Frontier Energy Limited · ASX:FHE
Frontier Energy — Investor Presentation (April 2024)
23 slides from Frontier Energy's investor presentation, April 2024
Slide 1: Clean energy to help fill Western Australia's growing supply gap
Clean energy to help fill Western Australia’s growing supply gap Definitive Feasibility Study ASX: FHE OTCQB: FRHYF April 2024 Artist impression of solar facility
Slide 2: Disclaimer
Disclaimer FORWARD LOOKING STATEMENT Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including risks associated with invest
Slide 3: Building an independent, WA focused renewable energy company
Building an independent, WA focused renewable energy company CAPITAL Stage One DFS complete Strategy aligned to Federal and 120MW solar / 80MW battery State government’s renewable STRUCTURE energy and emissions targets Final Investment Decision mid-2024 445m Shares on issue Near term potential to be
Slide 4: Energy transition in WA is already seeing higher energy prices
Energy transition in WA is already seeing higher energy prices Monthly WA Wholesale Electricity Price2,3 Current status of the renewable energy transition unseasonal heatwave > 40oC • WA and Australia both had ~35% of electricity generated in 20231 Energy Prices in WA in 2023 causes peak time • Ener
Slide 5: Frontier's strategic advantages overcome key challenges in the clean energy transition
Frontier’s strategic advantages overcome key challenges in the clean energy transition Key issues Frontier’s Advantage Network needs modifications / extensions • Two connections points (one approved ETAC and one in progress) on the largest capacity • Legacy networks heavily concentrated in urbanised
Slide 6: A major renewable energy production and storage solution in the heart of the SWIS
A major renewable energy production and storage solution in the heart of the SWIS Waroona Renewable Energy Project – Snapshot • 120km south of Perth near Waroona, WA • Close to existing infrastructure essential for renewables, including network terminal and workforce. • 868ha freehold land – 100% co
Slide 7: Stage One DFS delivers strong results and platform for growth
Stage One DFS delivers strong results and platform for growth Strong economic returns, low technical risk and ability to expand quickly Stage One Strategy – 120MWdc solar, 80MW / 320MWh battery • All revenue/pricing assumptions provided by independent energy forecaster, Aurora Energy Research • Base
Slide 8: Multiple revenue streams, potential increase in a rising market
Multiple revenue streams, potential increase in a rising market Strong forecast average revenue of $74m per year over the first 5 years $80 Reserve Capacity Payments (RCP) – $27.1m (36% of revenue) $0.300 • Unique to WA - not in any other Australian State $70 FCESS • Payment per MW based on RCP – Yr
Slide 9: Why is WA different? Reserve Capacity underpins development
Why is WA different? Reserve Capacity underpins development Unique to WA and a major driver in development strategy Reserve Capacity Mechanism (RCM) Reserve Capacity Payment1 • RCM is unique to WA, not available in the Eastern States (NEM) 330,000 • Under the RCM, generators receive annual payments
Slide 10: Low operating costs ensure long term sustainable profitability
Low operating costs ensure long term sustainable profitability Long life, low operating costs in first world jurisdiction ensures favourable funding solutions • Once constructed, renewable energy projects are typically always profitable (over the course of a year) due to their: • Low operating costs
Slide 11: Funding Strategy - Debt and strategic partnership process
Funding Strategy - Debt and strategic partnership process Targeting minimal future dilution for existing shareholders through dual funding strategy Debt Financing Strategic Partnership • Debt financing for renewable energy projects attract highly • The Company has received multiple unsolicited appro
Slide 12: Frontier's path to production
