terminal will enable the corporate to promote electrical energy through the South West Interconnected System (SWIS), Western Australia’s fundamental vitality grid. The Landwehr Terminal is positioned on one of many highest capability transmission strains within the SWIS. Close by cities together with Waroona, Collie and Mandurah can present a extremely expert workforce.
In December 2023, Frontier accomplished the acquisition of Waroona Power (TSXV:WHE.V), combining two adjoining initiatives to create a large-scale Australian renewable vitality firm, with 868 ha of freehold land, shovel-ready photo voltaic technology of 355 MW and the potential to develop to greater than 1GW.
The corporate is pursuing a staged improvement method focusing on excessive demand markets and future progress alternatives. On condition that the WA electrical energy grid is going through a significant supply-demand deficit, the preliminary improvement phases will give attention to renewable electrical energy technology and storage. Stage One includes a 120 MWdc Photo voltaic farm with an built-in 80 MW four-hour battery. Approvals, permits and grid connections are all in place.
Income Drivers
Reserve Capability Mechanism (RCM)
The RCM is exclusive to WA, and isn’t accessible within the Jap States/NEM. Below the RCM, turbines obtain annual funds per MW, based mostly on a benchmark reserve capability worth (BRCP) decided by the Power Regulator. New turbines can lock within the BRCP for 5 years. BRCPs have elevated strongly over the previous 5 years, to $230,000/MW for 2026/27. Latest modifications in authorities rules have meant {that a} four-hour battery proposed for Waroona could qualify for 100% of the BRCP. Moreover, when the market is in deficit, an extra 30 p.c is paid, and AEMO forecasts deficits for the subsequent decade.
For an 80 MW battery, this means ~$24 million every year. This may be locked in for 5 years and gives a set (rising with CPI), assured earnings.
Electrical energy gross sales and arbitrage enabled by built-in battery
Wholesale vitality costs in WA have elevated on common by 77 p.c over the previous two years, reflecting the rising tightness of the provision/demand stability.
WA has probably the most daylight hours in Australia and one of many highest set up charges of rooftop photo voltaic at 38 p.c, anticipated to extend to ~50 p.c by 2030. Consequently, the electrical energy worth dips through the day, when photo voltaic technology peaks, whereas within the afternoon/night, demand will increase whereas photo voltaic technology declines, inflicting the worth to rise sharply.
The mixing of a battery with Frontier Power’s photo voltaic farm permits electrical energy gross sales to be ‘shifted’- i.e. electrical energy is saved in low worth intervals and offered in excessive worth intervals. An 80 MW battery is sized to allow substantial shift of electrical energy gross sales. Consequently, Frontier’s day by day income profile will look roughly as follows (topic to photo voltaic radiation every day):
- Photo voltaic vitality gross sales – early morning
- Battery cost – morning to noon/early afternoon
- Battery discharge mixed with photo voltaic gross sales – early night (throughout peak electrical energy demand).
Administration Staff
Grant Davey – Govt Chair
Grant Davey is an entrepreneur with 30 years of senior administration and operational expertise within the improvement, development and operation of worldwide mining and vitality initiatives. He’s the chairman of Frontier Power (ASX:FHE), a Director of Lotus Sources Restricted (ASX:LOT) and Cradle Sources (ASX:CXX) and is a member of the Australian Institute of Firm Administrators.
Adam Kiley – Chief Govt Officer
Adam Kiley is an completed assets and vitality government, with 20 years’ expertise. He brings vital expertise in numerous fields, together with fairness capital markets, debt advisory, venture improvement research, and venture analysis, having beforehand held some senior government positions. He was beforehand the managing director and CEO of Waroona Power and can also be a non-executive director of Copper Strike (ASX:CSE).
Chris Tub – Govt Director
Chris Tub is a chartered accountant and member of the Australian Institute of Firm Administrators, with greater than 20 years of senior administration expertise within the vitality and assets sector each in Australia and south-east Asia. Tub has broad expertise together with monetary reporting, industrial 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. At the moment, Marshall is the chief progress 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. She is the deputy chair of the WA Soccer Fee and commissioner of the Australian Sports activities Fee and director of Lotus Sources.
Amanda Reid – Non-executive Director
Amanda Reid has a major background in authorities relations offering recommendation to a large cross part of corporations and organisations for greater than 15 years for 2 nationwide authorities relations and company communications companies. This included 5 years as Associate at GRA Companions. She was additionally a senior adviser in earlier WA State Governments with accountability for managing a strategic communications unit. She has held non-executive board positions throughout each non-public corporations and not-for-profit organisations and is a member of the Australian Institute of Firm Administrators.
Warren King – Chief Working Officer
Warren King is an engineer with 25 years of expertise, specialising within the client-side venture administration of the engineering, design, procurement and development of mineral processing crops and mine infrastructure (together with numerous gasoline energy options and photo voltaic). He has labored in Africa, Indonesia and Australia and holds a Bachelor of Engineering (mechanical) and a Bachelor of Legal guidelines diploma. He has carried out and managed numerous venture execution fashions (comparable to EPC, EPCM, and EP with proprietor managed development).
Amy Sullivan – ESG Supervisor
Amy Sullivan has nearly 20 years’ expertise within the mining trade throughout Australia, holding government roles in approvals, setting, neighborhood and authorities relations. While working with VHM Restricted, She led the approvals and progress workforce for the Goschen Uncommon Earths and Mineral Sands venture and performed a key function in establishing relationships with authorities, native councils, and the neighborhood, in addition to managing the state and commonwealth approvals technique, together with acquiring main venture standing. Sullivan has practiced as a sustainability and ESG advisor working with corporations to implement ESG and sustainability methods. Sullivan holds a Bachelor of Environmental Administration with Honours from the College of Notre Dame.
Martin Stulpner – Company Growth Supervisor
Martin Stulpner has greater than 20 years’ expertise within the mining and monetary companies industries, together with in company improvement, M&A, strategic planning, and fairness analysis (promote facet). His earlier senior management positions embrace GM at Aquila Sources, the place he had accountability for Aquila’s stake within the West Pilbara Iron Ore Undertaking (now below development because the $3 billion Onslow Iron venture), and for Aquila’s South African enterprise. As Director at Macquarie, Stulpner offered fairness analysis of Western Australian metals and mining corporations to institutional traders in Australia and globally.
Catherine Anderson – Firm Secretary
Catherine Anderson is a authorized practitioner admitted in Western Australia and Victoria with greater than 30 years’ expertise in each high-level non-public follow and in-house roles, notably in capital elevating, company acquisitions, structuring and regulatory compliance. She has suggested on all elements of company and industrial legislation and brings in depth expertise in a spread of industries, particularly the mining and IT/cyber safety sectors.
Anderson is an skilled firm secretary for each listed and unlisted public corporations and has served as a director of an ASX listed junior explorer. She has offered consultancy companies to entities wishing to proceed to IPO and ASX itemizing, and has twice been nominated for the Telstra Enterprise Girl of the 12 months Award.
