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 Definitive Feasibility Study ASX: FHE OTCQB: FRHYF February 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 For personal use only heatwave > 40oC • In WA and Australia ~35% of electricity generated in 20231 was • Energy Prices in WA in 2023 E
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 How is this evident in WA? Frontier’s Advantage For personal use only Network needs modifications / extensions • Limited network connections, Located in a large capacity transmission capacity, and secti
Slide 5: Perfectly positioned for the renewable energy transition
Perfectly positioned for the renewable energy CAPITAL transition STRUCTURE BUILDING A SCALEABLE 445m RENEWABLE ENERGY HUB Shares on issue For personal use only Stage One DFS complete Major expansion beyond Stage 120MWdc Solar / 80MW four- hour Battery One to create a large renewables hub (incl hydro
Slide 6: Poised to become one of Australia's largest standalone renewable energy projects
Poised to become one of Australia’s largest standalone renewable energy projects Waroona Renewable Energy Project - Snapshot For personal use only • 120km south of Perth near Waroona, WA • Close to existing infrastructure essential for renewables, including network terminal, and skilled workforce Ne
Slide 7: Stage One DFS delivers strong results and platform for growth
Stage One DFS delivers strong results and platform for growth High energy prices are driven by increased demand and limited new supply Production and Capex Optimal Stage One Strategy - 120MWdc solar / 80MW 320MWh battery Item Units Quantity For personal use only Life of operation Years 30 • Strategy
Slide 8: Multiple revenue streams all increasing in a rising market
Multiple revenue streams all increasing 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) – see Appendix 1 for detail For personal use only $0.300 • Unique to WA - not in any other Australian State
Slide 9: 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 10: Quick payback with long sustained strong cashflows
Quick payback with long sustained strong cashflows Rapid post tax payback in the fifth year of production • Total Initial capital requirement - $304m; Operating life of 30 years For personal use only • Payback – 5.8 years (post tax) and 4.7 years (pre-tax) • Stress test case sees a post tax payback
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 For personal use only • Debt financing for renewable energy projects attract highly • The Company has received mult
Slide 12: Frontier's Path to Production
Frontier’s Path to Production Near term contributor to WA Strongest ever market conditions BUILDING A SCALEABLE renewable energy strategy for renewable energy deployment For personal use only RENEWABLE ENERGY HUB Growth potential of +1GW of Ongoing news flow as we progress renewable energy in an pro
Slide 13: 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 | 13
Slide 14: Reserve Capacity underpins battery development
Appendix 1 - Reserve Capacity underpins battery 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 15: 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 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: Price forecasts and revenue – Electricity
Appendix 3A – 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 18: Price forecasts and revenue – RCP and LGC
Appendix 3B – 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 19: The WEM is a tenth of the size of the NEM
Appendix 4 - The WEM is a tenth of the size of the NEM, and operates with a capacity market alongside the day-ahead and balancing wholesale markets WEM NEM For personal use only ~7GW >50GW Installed capacity (MW) (+2GW rooftop solar) (+20GW of rooftop solar) Annual operational demand ~18TWh ~190 TWh
Slide 20: 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 21: 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 and adjacency to the industrial load Central scenario WA network augmentations MLF for Waroona Solar Farm/BESS – Aurora Central For personal use only • Waroona
Slide 22: 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 23: 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 for each coal unit 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 expect
Slide 24: 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