Renewable Firm Boralex to Invest $5 Billion to Double Output

Patrick Decostre, president and chief executive officer of Boralex Inc., during the Bloomberg Canadian Finance Conference in New York, US, on Wednesday, Nov, 29, 2023. The conference brings together finance, government and business leaders from across various sectors to discuss advancements in their fields and how they are sustaining their leadership going forward. Photo by Bing Guan /Bloomberg

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(Bloomberg) — Canadian renewable power firm Boralex Inc. plans to invest as much as C$6.8 billion ($5 billion) to more than double its production output even as it takes a more cautious stance in the US.

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Chief Executive Officer Patrick Decostre said the Montreal-based company will boost its installed capacity from 3.2 gigawatts currently to about 7 gigawatts by 2030. The increase will be driven by solar and wind power, as well as battery storage projects in Canada, France, the UK and the US. The firm expects to spend another C$1.2 billion after 2030 to reach 8 gigawatts.

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All of the forecasted growth is organic, though “it doesn’t mean that there will be no acquisition,” Decostre said. Equity issuance to finance the expansion will be minimal at C$500 million, he said: “It’s a plan that will not be dilutive for shareholders.”

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Decostre said there are many opportunities in Canada, with Hydro-Quebec planning to spend C$185 billion to triple wind power and increase power capacity over the next 10 years. Additionally, he expects two requests for proposals in Ontario in 2025.

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Those opportunities could offset a more volatile market in the US, he said, amid President Donald Trump’s prioritization of fossil fuels. “Are we totally confident to continue to invest like we were in 2021? The answer is no. We will be more cautious and targeted specifically to New York, Illinois and Pennsylvania.”

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Boralex announced on May 21 major contracts with the New York State Energy Research & Development Authority for two solar projects totaling 450 megawatts. Currently, the US market represents about 22% of the firm’s power capacity.

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Decostre said he was confident that Trump’s tax and spending bill, now under review by the US Senate, will allow firms like Boralex to “benefit from the framework of today, and not the framework in three or four years.”

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“With respect to Boralex, we believe management should be able to fully qualify their 450 MW of New York solar developments for tax credits if they ‘start construction’ this year,” Royal Bank of Canada analyst Nelson Ng wrote in a note to clients.

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Solar remains the cheapest and fastest source of electricity for US grids, asset manager Lazard Inc. said in a report released Monday.

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In February, the Caisse de Depot et Placement du Quebec agreed to take private Innergex Renewable Energy Inc., Boralex’s biggest rival, in a C$10 billion transaction, including debt. “It shows that the value of the listed renewable companies are depreciated today when you look to this deal,” Decostre said.

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Boralex’s shares are up by about 15% in Toronto since the beginning of the year, with a market capitalization of C$3.4 billion.

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