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Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) engaged independent specialist energy and resources consultancy ResourcesWA, to undertake an assessment (the Report) of Western Australia’s major electricity network, the South West Interconnected System (SWIS).
The Report focused on evaluating potential capacity for large scale connections at existing substations and terminals across the 330kV and 220kV transmission network, from now until 2032.
This Report was commissioned by the Company to gain a better understanding of new large- scale developments on the SWIS, similar to the potential of the Bristol Spring Renewable Energy Project (the Project) in the short to medium term.
The development of multiple, large scale energy projects on the SWIS would affect wholesale electricity prices (if supply outstripped demand) and therefore potential returns on Frontier’s Stage One Project development that is planned to commence in 2024.
The Report however concluded that “there are no other opportunities that exist on the SWIS for the development of a connected generator of the scale of the Bristol Spring Renewable Energy Project in the short or medium term”. The reasons for this include:
- The North Region is limited due to the existing thermal constraints on the 330kV and 132kV transmission networks in this region (see map below for region locations);
- The East Region does not present any opportunities for large scale network connected generation in the near term due to limitations of the 220kV transmission. Limitations on transfer capacity from Merredin west limit new generation in the middle area of the East Region, with new wind developments at Kondinin absorbing transmission capacity between Merredin and Collie;
- The South Region Terminals present immediate and near term opportunities for large scale network connection.
However, within the 330kV network both Oakley and Kemerton are dependent upon existing industrial loads, with Kemerton already at its upper limits due to industrial loads within the Kemerton industrial area.
The Collie region, including the Muja and Bluewaters substations, have substation connection and transfer capacity within the 330kV network, and will present opportunities following the closure of the coal-fired power stations (planned for 2029). However, the region is surrounded by State forests, limiting land availability, with the majority of cleared land currently mined for coal and requiring rehabilitation post 2030; and - Until 2030, only Landwehr Terminal (where the Project is located) can readily accommodate new large scale renewable connections of 250MW or greater. It is expected that a number of Behind the Meter connections will be developed by industry whilst smaller scale renewable and large scale battery storage are expected to be developed in conjunction with existing generators at selected substations and terminals.
Figure 1: SWIS 330kV – 220kV network and Regions
The Report supports the Australian Energy Market Operator annual Wholesale Electricity Market Electricity Statement of Opportunities (ESOO Report), which stated “the urgency of advancing generation, storage, demand side management and transmission projects to bolster reliability and support a rapid and orderly energy transition. Its findings emphasise the need for additional capacity procurement and expedited progress of capacity projects in the SWIS.” The ESOO Report also highlighted demand is forecast to increase significantly over the next decade to at least 78% (Expected Case), with an Upside Case increasing by more than 220%.
A copy of the ESOO "Report is attached to this announcement.
Frontier Managing Director, Sam Lee Mohan, commented: “While we always believed the Bristol Springs Renewable Energy Project was the best undeveloped renewable energy project in WA, we did not appreciate that it is the only project of its size that can access the SWIS network in the short to medium term. This again highlights what a unique opportunity the Company has with the Project, as well as the growing importance of the Project to the State, at a time when energy prices are continuing to rise and energy security is becoming more important than ever.
The next few months are shaping up as the most significant in the Company’s history with multiple major events on the horizon. First, we expect to complete the acquisition of Waroona Energy Inc. in December 2023. This transaction will then be followed by a DFS for Waroona’s Stage One Solar development (120MW) as well as the Peaking Plant Study expected to be released in 1Q24.”
This article includes content from Frontier Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
FHE:AU
Term Sheet for Hydrogen Supply and Offtake with Uniper
Highlights:
- Provaris, Uniper and Norwegian Hydrogen sign a conditional Term Sheet for hydrogen supply, transport and offtake.
- Agreed Key Terms and Conditions to form the basis of negotiating a binding Hydrogen SPA, targeted for June 2025.
- Annual volume of 42,500 tonnes per year of RFNBO1-certified hydrogen to be delivered as gaseous compressed hydrogen using Provaris’ H2Neo carriers.
- Uniper Global Commodities SE will be the buyer of hydrogen at an agreed fixed price and responsible for the receiving terminal in North-Western Europe for delivery.
- Commencement of cargos deliveries is targeted for early-2029, for a minimum term of 10-years, making it Europe’s first regional hydrogen marine transport project at scale.
- Term Sheet for supply of hydrogen using Provaris carriers demonstrates Uniper’s commitment to a portfolio of supply sources, including a focus on supply from the Nordic Region.
