Frontier Energy Ltd (ASX:FHE) has secured exclusive options to increase its landholding at the Bristol Springs Solar (BSS) Project in Western Australia’s southwest.
The company is poised to add another 651 hectares to its land package, giving it further ground to advance its long-term objectives.
If FHE exercises the land options, its total acreage would more than quadruple, bolstering its forecast solar production capacity from the current 114 megawatts of DC power.
Down the line, Frontier plans to produce more than 500 megawatts of solar energy to power its green hydrogen strategy.
Potential to reduce short-term capital costs
Frontier Energy executive chairman Grant Davey said: “Securing this land is strategically important to our Western Australian green energy strategy and testament to our team working hard to secure this land in the interest of scale for this green energy project.
“In the short term, securing this ground has the potential to reduce the capital costs for the stage one development, as we will be able to have a more direct access route to Landwehr Terminal and other associated infrastructure.
“Owning the land also allows for accelerated development, as it eliminates the significant ‘red tape’ that can traditionally be experienced if the ground was leased either through third parties or the government.
“More importantly, in the long term, by securing this ground we now have clear sight in increasing our energy production to approximately 500 megawatts of green energy that can be used to power our green hydrogen production as well as provide green energy onto the energy grid.”
Scaling up
When Frontier released its prospectus at the start of this year, the company noted there were opportunities to scale up the BSS project and its solar capacity.
Fast forward to today, amid a notable shift in long-term demand for renewable energy, Frontier feels now is the time to stake new ground.
In addition to support at the state level, Frontier said the recent change of government at a federal level had also garnered greater support for increased renewable energy.
There are also proposed changes to legislation, which will see Australia’s target emissions reduce by 43% below 2005 levels by 2030 and achieve net-zero by 2050.
Within this context, Frontier has been advancing a hydrogen study and expansion study (which includes the land covered by the land options) to support the company’s move to control a greater land area surrounding the BSS Project.
All in all, Frontier believes adding to its tenure:
- supports expansion and growth opportunities;
- limits access for competitors;
- achieves scale, thereby lowering production costs; and
- reduces capex costs associated with the connection to Landwehr Terminal.
The fine print
Frontier’s land options comprise eight individual properties, as detailed below:
To this end, the company is reviewing a number of funding options, including sale and leaseback type arrangements.
This means a property fund can acquire the area under the land options, and the company enters a long-term lease with the property fund with the option to acquire the property, as well as debt and equity funding structures.
So far, Frontier has held discussions with a number of property funds that have expressed interest in acquiring the land.
The company also disposed of Athena Resources shares in June 2022, materialising $250,000 in proceeds, which are being used to fund the option fee payments.
Frontier will continue to review and assess other land opportunities and keep the market updated on its next steps.