Frontier Energy Limited · ASX:FHE
Frontier Energy — Euroz Hartleys Rottnest Conference 2024
22 slides from Frontier Energy's conference presentation, Mar 14, 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 For personal use only Euroz Hartleys Rottnest Conference 2024 ASX: FHE OTCQB: FRHYF March 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: 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 For personal use only • WA and Australia both had ~35% of electricity generated in 20231 Energy Prices in WA in 2023 c
Slide 4: 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 For personal use only Network needs modifications / extensions • Two connections points (one approved ETAC and one in progress) on the largest capacity • Legacy networks heavily con
Slide 5: 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 For personal use only • All revenue/pricing assumptions provided by independent energy forecaster, Aurora
Slide 6: 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) For personal use only $0.300 • Unique to WA - not in any other Australian State $70 FCESS • Payment pe
Slide 7: 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 For personal use only • RCM is unique to WA, not available in the Eastern States (NEM) 330,000 • Under the RCM, generators re
Slide 8: 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: For personal use only
Slide 9: 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 For personal use only • Debt financing for renewable energy projects attract highly • The Company has received mult
Slide 10: Building a major WA renewable energy company
Building a major WA renewable energy company CAPITAL STRUCTURE 446m Shares on issue For personal use only Stage One DFS complete – FID on track for mid-2024 Strongest ever market conditions for renewable energy deployment $176m At $0.395 / share Market Cap Growth potential of +1GW Ongoing news flow
Slide 11: For more information contact
For personal use only 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 | 11
Slide 12: Ready for green hydrogen when the time is right
Appendix 1 - Ready for green hydrogen when the time is right The market for hydrogen is in its infancy. Frontier has completed a study1 and remains well placed to develop green hydrogen once the market matures. Infrastructure already in place would cost > $1bn and take > 5 years to replicate. For pe
Slide 13: Battery enables revenue uplift through arbitrage
Appendix 2 – 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 For personal use only • WA has the most sunlight hours
Slide 14: 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) For personal use only $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
Slide 15: 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) For personal use only $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
Slide 16: 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 17: WEM compared to the NEM
Appendix 4 – WEM compared to the NEM Wholesale Electricity Market National Electricity Market (WEM) (NEM) For personal use only ~7GW >50GW Installed capacity (MW) (+2GW rooftop solar) (+20GW of rooftop solar) Annual operational demand ~18TWh ~190 TWh Peak operational demand 4GW 36GW • Separate energ
Slide 18: 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 For personal use only • Peak operating demand - 4GW • WA Governme
Slide 19: Waroona Solar Farm/BESS is 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 For personal use only • Waroona Solar Farm/BESS’ generation MLFs ar
Slide 20: 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 21: Synergy has more than 2GW of thermal capacity today
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 For personal use only • State-owned Synergy is the largest participant in the WEM and is expected to decarbonise in
Slide 22: 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 For personal use only Solar (only) Solar/BE
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