Change to Government Policy Drives Improved Returns for Stage One of Waroona Renewable Energy Project

Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) is pleased to provide an update of the strategy and key targets for 1H 2024 as the Company advances the development of its Stage One Waroona Renewable Energy Project (Project) in Southwest WA, towards a Final Investment Decision (FID) and construction during 2024.

HIGHLIGHTS

• Stage One of the Project will consist of a 120MWdc solar facility with an integrated four-hour 80MW battery. A Definitive Feasibility Study (DFS) is on track for February 2024
• The inclusion of a battery follows a major change in WA Government policy regarding Battery Energy Storage System (BESS)¹ that makes development of a BESS financially more attractive
  • Energy Policy WA’s Coordinator of Energy has now adopted a 4-hour BESS as the reference technology for Benchmark Reserve Capacity (BRCP), a change from the current reference technology of an open-cycle gas turbine (OCGT)
  • Reserve Capacity Payments (RCP) for an 80MW 4-hour battery are forecast to generate ~$24 million in revenue in 2026/27 (excluding RCPs from solar)
• The Company selected this strategy following a detailed assessment of various value adding alternatives and facilities of various sizes. This analysis indicated this combination provided the strongest financial returns with the lowest capital commitment, whilst also offering a lower technical risk compared to alternatives
  • Integrating battery capacity enhances the Project’s returns (compared to solar alone) through increased revenue from RCP, energy storage arbitrage (shifting of energy sales from the midday low to early evening peak prices) and reducing curtailment
• Frontier has commenced preliminary debt financing work. More information regarding this process will be released prior to the DFS
• Frontier continues to advance its dual fuel green hydrogen peaking power plant Study due for release in 2Q 2024
  • Following discussions with suppliers the Company is also assessing a leasing option which could minimise upfront capital costs
• Frontier continues to assess additional opportunities to both produce and sell green hydrogen as part of its renewable energy strategy
• Frontier is fully funded through to Stage One FID with a cash balance of $12.3m²

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