Thrifty Banker
  • Politics
  • Business
  • World
  • Investing
  • Politics
  • Business
  • World
  • Investing

Thrifty Banker

Investing

Definitive Feasibility Study Confirms Strong Financial Returns, Rapid Payback for Waroona Renewable Energy Project

by February 28, 2024
February 28, 2024
Definitive Feasibility Study Confirms Strong Financial Returns, Rapid Payback for Waroona Renewable Energy Project

Frontier Energy Limited (ASX: FHE; OTCQB: FRHYF) (Frontier or the Company) is pleased to announce completion of a Definitive Feasibility Study (DFS or Study) for Stage One of its Waroona Renewable Energy Project in WA, comprising a 120MWdc solar facility and an integrated four-hour 80MW battery (the Project).

HIGHLIGHTS

Study confirms the Project as a long life, low operating cost and highly profitable renewable energy project. The Project is now advancing towards a Final Investment Decision (FID)Project generates average EBITDA1 of $68 million pa over first five years of production and $63m pa over first 10 years of productionAurora Energy Research provided independent revenue forecasts for the ProjectPost-tax payback1 of 5.8 years (4.6 years pre-tax) based on $304m total initial capital costLeveraged2 post-tax Internal Rate of Return (IRR) is 21.6%1 and pre-tax IRR of 27.3%1. 100% equity financed post-tax IRR is 14.8%1 and the pre-tax IRR is 18.0%1Frontier expects to earn a highly leveraged return, based on the Company’s financing strategy and initial debt market soundingsFirst year solar energy generation forecast at 258GWh3, with 119GWh discharged/sold through the battery (in peak periods) and 115GWh discharged from direct solar generation (daytime market) into the WA Wholesale Electricity Market (WEM)The average energy price forecast over the life of the operation is $143/MWh4 (peak periods) and $80MWh4 (solar price), in line with 2023 actual prices on the WEMStage One utilises only a third of Frontier’s 868ha landholding and represents a fraction of total long-term potential generation the Project can unlockBarrenjoey appointed as Corporate Advisor to assess strategic partnerships for Stage One development and future expansion opportunitiesThe Company received multiple unsolicited approaches over the past year from a range of multi-nationals, global renewable energy producers and industrial firms expressing interest in the ProjectDebt financing discussions commenced; Frontier expects indicative terms during 2Q24

CEO Adam Kiley commented:“Our Stage One DFS delivers an excellent result and highlights Frontier’s fantastic and unique opportunity to be a near-term major renewable energy producer in Western Australia.

This comes at a time when energy demand continues to outpace supply in WA, resulting in electricity prices reaching record highs. Just last week, record peak demand on the South West Interconnected System was surpassed once again, with the top six operational demand peaks ever recorded in the state’s main grid all happening between January 31 and Feb 19 this year. Unfortunately, the majority of the energy to meet this record demand peak came from carbon emitting sources, with 58% being gas and 32% being coal generated. This highlights the urgent requirement for renewable energy storage solutions, such as our 100% renewable energy Waroona solar/battery project, to quickly come online.

Highlights of the Study include exceptionally strong financial returns under all key metrics, including forecast EBITDA averaging $68m per annum over the first five years of production. 5

These strong returns drive a rapid post tax payback of 5.8 years, or 19% of the project life of 30 years. A major contributor to this is the Reserve Capacity Payment, a feature unique to WA, which is forecast to provide revenue of about $28m per annum during the first five years of production.

We aim to now move rapidly towards a Final Investment Decision by mid-2024. Central to this is finalising our funding strategy. Debt financing work is well underway – we have NDAs signed with multiple banks and an Information Memorandum and data room ready for banks shortly.

We have also appointed Barrenjoey, a leader in renewable energy transactions in Australia, as Corporate Advisor to assess strategic development partnerships. This follows multiple unsolicited approaches over the past year from a range of multi-nationals, global renewable energy producers and industrial firms expressing interest in the Project.

The Company will assess the merits of a strategic partner, in association with debt financing, as we aim to minimise dilution. We also believe the right partner will help accelerate our future expansion opportunities, given Stage One is only about 10% of the total long-term potential generation the Project can unlock.’


Click here for the full ASX Release

This post appeared first on investingnews.com
0
FacebookTwitterGoogle +Pinterest
previous post
‘Iwájú’: Nigeria-based ‘first-of-its-kind’ animated series premieres on Disney+
next post
Energy Fuels Announces 2023 Results: Record Net Income and Earnings per Share, Uranium Production Ramp-Up, and Near-Term Production of Separated Rare Earth Elements

Related Posts

JZR Gold Enters into Loan Agreement

February 12, 2025

TomaGold provide further details on recent announcement to...

September 20, 2023

China’s Electric Vehicle Growth Paves Way for Battery-grade...

October 24, 2023

Positive Exploration Results at Havelock and Lucky Strike

May 23, 2024

Vizsla Copper Completes Acquisition of Universal Copper

April 19, 2024

Skyharbour Resources

August 12, 2023

Zinc Price 2023 Year-End Review

January 10, 2024

Can You Invest in Elon Musk’s Neuralink? (Updated...

June 6, 2024

Bitcoin Well Provides Preliminary Year End Update and...

February 22, 2024

Marvel JV Partner Receives Assays at Golden Brook...

September 13, 2023

    Sign up for our newsletter to receive the latest insights, updates, and exclusive content straight to your inbox! Whether it's industry news, expert advice, or inspiring stories, we bring you valuable information that you won't find anywhere else. Stay connected with us!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Popular

    • 1

      Top 10 Countries for Natural Gas Production (Updated 2024)

      April 6, 2024
    • 2

      Understanding Lithium Mineralogy from an Investment Perspective

      September 12, 2023
    • 3

      US Capital Global Facilitates $50MM Financing to Accelerate Charbone Hydrogen’s North American Expansion

      June 6, 2025
    • 4

      Israel confirms it is arming Hamas rivals in operation opposition calls ‘complete madness’

      June 6, 2025
    • 5

      A GOP operative accused a monastery of voter fraud. Nuns fought back.

      January 3, 2025
    • 6

      Crypto Market Recap: Strategy Eyes US$1B Raise for Bitcoin Push, UK Regulator Reverses ETN Ban

      June 6, 2025
    • 7

      China’s aircraft carriers send message in the open Pacific for the first time – and bigger and more powerful ships are coming

      June 16, 2025

    Categories

    • Business (1,053)
    • Investing (2,079)
    • Politics (2,977)
    • Uncategorized (20)
    • World (3,387)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: thriftybanker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thriftybanker.com | All Rights Reserved