Frontier Energy (FHE) Investor Presentation summary

Project overview and market context

• Waroona Renewable Energy Project aims to deliver near-term renewable energy in Western Australia, targeting industrial demand and grid stability with a 120MW solar and 80MW (380MWh) battery facility, development-ready and strategically located near major loads.

• Western Australia's Wholesale Electricity Market (WEM) is experiencing strong demand growth, rising prices, and a transition away from coal, with renewables now comprising 39% of the energy mix.

• Electricity prices have surged by 61% on average and 107% during afternoon peaks over three years, driven by increased demand, limited new supply, and higher input costs.

• The project is positioned to benefit from a market with only a few listed pure-play renewables, most of which have been acquired at significant premiums.

Project details and financials

• Stage One is fully permitted, with commercial operation targeted for late 2027, and land holdings sufficient for over 400MW of solar generation and future expansion.

• The integrated solar and battery system is designed to maximize arbitrage opportunities, minimize curtailment, and provide flexibility in energy sales across peak and off-peak periods.

• DFS confirms a 30-year project life, $282m capex, $65m average annual revenue, $58m EBITDA, $243m NPV (7%), 15.4% IRR, and a 6.1-year post-tax payback.

• Multiple revenue streams include direct solar sales, battery sales, reserve capacity payments, and carbon credits, with the WA market offering unique capacity market incentives.

• Benchmark Reserve Capacity Price (BRCP) is set to rise to $360,700/MW in 2027/28, with new rules introducing a price floor to enhance project bankability.

Capital structure and funding

• Market capitalization stands at $67m with $14m cash and 515m shares on issue as of December 2024.

• Ownership is split among retail (24%), management (13%), institutions (13%), and high-net-worth investors (50%).

• Multiple financing streams are being pursued in parallel, including commercial banks, equipment finance, private credit, bonds, and strategic equity investors.

• Funding strategy aims to optimize shareholder returns and leverage firm revenue streams and government programs.