Canada’s renewable energy industry has been truly taking off in the past three years - where do you see Potential Renewables positioned moving forward?
Canada is entering a very exciting period indeed and our plan is to remain at the forefront of Canada’s renewable energy industry. Potentia has solar installations on more than 750 commercial and institutional rooftops which, while a lot, together only amounts to 150 MW of capacity. Over the past 6 years we have grown more through utility scale projects in solar, but especially in wind where we have worked hard to grow a large portfolio with significant capital being deployed in wind in western Canada. With the opportunity for renewables in Canada and the US, we are largely focused on these two markets and plan to continue to deploy capital into utility-scale renewables.
How welcoming would you say the financing climate is currently for green energy development in Canada?
Our parent company Power Corporation is publicly listed, and is well known by lenders in North America, so we benefit from those relationships. But even without that warm introduction, the financing climate here is very stable and welcoming for this sector, and there is lots of capital looking to invest in these types of projects. Historically, Canadian projects have usually benefited from offtake agreements with government-backed utilities, so lenders are used to a certain type of project risk profile. As the sector matures and non-traditional offtakers are increasingly involved, often for shorter periods of time, projects are getting more complicated for lenders, particularly in markets like Alberta, but even so the process flows well.
What significance does winning the bid for the Nova Scotia Rate Procurement Process have for Potentia?
We currently own and operate 33 MW of wind in Nova Scotia, and see the success of our 66 MW Ellershouse 3 project as building on this base. We see Nova Scotia as a significant growth market as they have ambitious goals for decarbonization. We are also excited because Ellershouse 3 is co-owned with the Annapolis Valley First Nation, and we are excited to work with them to grow the local economy while reducing emissions. The recent procurement is the start of significant growth for renewables in the region and we are very happy to continue to be a part of it.
Looking for a moment South of the border, do you expect the Inflation Reduction Act to impact your operations?
We have been very successful in Canada so far and that success has captured most of our attention, however we are certainly not ignoring the U.S. We currently have operating projects in Montana and Minnesota along with a small US development pipeline. But yes, the IRA will add more momentum to an industry that was already growing fast. I’m always struck that – when compared to Canada – while the American renewable energy sector has so much competition, there are also so many opportunities that there is room for many people to succeed.
We do expect the IRA to have a knock-on effect on Canada, particularly in terms of wind- and solar-energy supply chains, where high demand south of the border has the potential to reduce supply for Canada or to increase lead times.
In order for Canada to reach its net zero ambitions by 2050 green energy needs to scale up massively; what are the main hurdles that need to be overcome in order to achieve this?
Canada is so jurisdictional, with each Province managing energy within its own borders, and each dealing with their own unique challenges. Manitoba, for example, often has an oversupply of hydropower, but can’t easily export that power to their neighbors who are seeking clean power. Without a federal or cross-jurisdictional regulator to approve and push transmission development, it isn’t entirely clear who is leading efforts to increase inter-ties. Canada needs to strengthen both interprovincial and international grid connections to allow for efficient deployment of renewables across the country, creating a flow between the different Provinces and allowing each to play to their strengths. Then there is just the issue of meeting demand. Like many Provinces with increasing demand, Ontario needs a great deal of energy generation in a short amount of time, which is a tall order even if you weren’t also trying to reach carbon reduction goals. Gaining public acceptance and permits for such a rapid build will be a struggle in any Province, but especially in Ontario where there is a history of organized opposition to renewable energy developments.
What are your main milestones for Potentia in the coming few years?
We have been fortunate to be very successful with our Canadian pipeline, so the team is now focused on finishing construction of those projects and getting them into operation. I am excited about working with our team to restock our pipeline, and identify new sites and new markets for us to continue doing what we do best. We are also monitoring the development of new technologies and plan to leverage our relationship with operators and offtakers to allow us to continue to cost-effectively meet the needs of system operators and offtakers
