Q4 2020 Boralex Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to Boralex, Inc. Fourth quarter 2020 of results conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session I ask a question during the session I read the press star one on the telephone.
It's the advice of today's conference is being recorded.
For any further assistance please press star zero on the telecom.
I'd now like to hand, the conference over to you for a speaker today, the five Neal senior director of Investor Relations. Thank you. Please go ahead, Sir when other things, Jeff, Let's see that's I'll touch on say, a b Anthony and I Couldnt.
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Well, thank you operator, and a good morning gave a long so it will come to bought ex fourth quarter and year end results conference call for <unk>.
Joining me on the line today are Patrick <unk>, our President and Chief Executive Officer.
They'll get them at a thorough vice president and Chief Financial Officer, and other members of our management and finance teams.
So most of the DUC us will begin with comments about the highlights of the quarter and a year afterwards, Mr. Guilmette will carry on with the financial a lights and then will be available to answer your questions. So as you know a during this call we will discuss a historical as well a lot forward looking information when talking about the future. There are very a T. A risk factors that have been.
The list it in a different filings with securities regulators, which can materially change our estimated results for these documents are all available for consultation at SEDAR Dot com.
GAAP presentation document the disclosed the results are presented both on the Ifr S and of the combined basis, unless otherwise stated all comments made in this presentation will refer to combined basis figures.
The press release the M D N a the consolidated financial statements.
A copy of today's presentation, our annual IRA for and are you. A CSR report are all posted on the <unk> website at <unk> Dot com on a dirty investors' section.
I wish you a you'll receive the if you wish to receive a copy.
All of these documents please contact me directly.
A pleasure for me too.
Send it to you, but Mr debt costs will now and the start with is the comments. So please go ahead.
Yeah.
Thank you Stefan and good morning, everyone.
I'm pleased to present, you our force culture, and your and resins today.
My first call as President and CEO I'm very proud of all what our management team and employees of being able to achieve in spite of the numerous challenges of COVID-19 route in the past year.
We have a group of highly motivated people, who really made the difference this year.
I'd like to thank all of them for the extra efforts you have put in two animal a student to rapidly progress from the execution of a strategic plan towards our growth objectives.
The fourth quarter was another strong quarters for our overall production with a 5% increase over an already strong fourth quarter last year and 7% above anticipated production.
Our Canadian operations performed particularly well with comparable wind production of 10% over 2019, and 8% above anticipated production.
Combined EBITDA for the quarter are inline with expectations and comparable to last year overall RASM of the same period, excluding a gain on the sale of a line in Scotland and other unusual items recorded in the for schools or of 2019.
We have been very active in the fourth quarter with your announcement of two acquisitions, adding 300 for 54 megawatt two of our installed capacity.
And 66 million two of our annualized EBITDA.
This acquisition will be accretive to earnings immediately while the solar parks acquired in early 2021 will provide a growth expansion platform for the renewable energy market in California.
We commissioned three wind farms in France in the culture.
A large force so you did the pool and showrooms of our first Repowering project.
These wind farms added 45 megawatt to a word capacity and 11 million tour annualized EBITDA.
We have been at the eight project and the optimize existing projects where pipeline for a total of 177 megawatts in the force quilter.
We also added 300 megawatt to the secured stage of over growth fast with the signature of the a print contract the <unk>.
Signature of Rex for over a 180 megawatt <unk> solar project and the acquisition of a 20 megawatt solar project at the beginning of 2021.
On slide five of the presentation, you can see the movement.
In our installed capacity growth path and pipeline since the release of our third quarter resolute in the last in last November.
Please note that we are currently evaluating.
<unk> up with would be consolidate if consolidated then the hundreds per person of the 200 megawatt capacity will be added to our installed capacity, but for the moment on the 50% or hundreds of megawatts of the capacity was added to the secured phase, although a growth that representing a where ownership participate.
<unk>.
Moving to the presentation of a growth path.