- Provaris’ approach to hydrogen supply and transport provides a standardized, efficient and flexible approach to scaling hydrogen supply, which is exactly what Germany and Europe needs to meet its 2030 decarbonisation targets.
Execution of the Term Sheet achieves a significant milestone under the Memorandum of Understanding (MOU), announced in August 2024, and facilitates ongoing co-operation on developing hydrogen supply chains based on Provaris’ compressed hydrogen carriers from Norway and other potential Nordic sites to import locations in North- Western Europe.
Provaris’ Managing Director and CEO, Martin Carolan, stated: “We are delighted to see the collaboration has progressed to a Term Sheet for hydrogen supply and offtake. This represents a key milestone for Provaris and validation towards developing regional bulk-scale hydrogen supply chains within Europe using Provaris’ H2Neo compressed hydrogen carriers.”
Norwegian Hydrogen CEO, Jens Berge, added: “We’re very excited about this tri-party collaboration, and it’s rewarding for all three parties to see our efforts progress into increasingly concrete and advanced stages”
Uniper Global Commodities SE, Senior Vice President - New Energies Origination, Benedikt Messner, commented: “We think that the innovative transport concept by Provaris might be a solution to connect commercially interesting hydrogen supply locations with our core markets and look forward to the continuation of our collaboration.”
Compression Replaces Complexity with Simplicity to Lower the Delivered Cost of Hydrogen
Analysis by the collaboration partners has highlighted that when customer demand is for hydrogen (not a derivative), regionally sourced hydrogen from the Nordics, transported through Provaris’ compressed hydrogen carriers, provides an efficient and cost-effective supply chain, limiting the losses in the entire chain from electrolyzer through to the distribution pipeline in Europe.
Lowering the energy consumption over the entire supply chain results in more renewable energy available for hydrogen production and higher volumes delivered.
Hydrogen Supply Chain Development
Provaris and Norwegian Hydrogen are collaborating on the development of the supply of RFNBO compliant hydrogen, which will be stored and transported using Provaris’ H2Neo carriers. Work is underway to outline the preferred sites in the Nordics, including Norway and Finland. Sites with a detailed feasibility include the FjordH2 Project located in the Alesund region, Norway.
Based on the proposed hydrogen volumes and shipping distance, the supply chain’s storage and shipping infrastructure using Provaris’ proprietary shipping solutions will include one (1) H2Leo barge storage at the production site, with a capacity of 450 tonnes of compressed hydrogen at 250 barg pressure, and two (2) H2Neo hydrogen carriers with an individual storage capacity of 450 tonnes of compressed hydrogen at 250 barg pressure. Provaris continues to progress both the H2Neo and H2Leo towards Final Class approvals in the first half of 2025.
Uniper will be responsible for the selection and development of the import terminal and are working with Provaris to outline the capital and operating equipment to discharge the H2Neo carriers, which includes an assessment of optimal storage and connection to the European Hydrogen Backbone for distribution to industrial sectors. Simplicity of port infrastructure provides for the flexibility of nominating one or more entry ports.
The Term Sheet remains conditional upon, among others, the negotiation and execution of a fully termed Hydrogen SPA and obtaining all necessary approvals.
Illustration of the Regional Supply locations from the Nordic Region into North-West European ports with hydrogen import development plans linked to the future development of Germany’s core hydrogen network
Source: Provaris Energy
Click here for the full ASX Release
This article includes content from Provaris Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
EV Market Forecast: Top Trends for EVs in 2025
How did the EV market perform in 2024?
Global EV sales hit 13.3 million units in the first 10 months of 2024, according to EV market research firm Rho Motion, up 24 percent year-on-year. However, this rise didn't play out equally across the three major regional markets.
China continues to lead global EV sales
Once again China led the way, amassing nearly two-thirds of total global sales during the period.
Purchases of EVs in this region were up 38 percent in the first 10 months of the year to 8.4 million units. That's compared to 9 percent growth in the US and Canada, and a 3 percent decline in Europe.
China’s dominance in the global EV market is beginning to bleed into other markets.
Earlier this year, China’s BYD (OTC Pink:BYDDF,HKEX:1211), the world’s largest EV manufacturer, launched an affordable EV model priced below US$10,000. With North American and European EV manufacturers already struggling to gain market share in their own domestic spheres, these cheaper Chinese EV models pose a significant problem.
In response to this threat, the Biden administration increased tariffs on Chinese EVs to 100 percent in 2024, and disqualified imported EVs from a US$7,500 federal tax credit. The European Union also imposed its own tariffs on Chinese EVs, ranging from 17.4 percent for BYD to 38.1 percent for SAIC Motor Company (SHA:600104).
