Frontier Energy Ltd (ASX:FHE, OTCQB:FRHYF) has wrapped up a definitive feasibility study (DFS) for stage one of its Bristol Springs Renewable Energy Project, some 120 kilometres from Perth in Western Australia.
The DFS confirms the company as one of Australia’s lowest-cost, near-term, early-mover green hydrogen producers and reaffirms the potential for the project to be a leader in the Australian low-carbon hydrogen industry.
“We are delighted with the outcome of the study as it again highlighted the unique opportunity we have at Bristol Springs to be a first mover in the green hydrogen industry,” said managing director Sam Lee Mohan.
Close to infrastructure
“The infrastructure surrounding the project not only allows for our forecast costs to be some of the lowest in Australia for green hydrogen production but also provides an opportunity for early production as the industry continues to mature over time.”
The low cost is driven by two major factors:
- low capital costs due to the project’s proximity to surrounding existing infrastructure; and
- the ability to use existing mechanisms for solar revenue – classified as a negative expense in the study – that can only be accessed through the project’s connection to the South West Interconnected System (SWIS).
The DFS projected that Bristol Springs will be able to produce green hydrogen at 4.9 million kilograms per year – compared with the pre-feasibility study (PFS) levels of 4.4 million – at a total cost of A$2.77 per kilogram, inclusive of capital costs.
The increased forecast production is due to increasing the load factor of the electrolyser to 84% (compared with the PFS factor of 75%). The increased load factor is due to increased use of the grid connection in off-peak electricity conditions.
This is one of the lowest reported costs for a green hydrogen project of this scale in Australia.
The total initial capital cost for Stage One of the project is estimated at A$242.5 million, inclusive of the 114MW solar farm and the 36MW alkaline electrolyser.
FHE’s long-term plan is to produce at least 1 gigawatt of renewable energy in the Waroona region, which would be sufficient to produce around 80 million kilograms of green hydrogen per year.
Offtake discussions ahead of FID
Frontier is in the advanced discussions to secure a foundation offtake customer to commercialise Stage One.
Following this milestone, the company hopes to progress project financing to enable a final investment decision (FID).
“We believe the most likely pathways to early production will come from hard-to-abate sectors through accessing the nearby Dampier to Bunbury Natural Gas Pipeline, which can already take up to 9% hydrogen, as well as the potential for the development of a peaking plant, which uses hydrogen for flexible energy generation to meet high demand periods on the WA electricity grid,” Mohan continued.
“Both of these potential early pathways to production are in line with the West Australian government’s strategy and targets for the production and consumption of green hydrogen within the state.”