As you can see on slide six with the addition of projects under construction ready to build and secured we plan to be at 29 99 megawatts of installed capacity almost 200 megawatt over or 2023 objectives.
Please note however that some projects like <unk> will only be commissioned in 'twenty 'twenty four.
I won't go over all of our achievements with regard to a where for a strategic orientation on slide seven as I already covered many of them in the introduction.
But I would like to highlight all of the work done in terms of financial and operational optimization again this year.
As well as the signature of true corporate PPE effective January of 2021.
I would now like to take some time to talk about the progress made with regards to our CSR ESG initiatives.
In the last quarter, we finalized the first version of a corporate social responsibility strategy C. A S. R and produce a worst first standalone CSR report, which is available today on the website.
I'm very proud of all of the art work done by our internal team supported by industry experts the.
This report represents the beginning of a rigorous process and we will definitely continue to evolve.
The strategy and report where he built.
Considering ISO 26000, the approach taking into account the input of our stakeholders through a materiality metrics on the different CSR topics as presented on slide nine.
We also use <unk> in the United Nations sustainability objective to established Oh, we're reporting as shown on slide 10, which represents an extract from the summary table included in our report.
As mentioned in the third quarter call.
We valued including CSR into our strategic plan on the timely fashion, making it as important I was the worst financial objectives.
The output of all the work done is an action plan split into three main pillars and 10 priorities are shown on slide 12 for.
First pillar for crews on issues relating to leading through example.
The second pillar for choosing them, making renewable energy in a sustainable and renewable manner and the third pillar is of both respect for our people our planet and the communities.
In 'twenty and 'twenty, one we're starting the work on each of the Sten priorities on which we plan to improve and set specific goals income.
In years.
Well wherever we will put further end phases on three of these priorities, which our diversity of an equal opportunities reduction of greenhouse gas emission and Eze and <unk>.
Progress with regards to CSR will be reported on a quarterly basis, just as we do or for all of our strategic plan. So stay tune for a more to come.
In conclusion.
'twenty 'twenty was a remarkable year in which we have been able to rapidly adapt ourselves to the COVID-19 situation.
And continued to deliver growth as well a strong profitable restaurants.
We made very good progress on all four of directions, although our strategic plan as well as one of the three financial objectives.
Taking into consideration our progress as well as recent positive changes in the renewable industry. We are currently working on the an update of our strategic plan, which will be unveiled this summer.
This completes my part a will know let Bruno cover the financial portion in more detail and we'll be back later for the question period.
Thank you Patrick good morning, everyone.
I will start with a review of the very good progress made in light of our 2023 financial objectives.
At $146 million are a asset flow for the year of 2020 was $26 million or 22 per cent.
I R than that of 2019.
The growth in EBITDA, resulting from strong strong wind conditions combined with the savings generated by the operating and financial optimization initiatives completed during the year of drove this increase and ethical.
Our dividend distribution ratio now stands at 45 per cent.
Still in line with our 40% to 60% target.
As of today.
Our net installed capacity stands at 2455 megawatt.
Which is getting closer to our 2023 objective as mentioned earlier by Patrick.
Now moving to the analysis of our fourth quarter as shown on slide 16 in our presentation document a Canadian wind operations performed quite well again this quarter with comparable production, 8% higher than anticipated production.
The 10% higher compared to the same quarter last year.
And France conditions were less favorable with comparable production.
4% lower than the very strong quarter of 2019.
Comparable production was however, 8% higher than anticipated production.
Overall wind production for the quarter, combining Canada, and France was 10% higher and the anticipated production and 8% higher than last year.
Turning to the hydro now the Canadian production was 16% higher than anticipated and 35 for <unk>.
34%.
Higher than last year due to a very favorable hydro conditions during the quarter.
Conditions were all over a more difficult in the U S.
Where we have production, 32% lower than anticipated and 43% lower than the fourth quarter last year.
Overall, the Idaho, a segment reported production, 9% lower than anticipated production and 12% lower than last year.
In summary for the fourth quarter.