Global EV sales, 2017 to 2024.
Chart via BloombergNEF, MarkLines and Jato Dynamics.
US EV industry facing challenges
As the top seller of EVs in the US, Tesla’s (NASDAQ:TSLA) performance has an outsized impact on the region’s EV industry. Lagging sales of Tesla models in 2024 have dragged down the overall performance of the North American EV market.
According to data released by the Electric Vehicle Council in early December, the Elon Musk-led company's total sales for 2024 are down by 20.88 percent compared to the previous year.
Another red flag for the US EV industry is Ford’s (NYSE:F) decision in June to suspend the release of new battery electric vehicle (BEV) models — the company said at the time that there wasn't a strong enough business case for such an investment. The news came despite the fact that the auto giant was the second best-selling EV brand in the country in the first half of 2024, before it was overtaken by rival General Motors (NYSE:GM). In November, Ford announced it would pause production of its F-150 Lighting truck for the remainder of the year.
Meanwhile, General Motors has cut its planned 2024 EV production range to 200,000 to 250,000 units, a decrease of 50,000 units. The US auto manufacturer is also delaying the launch of the first Buick EV model.
Despite these challenges, the US EV market landscape has several bright spots.
Third quarter EV sales grew by 11 percent year-on-year, according to Cox Automotive. Even Tesla's sales returned to growth, rising 6.6 percent, while General Motors posted a 60 percent sales gain for the same period.
“The growth is being fueled in part by incentives and discounts; but as more affordable EVs enter the market and infrastructure improves, we can expect even greater adoption in the coming years,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive.
European EV market sluggish
The European market also struggled in 2024, especially in Germany, the largest producer of EVs in this region. The German government cut subsidies for EVs at the end of 2023, which has disincentivized buyers in 2024.
The German EV industry is the second largest in the world after China. A significant drop in demand in Germany has understandably had a dramatic impact on European EV production.
In October, Volkswagen (OTC Pink:VLKAF,FWB:VOW), the region’s largest automaker, announced its intention to close three German plants to cut costs as it tries to stave off competition from cheaper Chinese EVs.
Battery car registrations declined after incentives were removed last year.
Chart via Bloomberg and the European Automobile Manufacturers' Association.
Europe’s auto makers are facing growing challenges ahead of the approaching 2035 ban on the production of any new internal combustion engine vehicles. New EV registrations fell in the second half of the year, including in France and Italy, while the UK has seen some positive gains, as per Bloomberg.
What's slowing down EV demand?
One of the biggest challenges currently facing the EV industry is the problem of appealing to mainstream consumers, many of whom are dealing with high interest rates amid a cost-of-living crisis.
Depending on the geographic location and the vehicle type, BEVs are 10 percent to 75 percent more expensive than conventional internal combustion engine vehicles. This is making for less-than-appealing pitches on the sales floor.
Throw in the higher cost for tires, one-off repairs and the possibility of having to replace an exorbitantly priced battery, and it becomes clear why the hesitancy is palpable. Range anxiety, especially in colder climates, long charging times and a lack of reliable charging infrastructure are also significant barriers to EV adoption. But nothing trumps cost.
PwC recently polled over 17,000 consumers across 27 countries, and found that even in places like the Netherlands, which has advanced charging infrastructure, high costs are still deterring would-be buyers from going electric.
Overall, PwC found that 75 percent of respondents in Europe, the Middle East and Africa cited the cost of EV ownership as the biggest factor swaying their decision to purchase. On top of that, one-third of EV owners surveyed said they would consider going back to gas-powered vehicles to avoid high maintenance costs and limited range.
Subsidies and tax breaks have helped to ease the price burden, but pullbacks on these rebates have hit the market hard in some European countries where high interest rates and costs continue to put EV purchases out of reach.
Another factor stunting sales in the European Union, reported Euronews, has been higher tariffs imposed on low-cost Chinese EVs to limit their ability to displace domestic automakers from the market.
Despite the slowdown in adoption, 2024 is still expected to be another record year for the global EV industry.
That was the main takeaway from a presentation at the BloombergNEF Summit in November. Aleksandra O’Donovan, the research organization’s head of EVs, said the firm is forecasting that EV sales worldwide will reach 16.7 million units in 2024, up from 13.9 million the previous year, representing 20 percent of total global vehicle sales this year.
Hybrid EVs gaining market share
One of 2024's important EV market trends that is likely to carry on into 2025 is the popularity of hybrid models over wholly electric vehicles. This trend is very much in line with the affordability and range anxiety factors influencing sales.
