The Company continues to pursue the development of its portfolio of prospective hydro, wind, and solar projects, and it adapts to the changes in supply and demand for electricity.
In Ontario, the procurement of new installed capacity in renewable energy today is based on a competitive procurement process that takes into account local needs and considerations, including those of municipalities and First Nations. The government’s Long-Term Energy Plan is targeting 300 MW of new wind energy and 140 MW of new solar energy capacity in 2015, for which a request for proposals is currently underway, plus another 300 MW of wind energy and 150 MW of solar energy in 2016, with planned annual revisions thereafter. Innergex has a number of wind and solar projects that it continues to advance in order to submit them under these requests for proposals. Other prospective projects in Ontario, especially in the wind sector, remain predicated on transmission grid expansion in the northern part of the province and represent more long-term growth potential.
In British Columbia, BC Hydro’s Integrated Resource Plan calls for “a set of actions that will support a healthy, diverse clean energy sector and promote clean energy opportunities for First Nations,” but provides no specific procurement targets for renewable energy at this time. Furthermore, the province is forecasting increasing demand for electricity and has significant plans to develop its mining and liquefied natural gas (LNG) sectors. However, last December the government announced its approval of BC Hydro’s 1,100 MW Site C hydroelectric dam project, which may reduce short- and medium-term growth prospects for independent power producers. Innergex hopes to capitalize on its strong industry presence, its positive track record with local communities and First Nations, and its expertise in both hydroelectric and wind energy as it continues to advance the development of a number of prospective projects in this province, notably through partnerships and negotiated power purchase agreements.
In Quebec, Hydro-Québec Distribution completed the request for proposals it announced in December 2013 for the procurement of 450 MW of new wind energy, including 300 MW for projects in the Lower St. Lawrence and Gaspésie regions and 150 MW for projects anywhere in the province. In total, 54 bids totalling 6,627 MW were submitted in November 2014 under this very competitive request for proposals. Innergex submitted five projects totalling 813 MW, and to this day remains convinced that it presented the best possible bids based on its experience in developing wind projects in the Gaspé Peninsula, which bids were entirely cost competitive. Unfortunately, the Company’s projects were not awarded any contracts. One of its projects has been placed on reserve. Furthermore, the prices of this request for proposals demonstrate the competitiveness of renewable energy in Quebec and everywhere else, even in the context of weak fossil energy prices.
In the context of its strategic planning, the Company has reiterated its commitment to remain exclusively in renewable energy. It will continue to develop its portfolio of prospective hydroelectric, wind, and solar projects in Canada and will seek to consolidate its leadership position in this country’s renewable energy sector. In addition, the Company will leverage its project development and financing know-how, its capacity to create fruitful and lasting partnerships, and its ability to make value-added acquisitions to penetrate new target markets internationally, in order to replenish its growth prospects. In developing economies in Latin America, demand for electricity remains strong and governments are seeking to increase the supply of renewable energy, for which they have ample resources. More economically mature countries in Europe have adopted ambitious GHG emissions reduction targets, and governments are seeking to reduce their dependency on conventional forms of generation, both of which developments require a greater proportion of renewable energy in these countries’ energy portfolios. There are a number of markets to which the Company can transpose its business model.