Total production for the quarter was 7% higher than anticipated production.
The 5% higher than last year, given the strong proportion of win in our mix.
Fourth quarter revenue was followed pretty much the same pattern of production with growth compared to last year can make mainly from the wind sector.
Okay.
For the fourth quarter of 2020 EBITDA was a.
$155 million compared to $165 million from the same quarter in 2019.
Excluding the gain on the sale of land in Scotland.
And other unusual items recorded in the fourth quarter of 2019 for last year EBITDA was in line with last year.
Net earnings were $36 million in the fourth quarter compared to a net loss of $15 million last year.
Very nice increase.
This positive change is coming from a lower amortization charge as a result of an increase of the estimated residue of life of certain components of wind assets.
The war financing costs as.
As well as a lower impairment charge.
In the fourth quarter of 2020.
Moving to cash flow is now we generated a 100 and the $1 million of ISR ex cash flows from operations in the fourth quarter compared to $119 million in the same quarter last year.
A S. A poll at 67 million was comparable to the $68 million in the fourth quarter of last year as the reduction in cash flow from operations.
What's the complaint sated by 2019 nonrecurring adjusting items. So we had an end of the special distribution some day L. P. One project.
Following the refinancing in December 2019 debt not in the operating cash flow as of this year.
As indicated on slide 20, our financial position remains strong with our net debt to total market capital ratio of 41% on December 31, 2020, compared to 56% on December 31st 2019.
In conclusion.
All financial indicators of positive this quarter, thanks to all of our teams across the company.
We continue to register growth and financial results through the acquisition path as well as the organic growth.
We made significant progress in the execution of our strategic plan.
Financial markets recognize the value of our industry and that of our company both Alex.
And we're noticing in this and the acceleration of the renewable energy trends in the transition and growing opportunities for organic growth and acquisitions.
Finally, we are in a very strong financial position to pursue a growth and size opportunities with our disciplined approach.
Thank you for your attention we are now ready to take your questions.
Thank you as a reminder to ask a question. Please press star followed by the number one I get a telephone keypad for clothing that sounds like it will take a ethane from a twice a day of Union knuckle honestly.
Plenty of time.
Your first question comes from the deliberate narrow from National Bank. Please go ahead. Your line is open.
Good morning, everyone.
Hi, Robert.
So we have plenty of real good progress on development in the quarter I was wondering if you could comment on.
The pace of development that you can maintaining a target markets in terms of.
The number of megawatts you can bring forward and is this changing.
Are you able to Inc.
The increase youre developing capacity with more stuff or maybe a developing larger projects for what should we expect going forward.
I think one one of the point the Rupert is a we have some good signs coming from from Quebec during the last quarter in the beginning of 2021. So this typically will increase a.
See the pace of the drop in beer here I should I should say in.
In the in New York, We have also some some good signs of a of the commitment from from from the Governor Cuomo.
And the volume is again the air Sue So we will we will try to maintain the wear or target of 150 to 250 bid every year.
And in France.
There.
Target is I would say between 75 to 220 fives.
Depending of the year, a as I already mentioned in France, you know there are some connections coming so it's all the time some some some of them.
Period, where where you don't know exactly where it will go but its just short term situation on the long term basis, we continue to develop and I think what is important in this quarter is debt we had.
A project in the preliminary phase all of our pipeline and again, that's not easy considering the COVID-19 situation, but we did it for almost the almost 200 megawatts. The one thing I think that's a that's the stewardship.
Is it possible to do it.
Kris that that rate of development and if so what.
I think I think in Quebec and in the U S. The answer's, yes.
In France for the next two years I don't think so.
But on a long term basis, the volume is still there in France too.
So if we can look at a cutback you mentioned some positive signals in that market. I was wondering if you could talk about your pipeline in Quebec, and where you could see.
Opportunities in the future.
For example of if you have.
Still have the capacity expansion at the senior read the Pope do do you feel like you have a.
A good pipeline in Quebec.
The competitive of any any.
Color you can give on that.