To meet customers where they are at right now, auto makers are switching gears to bring more hybrid models to market, including plug-in hybrid electric vehicles (PHEVs).
“Companies are turning to hybrid models to appeal to a more practical and frugal shopper, as wealthy early EV adopters who fueled years of growth have recently fled the market,” notes Business Insider.
In this environment, hybrid-focused auto makers such as Toyota (NYSE:TM,TSE:7203) and Ford are expected to outperform. General Motors is also planning to launch more hybrid EV models in 2027.
Even in China, the world’s top EV market, plug-in hybrids are driving a large part of EV sales growth. BloombergNEF states that while BEV sales in China were up 18 percent in the first 10 months of the year, plug-in sales were up 37 percent.
Mexico emerging as an EV production hub
Outside of China, the US and Europe, EV sales are growing in emerging markets.
JD Power’s Autovista Group reported that in 2024, “Volumes grew by more than 100% in markets including Australia, Thailand, Brazil, Turkey, Malaysia, and Mexico in 2023 and more than 50% in India and Japan”.
Mexico, for example, is on its way to becoming a major EV production hub.
“We're already seeing EV production take off in Mexico over the past 12 to 18 months,” said Rho Motion research analyst George Whitcomb during a Benchmark-hosted webinar that INN attended in late November.
The growth in Mexico’s EV industry can be attributed to a number of factors, explained Whitcomb.
Those include its established transport production chains, geographic location, strong position in the traditional global auto industry and trade agreements. “But from an EV standpoint in particular, the US Inflation Reduction Act (IRA) has been central to stimulating EV production in Mexico,” he added.
What’s the EV market outlook for 2025?
EV Volumes is forecasting that the total EV share of light-vehicle sales worldwide will reach 22.6 percent in 2025. Further out, the firm sees the market share for EVs surging to 44.6 percent in 2030 and 69.5 percent in 2035.
Looking at the broader market (which includes buses, vans and heavy trucks), tech research firm Gartner predicts that by the end of 2025, 85 million EVs will be on the road, a year-on-year increase of 33 percent.
China to continue dominating the EV market
“The growth in 2025 will be driven primarily by higher EV sales in China (58%) and Europe (24%), which together are projected to represent 82% of total EVs in use worldwide,” states Jonathan Davenport, senior director analyst at Gartner.
In 2025, the firm estimates that 49 million EVs will be on Chinese roadways, compared to 20.6 million in Europe and 10.4 million in North America.
Gartner sees China continuing its domination of the global EV landscape for at least another decade. For its part, EV Volumes expects BEVs to “gain ground in the BEV-PHEV mix from 2025 onwards” in China as the government offers further financial supports to motivate consumers.
Europe’s EV market will cool before heating back up
Europe’s light-vehicle EV market will see a growth rate of 22.8 percent in 2025, according to EV Volumes, followed by a further 20.1 percent increase in 2026 and a 21.1 percent rise in 2027.
By 2030, the firm sees EVs accounting for 61 percent of the overall light-vehicle market in the region.
Government subsidies will continue to be a key factor shaping Europe’s EV industry for 2025, says Rho Motion. For example, the agency notes that France is set to follow Germany’s lead and make a 50 percent cut to its EV subsidies for 2025 as the government works to address fiscal challenges. Spain is also considering reducing subsidies.
However, Forbes reported that professional services firm Accenture has called the slower growth in Europe’s EV market “a temporary blip” as a recent consumer survey shows that “every other consumer in Europe plans to buy an EV in the next 10 years and every fifth consumer in the next 5 years.”
US EV market in the Trump era
EVs are projected to hit 13.5 percent market share for overall US light-vehicle sales in 2025, as per EV Volumes, up from an estimated 10.3 percent in 2024. That figure is expected to rise to 39.7 percent by 2030 and 71.8 percent in 2035.
Within the EV market itself, BEVs are still dominating over hybrid models and are expected to account for 82.4 percent of total US EV sales for 2025, up from 78.6 percent in 2024.
The IRA, brought forward by the Biden administration in mid-2022, introduced significant tax credits for EV buyers, helping to take the edge off the cost burden of buying into the clean technology. While the IRA is slated to run through 2032, there are concerns that President-elect Donald Trump may reverse those benefits once he takes office in 2025.
“The US market remains buoyant in part thanks to IRA funding for consumers switching to electric which may be at risk with the start of the Trump presidency,” said Rho Motion Data Manager Charles Lester.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.