Boralex building, and about to build, several power projects in Canada

Boralex Inc. (TSX: BLX) said in its May 11 earnings report covering the first quarter of this year that it is about to begin construction on new wind farms in Ontario and British Columbia.

  • Construction on the 10-MW Port Ryerse project with a 20-year contract with the Ontario IESO will begin during the second quarter of 2016. Its construction will require investments of approximately C$38 million and Boralex estimates its annual EBITDA at about C$3.5 million. Commissioning is slated for the fourth quarter of 2016.
  • Construction on the 15-MW Moose Lake project with a 40-year contract with BC Hydro will begin during the third quarter of 2016. Its construction will require investments of approximately C$70 million and Boralex estimates its annual EBITDA at about C$5.0 million. Commissioning is slated for the end of 2017.

Fiscal 2016 will see solid growth in Boralex’s wind power segment operating results, Boralex said. This growth will come largely from the full contribution of wind farms totalling 146 MW which began operations in 2015, of which 113 MW were commissioned in the fourth quarter. In addition, although they will only make a partial contribution to 2016 results, three other wind farms totalling 36 MW will also be commissioned during 2016, namely Touvent (in France), Plateau de Savernat (France) and Port Ryerse.

Subject to the achievement of certain conditions, Boralex could also get a 25% economic interest in the 230-MW Niagara Region Wind Farm project in Ontario. Located in the Regional Municipality of Niagara, this wind power project is to be commissioned toward the end of 2016. Boralex agreed to pay Enercon, the majority owner of this project, an initial deposit of C$5 million to acquire an option for this 25% stake. The total investment planned for this major undertaking ranges from V$900 million to C$950 million. Under its partnership agreement with Enercon, Boralex is responsible for the coordination of project construction, which began in June 2015, and the operation and management of the future site following the exercise of the option. Management estimates the equity contribution required for this project following the exercise of the option at C$60 million.

Boralex is working on a number of other development projects that will require significant investments and financing arrangements in 2016. These include:

  • In April 2015, Boralex started building its first hydroelectric power station in Ontario, namely the 16-MW Yellow Falls power station, which is expected to be commissioned in the first quarter of 2017. Project financing is underway.
  • Boralex currently has a project under development – the 15-MW Moose Lake wind power project in British Columbia covered by a 40-year contract with BC Hydro – which is slated for commissioning during the fourth quarter of 2017. It estimates the total required investment at about C$70 million.
  • On March 10, 2016, in connection with a request for proposals process in Ontario, Boralex and its partner, Renewable Energy Systems Canada Inc. (RES), announced that they had been awarded an LRP I Contract for their 19-MW Otter Creek Wind Farm project. The project is slated for commissioning by the end of 2019. A total investment of about C$138 million is slated for this project. In Ontario, Boralex said it intends to participate in the next LRP II request for proposals for the acquisition of 930 MW of renewable energy by the provincial IESO.

In 2016, Boralex said it will continue the work at its Buckingham power station in Québec to comply with the Dam Safety Act. Building on C$2.8 million and C$5 million investments in 2014 and 2015, respectively, it expects to invest approximately C$5 million in 2016. Concurrently with this work, Boralex plans to invest additional amounts to expand the power station’s installed capacity by up to 10 MW to a total of approximately 20 MW.

Boralex has also submitted sales contract renewal requests to Hydro-Québec for two of its hydroelectric power stations in Québec, namely the Beauport and Forestville stations. Unable to reach an agreement on a rate for the renewal period, Boralex has begun arbitration proceedings to resolve this issue. Given that some producers have already entered into similar proceedings, Boralex and Hydro-Québec have agreed to suspend their proceedings until a final decision is reached in the other cases.

In October 2015, Boralex commissioned the 0.4-MW Vaughan solar project in Ontario, consisting of solar rooftop panels, covered by a 20-year energy sales contract with the IESO. While marginal in terms of installed capacity and expected returns, this project represents Boralex’s first foray into Canada’s solar power market. The company added: “Solar power generation is a growth industry with market rules and government positions to be worked out in the years to come. Boralex believes this clean and abundant source of renewable energy has potential, particularly as technological breakthroughs gradually push down equipment costs, thereby making solar power a more competitive energy alternative.”

Boralex develops, builds and operates renewable energy power facilities in Canada, France and the United States. A leader in the Canadian market and France’s largest independent producer of onshore wind power, it is recognized for its solid experience in optimizing its asset base in four power generation types — wind, hydroelectric, thermal and solar.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.