Frontier Energy

SAMUEL LEE MOHAN

MANAGING DIRECTOR

(ASX:FHE)

◾ Company Name: Frontier Energy ◾ Company ASX code: FHE ◾ Key areas: Renewable energy, green hydrogen ◾ Key Personnel: Grant Davey, Executive Chair | Samuel Lee Mohan, Managing Director | Chris Bath, Executive Director ◾ Locations: Australia ◾ Market Cap as of 15/10/22: $119.26M ◾ 52 Week share price as of 15/10/22: $0.155 - $0.510 ◾ Company Website: www.frontierhe.com

COMPANY PROFILE

The renewable sector is front and centre as Australia embraces ambitious emission reduction targets, so the timing couldn’t be better for Frontier Energy to push ahead with its aggressive green energy goals.

Frontier is focused on developing the Bristol Springs project in Western Australia’s South West, with stage one forecast to produce at least 4.4 million kilograms of green hydrogen per annum, powered through a 114MW solar farm and a 36.6MW electrolyser.

The company is well-advanced, with a hydrogen study already in place outlining outstanding economics. Chief among these is a low all-inclusive cost of $2.83 per kilogram of green hydrogen. FHE says this places Bristol Springs as one of the lowest cost green hydrogen projects in Australia, and indeed the world.

The company owes this relatively low cost to the project’s location, which allows for a palatable initial capital requirement of $166.3 million for the solar plant and $69.9 million for the electrolyser.

On top of the low initial cost, the Australian government’s ambition to make Australia a leader in the hydrogen industry means attractive financing terms are likely from government bodies including the Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA).

The site is just 3.5km from the nearest connection to the South West Interconnected System – allowing it to both export excess solar renewable energy to the state’s grid and purchase renewable energy like wind from other providers during periods of low or no sun.

It also provides access to multiple fresh water sources, with the company announcing an agreement for scheme water with the Water Corporation which eliminates the need for an expensive desalination facility which would extend approval timelines.

Bristol Springs is also surrounded by major infrastructure and industries likely to be early movers in the transition from fossil fuels to hydrogen.

Opportunities include blending hydrogen into the Dampier to Bunbury Natural Gas Pipeline – WA’s most significant gas transmission asset – which has a connection point 3km from the project where it branches off to provide gas to Alcoa’s Wagerup Alumina Refinery.

With these advantages in mind Frontier is pushing ahead, and recently shortlisted two engineering, procurement and construction contractors for its stage one solar farm.

A separate EPC tender process for the development of the electrolyser to produce green hydrogen will begin following completion of the preliminary front-end engineering and design study (Pre-FEED), due for release in the current quarter.

Frontier has also charted a path for further expansion with a study finding the 846 hectares of land it holds to be enough to host a solar-only facility that could produce at least an additional 438MW of solar.

This would deliver a corresponding increase in green hydrogen production and further improve project economics.

KEY INVESTMENT HIGHLIGHTS

◾ Frontier is on track to becoming one of the first commercial green hydrogen producers in Australia. ◾ Its flagship Bristol Springs green hydrogen project in WA’s South West shapes as one of Australia’s lowest cost green hydrogen projects. ◾ The project benefits from surrounding existing infrastructure, driving low costs as well as speed toward first production – targeted for 2025.