Yeah, we have a we have still a.
Say a material capacity on some of you read the bouquet, we have other project or a potential extension of project in Quebec would have not a.
Put on the hold the completed Td's, they've lockman sued the art they are ready to be a to b a b for the next the next round of RFP and maybe you heard the energy Minister yesterday.
Disclosing some intention of first extending the existing contract.
And all sued the starting of RFP, which is small with which was below quickly end of 'twenty 'twenty. One beginning of next year of 200 to 500 megawatt and then that would be the other a round of RFP as mentioned by the minister and the.
Weeks ago. So we have project to complete these these rfps.
That's a a quick follow up to the the Quebec News yesterday, there was some discussion about.
The contracting as you say building new projects and maybe a repowering do you do you think that your projects could be repower and the future in Quebec do you have a vaccine.
That's true.
The land rights of Repowering is attractive.
I think in Quebec, we have you know in Quebec, we have on the a and that come a.
Total bonds, which are very high quality of turbines are really good shape of.
The seven natures of the operation. So we really think the best the best way to go is to continue to optimize the cost of operation and production of these turbines.
We powered them, but we have we have to answer your question, we have land for new projects and the.
It's not a necessity of repowering.
Excellent I'll leave it there. Thank you very much thank.
Thank you consumer book.
Your next question comes from the Nelson Cheung from RBC Capital markets. Please go ahead. Your line is open.
Great. Thanks, good morning, and congratulations on a on a good year.
Thank you my first of all question just relates to.
You talked about California.
Can you and given that most of that at the solar facilities. You acquired are in California, Ken is that going to the be the focus in California, like solar and potentially batteries.
Are you looking at doing wind in California, and finally out in California are there any kind of like how close are you to.
Two of them potentially.
Potentially bidding on projects in California, I know, it's still pretty early days for for you guys.
Yes, indeed, the Nelson it's for we are early.
In the process, we just closed the acquisition the at the beginning of February as you know so we will provide the more information during the year. We are we are indeed, the unseen in looking for for opportunities in the understanding better the market the solar.
Storage, specifically, but when there's enough excuses.
Okay got it and then just moving on to New York in terms of the nice sort of auction.
So you were quite successful last year, but this year.
You didn't get any capacity allocated.
Did you get a chance to kind of a review.
Your bidding strategy compare to essentially of how the market did.
And the like what's your what's your sense on.
On your bad relative to to the to the market.
Yeah. So good question. The bid was a was done in a very.
If you remember it was done in October and September for a night.
And at that time a node.
Of the view of the uncertainty around the future of items she.
Was there and we have decided to be conservative on this with the.
Given the <unk> and surgeons from so we will the rebid this projecting the net the next the nice share the auction.
Is that the debt will come in a in September from a word information for Q1, but we don't think that the worm project.
Of the fundamental.
On the inefficiency or or are not competitive before any fundamentals. It's a question of the assumptions in the bid. Some other players have been more aggressive in the which we are think of.
Our discipline is more important.
Okay, well that's good to hear and then in terms of this year you are.
In terms of projects under construction are ready to be built there's about 47 megawatts.
Can you just talk about whether any of the secure I presume in the secured projects none of those projects will be a 2021.
Project in terms of completion rate and add on that can you talk about your capex expectations for the year end.
You're a financing and liquidity position as well.
Yes for the project side.
We do not expect a to have other project.
To be able to connect other project under which has started construction of this year a we.
We have some for next years from next year, sorry, and we have some in the in the secured project, which of the condition to go to the last of the last stage of under construction and we're working hard to essentially the question though.
Optimization the of the of the grid connection in the this is working well.
And on the Capex I will let Bruno will give you the the figures.
Yes.
So just on the on the financing a question.
The.
Or essentially are we have more than 300 million available on our credit facility.
At the moment, so there's a there's no issue on that front.
And just looking to pull up for them.
And the investment plan.
So.
I have the overall investment clients I'm, just trying to see for 2021.
A.
In terms of total capex.
