Frontier Energy (OTCQB: FRHYF) has reached a critical milestone after locking-in a binding water supply agreement to underpin green hydrogen production at its Bristol Springs renewable energy project, in Western Australia’s South West.
Under the deal with Western Australian Government-owned Water Corporation, Frontier will be able to use up to 1,250 kilolitres of water a day at Bristol Springs.
Frontier managing director Sam Lee Mohan said the company was “delighted” to secure the critical agreement with the Water Corporation, which will provide more than enough water for stage one operations and beyond.
“Being located 3km from one of the major water pipelines in WA, yet again highlights the advantage this project has in being able to access existing infrastructure,” Mr Lee Mohan said.
“Without this, a desalination facility would be required, which would add millions to the project’s development cost, as well as add significantly to first production timeline, due to the requirement for additional approvals and environmental studies,” he added.
The contract with the Water Corporation will provide enough water to use in a 150MW electrolyser to produce green hydrogen.
In stage one, the electrolyser will only be 36.6MW, so the contract provides enough water for substantial expansion.
Frontier will secure the water via Stirling Trunk Main, which is the pipeline that runs from Southern Dams and the Southern Seawater Desalination Plant to the Integrated Water Supply Scheme (IWSS).
Stirling Trunk Main is about 3km from the proposed site of the hydrogen facility at Bristol Springs.
The contract is due to officially start at the end of 2024 and has an initial 15-year term.
The IWSS delivers about 303 billion litres of water annually across the state.
Low cost green hydrogen supplier
Frontier noted water source costs were in-line with the pre-feasibility study published for Bristol Springs in August last year.
Under stage one, Frontier proposes to develop a 114MW solar farm, which would power the 36.6MW alkaline electrolyser to generate about 4.4 million kilograms per annum of green hydrogen.
The pre-feasibility study estimates capital expenditure of $236.2 million to develop the farm and electrolyser. Inclusive of the capital outlay, the study assumes it will cost of $2.83 for each kilogram of hydrogen produced.
Bristol Springs is 120km south of Perth and Frontier’s strategy is to be an early mover and low cost renewable energy and green hydrogen producer.
“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,” Frontier executive chairman Grant Davey said.