Energy

Frontier Energy poised to become one of Australia’s lowest cost green hydrogen producers

Thu 04 Aug 22, 10:08am (AEST)
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Key Points

  • Pre-feasibility study indicates Frontier’s Bristol Springs Project could produce 4.4 million kg of green hydrogen
  • Estimated cost per kilogram of only $2.83, driven by the Project’s proximity to major existing infrastructure
  • Study underscores Frontier's potential to become one of the lowest cost green hydrogen producers in Australia

A pre-feasibility study (PFS) on Frontier Energy’s (ASX:FHE) Bristol Springs Project in Western Australia has highlighted the company’s potential to be an early-mover, low-cost green hydrogen producer.

The Xodus led PFS shows Stage 1 capacity of the solar farm would be enough to produce over four million kilograms of green hydrogen gas each year, as well as producing 113,000 megawatt hours of excess electricity for sale into the WA domestic market. 

The low-cost hydrogen production of $2.83/kg is largely driven by the Project’s location, utilising major existing infrastructure surrounding the project. The infrastructure allows connecting into WA’s main energy grid, called SWIS, and selling excess solar energy to ensure pre-production operations remain sustainable. 

To add some perspective, green hydrogen produced with renewable resources costs between $3/kg to $6.55/kg according to S&P Global Platts. Whereas fossil-based hydrogen costs about $1.8/kg.

The solar farm will eventually be able to power up a 36.6MW electrolyser. 

Earlier this week, Frontier boosted its WA landholdings by over 330% in the Peel region as it prepares to commence construction on stage 1 of its Bristol Springs solar farm in 2023. 

Forecasted solar power generation on a monthly basis (Bristol Springs)
Forecasted solar power generation on a monthly basis (Bristol Springs)

Xodus study key catalyst 

As Frontier today publishes the roadmap for its plans to produce green hydrogen, another report to expand renewable capacity of operations is also pending. The latter document will be released later this month.

Frontier notes multiple initiatives from the WA state government currently support private sector participation in the existing renewable power market, and, the state's emerging hydrogen market. 

The company expects Federal and state-level grants to support the evolution of the Bristol Springs project. 

What is Green Hydrogen? 

You might have heard a lot about Green Hydrogen, but investors could be forgiven for lacking a solid and absolute understanding of what exactly differentiates ‘Green Hydrogen’ from any other type.

Green Hydrogen simply refers to hydrogen produced using electricity generated from renewable sources. To produce hydrogen one must enter water through an electrolyser, a machine which ultimately splits water atoms to produce hydrogen gas.

The ‘green’ part of the Green Hydrogen namesake refers, of course, to the renewable power needed to electrolyse water feedstock. Water is crucial to the production of green hydrogen, with most industrial proponents citing a balance of 9-10L of water to produce 1kg of Hydrogen.

Frontier, investors should note, has access to a lot of it. 

Frontier's three month charts reveal an upward swing in interest commencing mid-July. One year returns currently reflect 122%
Frontier's three month charts reveal an upward swing in interest commencing mid-July. One year returns currently reflect 122%
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Frontier was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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