Frontier’s path to production BUILDING A SCALEABLE RENEWABLE ENERGY HUB Near term contributor to Major growth potential in Strategy aligned to Federal WA renewable energy an unconstrained section and State government’s strategy of the grid energy and emission targets Milestone 1Q24 2Q24 3Q24 4Q24 20
Slide 13: For more information contact
For more information contact Adam Kiley CEO +61 8 9200 3428 akiley@frontierhe.com ASX:FHE frontierhe.com ASX: FHE OTCQB: FRHYF frontierhe.com ASX:FHE / OTCQB: FRHYF | 13
Slide 14: Appendix 1 - Battery enables revenue uplift through arbitrage
Appendix 1 - Battery enables revenue uplift through arbitrage Opportunity to increase received electricity price, while minimising risk of curtailment Electricity price follows supply and demand Electricity revenue uplift example – January 2023 • WA has the most sunlight hours in the country and one
Slide 15: 2A – Price forecasts and revenue – Electricity
Appendix 2A – Price forecasts and revenue – Electricity1 Battery 180 28 Battery price and revenue 160 26 $/MWh (real 2024) $m pa (nominal) • The Base Case battery price forecast is ~$150/MWh (close to 24 Spot), with the Stress Test scenario ~$120/MWh. 140 22 • Early volatility due to adding battery
Slide 16: 2B – Price forecasts and revenue – RCP and LGC
Appendix 2B – Price forecasts and revenue – RCP and LGC RCP 330 30 RCP price and revenue 280 28 $/MWh (real 2024) $m pa (nominal) 26 • The BRCP has been set at $230,000 per MW for 2026/271 230 24 • As the market is forecast to be in deficit, an additional 22 180 30% premium is applied 20 • New gener
Slide 17: Appendix 3 - Large Generation Certificates (LGCs) beyond 2030
Appendix 3 - Large Generation Certificates (LGCs) beyond 2030 The Federal Government has released a consultation paper on green certificates to replace LGCs beyond 2030 Renewable Energy Guarantee of Origin (REGO) certificates: proposed Key attributes of each certificate design • Existing attributes
Slide 18: Appendix 4 - WEM compared to the NEM
Appendix 4 - WEM compared to the NEM Wholesale Electricity Market National Electricity Market (WEM) (NEM) ~7GW >50GW Installed capacity (MW) (+2GW rooftop solar) (+20GW of rooftop solar) Annual operational demand ~18TWh ~190 TWh Peak operational demand 4GW 36GW • Separate energy + capacity • Regiona
Slide 19: Appendix 5 - Frontier's key advantage – grid connections at a central node
Appendix 5 - Frontier’s key advantage – grid connections at a central node Frontier’s high quality, unconstrained connection onto the network enables uncurtailed renewable energy sales • The SWIS is the major electricity network in WA • Peak operating demand - 4GW • WA Government plans to expand the
Slide 20: Appendix 6 - Waroona Solar Farm/BESS expected to see robust MLFs
Appendix 6 - Waroona Solar Farm/BESS is expected to see robust MLFs over the forecast horizon, due to its well- connected surrounding network Central scenario WA network augmentations MLF for Waroona Solar Farm/BESS – Aurora Central • Waroona Solar Farm/BESS’ generation MLFs are expected to remain h
Slide 21: Appendix 7 - Renewable and battery projects for the SWIS
Appendix 7 - Renewable and battery projects for the SWIS WA renewable energy projects with announced development plans1 – 476MW new generation capacity so far announced, while 1,200MW to be closed by 2029. 1,335MW battery storage is planned to firm up renewables Project Forecast production Size Owne
Slide 22: Appendix 8 - Synergy thermal capacity and announced closure dates
Appendix 8 - Synergy has more than 2GW of thermal capacity today but has announced closure dates Synergy coal and gas plant capacity, and coal plant retirements1 Coal closure schedule • State-owned Synergy is the largest participant in the WEM, and is expected to decarbonise in line with state gover
Slide 23: Appendix 9 - Stage One – 120MW Solar/80MW 4-hour Battery
Appendix 9 - Stage One – 120MW Solar/80MW 4-hour Battery Superior and stable returns, increased funding optionality and lower development risk compared to alternatives. Frontier continues to assess opportunities, including in hydrogen, for future expansion Solar (only) Solar/BESS Hydrogen Low High H