Frontier Energy: Profitable Power Generation for the Energy Transition with CEO Sam Lee Mohan
Frontier Energy (ASX: FHE; OTCQB: FRHYF) is on track to become a profitable Australian energy producer. As the world continues to grapple with the current energy transition and as high electricity prices are forecasted over the next decade, Frontier Energy aims to capitalize on these undeniable trends.
Frontier’s strategy is to produce electricity from both solar energy and a peaking plant. The peaking plant will utilize both natural gas supplied via a pipeline and eventually green hydrogen. The green hydrogen will be produced onsite via electrolysis using Frontier Energy’s solar power during low-cost energy periods. The company has all key approvals, permits, and licenses in place to commence development on the project next year. The first cashflow is expected in 2025.
Frontier Energy’s competitive advantage is its existing critical infrastructure, agreements, and permits. Having these in place saves the company at minimum five years of waiting and hundreds of millions of dollars in capex. Frontier Energy already has a connection to the electrical grid with capacity of 1.1GW, access to a nearby natural gas pipeline, agreement to purchase water from a nearby pipeline, and landholdings sufficient for +1GW of solar coverage.
Listen to Frontier Energy CEO Sam Lee Mohan describe the company’s investment thesis in this MSE interview.
0:00 Introduction
1:34 Frontier Energy overview
4:33 Energy infrastructure projects implemented much quicker than mining projects
6:20 Profiting from the electrical “duck curve”
8:43 Peaking plant provides 24/7 baseload power & maximizes profits
10:06 Green hydrogen production
11:28 Readily available water saves hundreds of millions of capex
12:50 Peaking plant is internal offtake partner for green hydrogen
14:19 Three revenue streams
15:53 Expected revenue and valuation at a 15x P/E multiple
17:40 Expansion capability to 1.2GW (supplies electricity to 2.8mm homes)
18:53 Timeframe for construction
21:00 Permitted infrastructure projects are “more process rather than negotiation”
21:50 Treasury and upcoming catalysts