So a bit on there.
100.
A million or so.
Okay.
With the close too.
Some more between 2025% equity.
Okay and then just.
One last question before I get back in the queue can you remind me.
What years, the the 200 megawatts of solar in New York are supposed to the commission.
The 2000.
Sure.
A 2023 four fold the project and in 2020 for the 122.
Project in 2022 for the <unk> hundred.
And with a for the for.
A 20 project you true.
I restart you had for a.
Project, which are connected to the distribution network of 'twenty makeup of what these will be connected for next year.
The bigger project.
100, when you will be connected.
In 2023.
Okay, perfect I'll I'll get back in the queue. Thank you. Thank.
Thank you Dennis.
Uh huh.
Our next question comes from David cannot ask from Raymond James. Please go ahead. Your line is open.
Thanks, Good morning, everyone a.
My first question here.
I guess with the Sky high.
Assets the acquisition of that asset you acquired a basically a mature construction stage project I'm wondering if that was kind of a unique opportunity or if you see other opportunities like that.
In New York, and I guess, even in California, and the U S where you could you could acquire an asset that's a bit more developed.
No. We are we're looking for opportunities, but the this win.
Was Paul potential for possibly a specific because the seller is just one project of decide the size sorry.
And the but we will continue to look at it it's interesting because it's a very similar project all of the other 20 megawatt project debt, we have and the and so we will the will the will the.
To build the project and the same with the same a group of of foods.
Project with some some savings.
Okay, great. Thank you for that and then maybe just one more.
A question on Canada, I'm, just curious how you see maybe over the next few years, the Canadian market developing as a carbon tax goes higher and presumably the value of Rex also goes higher.
Curious if you consider a.
A merchant.
The development I know that you've typically stuck with contracted assets in the past, but wondering how how you thought that might change as the value of those racks goes higher.
Oh sure.
Clearly, a where shook Houston in Canada for the next the next year's is ease of Quebec, a there is room of the of the block of them here and the and we have project a onto.
<unk> is more a.
The uncertain that we'd see a for the moment, we may arise but the.
But the it will depend of a for a political decision and political vision of the future of the electricity system. A new are you considering the the nuclear refurbishing costs, then all of those things.
N D C. I think is a.
She leaves probably even more uncertain from a review, but we will drill into the tree market within the where the review of a strategic plan. That's my view is up to the DB.
Thanks, Patrick I appreciate that I'll get back in the queue.
Your next question comes from Mark Jarvi from CIBC Capital markets. Please go ahead. Your line is open.
Thanks, everyone.
There was some commentary in the a M.
N D N a.
He said the.
The demand from New York State for for more wind or any of the hydropower from from Quebec and I'm. Just curious when you think about things like the tier for the the RFP for New York does that require the addition of new transmission or age of the existing capacity for exports from Quebec.
And to the U S northeast.
The.
The tier four program a.
As a day or two.
A moat renewable coming directly into the city of of New York, Social generally speaking a mark you need the new line of.
There are different a project of lines. There are some of a real project, which is the GP line to the shelf.
Our express from from Quebec.
Some other project.
So a real project in the there are some items. So I think a I think a this is this you should use new lines, a otherwise you would not be able to bring something new overview of baseline.
A of production Inc.
Two New York.
Okay, and then obviously, there's a lot of the.
A discussion in Canada of what the Atlantic Loop concept project of maybe moving some renewable power from from Quebec into the Maritimes.
Have you had any discussions.
With hydro, Quebec or anything in terms of whether or not there might be an opportunity for women can be involved in.
Any of that potential exports a to maritime.
No we have no no discussion about this was hydro, Quebec, but if you propose to do we will.
Fair enough.
We have them.
Okay, and then just coming back to the a tinny. The recent acquisition in the U S. A the solar side of things.
Do you still need to build operating scale and a.
Foot print to continuing to build out of your development pipeline or do you think what we've done so far is sufficient and therefore, whatever you hear more on the U S side for soldiers on the development side as opposed to operating asset acquisition.
