Company Interview / Major milestone for Frontier with $160M revenue locked-in

Adam Kiley of Frontier Energy highlights the significance of the Australian Energy Market Operator assigning 288 capacity credits for Stage One of the Waroona project (ASX:FHE). He sees the reserve capacity mechanism—unique to Western Australia—as a critical foundation, ensuring $160 million of guaranteed revenue over five years, which supports debt financing opportunities. Kiley states that locking in this revenue without selling a single megawatt to the grid provides the security needed to advance project funding and development strategies.

Stage One is set to comprise a 120MW solar farm with an 81.5MW battery, expected to generate an EBITDA of around $57 million per annum and an all-equity IRR of about 15%. As only part of their 830-hectare site is being used for this initial phase, Kiley points out their opportunity for swift expansion without additional land acquisition. Strong grid connections already in place further simplify growth, with another connection under application to support Stage Two.

Looking ahead, Kiley expresses confidence in meeting the October 2027 deadline to supply power as coal-fired plants retire in Western Australia. He notes the advantage of Frontier Energy’s grid position, established infrastructure, and ongoing strategic equity discussions, providing flexibility to finalise financing and scale the project further.