Frontier boosts project economics for Waroona with increased battery time and revenue

Frontier Energy Ltd (ASX:FHE) – which is developing an integrated solar and hydrogen production facility at Waroona in Western Australia – has achieved a 12 percent increase in its battery duration which is set to increase the project’s revenue compared to what was anticipated through the definitive feasibility study (DFS).

Battery duration is now set at 4.5 hours, up from 4 hours as reported in the DFS which was completed in February for the Waroona project: which comprises a 120 megawatt (MW) solar facility and integrated four-hour 80MW battery.

This improvement will increase the project’s revenue, since more energy can be sold during peak electricity price periods, whilst Reserve Capacity Payments (RCP) will also be higher than initially forecast.

At the same time, Frontier reported that the battery’s capital cost had fallen by approximately 5 percent compared to the DFS, with the latter estimated at $118.5 million.

CEO Adam Kiley said the news indicated that the Waroona project was in impressive territory economically speaking.

“The Company is in the fortunate position that the cost of the two largest capital items, solar panels and battery, have fallen significantly since the release of the DFS in February,” he said.

“Battery prices have fallen due to a combination of factors, including falling raw materials
prices, improvement in supply chain, and reportedly weaker than anticipated demand,
resulting in an ample supply of batteries in the current market.

“This unique situation is to Frontier’s advantage, with improved battery capacity resulting in
increased duration (approximately 4.5 hours compared to 4 hours in the DFS), increasing
Project revenue while at the same time achieving a lower capital cost.

“The Company continues to progress its funding strategy, with both debt financing and
strategic partnering processes well advanced.”

Frontier has been trading at 47 cents.