Frontier Energy Ltd (ASX:FHE) has positively assessed the hydrogen potential of its WA-based Bristol Springs green energy project in Western Australia through a pre-feasibility study (PFS).
The study considers a move into green hydrogen production, powered by the company’s stage one 114-megawatt solar farm, which is expected to produce around 4.4 million kilograms of green hydrogen every year.
Show me the money
While Bristol Springs’ output could be hefty, the price tag is not — every kilogram of green hydrogen produced is expected to set Frontier back $2.83, inclusive of capital costs.
Based on publicly available data, this is expected to place the project as one of the lowest-cost producers of green hydrogen in Australia.
So, why are the costs coming in low? For Frontier, it’s all about location.
For one, Bristol Springs is already connected to some critical infrastructure, including the Landwehr Terminal, which means excess solar renewable energy can be sold to WA’s main energy grid.
There are also several established water sources in the area, meaning there is no requirement for capital-intensive infrastructure like desalination.
One of the bigger upfront costs will be the stage one solar farm, which is estimated to cost $166 million to get off the ground.
A full breakdown of the budget is tabled below:
Meanwhile, Bristol Springs Hydrogen facility should cost just shy of $70 million to set up. Full costs are broken down below:
All things considered, Frontier has kicked off early-stage financing discussions and has been advised that traditional debt providers could provide between 60% and 80% of debt financing.
However, given the project’s green energy potential, the company believes that other stakeholders could come to the fore, such as the Clean Energy Finance Corporation, the Australian Renewable Energy Agency and the WA Government.
Could be “an Aussie leader in green hydrogen”
Speaking to the PFS findings, Frontier executive chairman Grant Davey said: “Green hydrogen is a unique opportunity to store, move and distribute renewable energy and is set to play a huge role in helping humanity decarbonise the energy we need.
“The Frontier Energy green hydrogen project is strategically located with suitable land, abundant water, SWIS access, gas pipeline access and transport infrastructure so as to be an Australian leader in ensuring that green hydrogen production and distribution becomes a near term reality.”