Yeah, obviously, the you know it depend of the value you create and if it's possible to create more value in the when the right time the the.
The organic development is very interesting.
On the many a we are continuing to look to true opportunity.
The depend of the of the risk reward of each project the CRE project a.
A very interesting and trim off the the.
Having a new footprint than there being a long term contract. So we will we will look to this there are some project the zinc a.
Our net creating value because they are.
They are totally do risk, but there are some some some interesting opportunity we're looking at for the moment.
Okay, and then a question for Bruno a bit more detailed in terms of.
The higher corporate and eliminations in the quarter.
Obviously, the looks like some of it looks like a comments around it.
The internalizing some of the maintenance work some of the wind farm in Quebec, and the obviously the margins a bit.
EBITDA margins of the winning the second is quite strong. So can you just help me explain.
How costs are a median he and allocated from the corporate level and actually of the segment level.
Okay.
So I'm not sure of market I'm going to answer exactly your question.
The higher maintenance costs are due to a couple of a couple of things.
A.
Small portion is related to a taking over a maintenance.
Because we added tenths of a.
Cost that are at a built early two a.
To start start the new operation a sort.
Sort of a bit of.
The amount.
And.
Canada. There is also in the mountain trends that's related to the.
Essentially good performance.
In France over the last year, or so, including the fourth quarter of 2019.
So there's a there's a bigger chunk in France.
Because of the assets of <unk>.
Performed over the average.
So all of a bit of extra maintenance, but also and it's important also some.
Premiums to a two operators when the we're not operating.
Because because they've exceeded the baseline so and all of these were accounted in the in the fourth quarter.
Okay, maybe I'll follow up for you there in terms of the attempting to kill the question.
Perfect. Thank you.
Your next question comes from Sean Steuart from TD Securities. Please go ahead. Your line is open.
Thank you a good morning, just one question for me that Hasnt been addressed on an accurate specifically it looks like the contract price is down 17% from.
The initial <unk>.
Structure for us.
The equipment and other capital costs have also fallen.
Can you comment on how you expect returns from that project to compare to what would initially have been anticipated in 2018.
It's a good question, but essentially we have been able to.
Through different T optimization of the first one is the 30 years contract.
The second one you mentioned equipment and and also we have the.
We had for some financial optimization.
On the on the financing of the project, which are the other.
The way so true.
We have been able to a true.
Protect and to maintain a were returned as it was a three years ago.
Okay. Thanks for that detail a lot of the rest of my questions were answered.
Your next question comes from Ben Pham from BMO. Please go ahead. Your line is open.
Hi, Thanks, Good morning, I wanted to touch on your cash in 23 of your guidance a bit more on the listening to some of the the.
The the commentary around the timing of the secured project here. Your response to Nelson's question from the slower timing.
I do look at your project backlog now secured in that chart do you have for you.
You have visibility to 2800 megawatts.
Megawatt.
At this stage or are you more.
The more in that 2600, twenty's hiring a megawatt you need it to procure more.
Well the true.
Okay.
What we know for sure.
Yeah.
One of them.
Yeah, that's right now with the secured with the.
290 993.
To the left.
And the 200, a box and the new already that the IP at the project will be done in 2020 for the commission in 2024. So there is 100 net.
The commission in 2024.
Some of the projects and the secured.
A lot so that would be.
<unk> done in 2024 and.
I'm like it's hard to tell at this point, it's kind of end of 2022, we are beginning of 'twenty 'twenty four or so.
Yeah.
Hard to tell exactly where I was going to a hand.
Depending on what will happen.
And the next few quarters, when we will get more visibility on to secure.
Yes, where we are at this point.
So then the will the will take debt into a into account in our.
A review that a I think we mentioned a.
A lot of quarter, we're going to see a.
Including in our in our review of what we're doing internally, we're going to Seattle, we position the targets, whether we keep the 2023 of whether we we extend the there's little visibility on the on these especially on these cars.
Types of targets over the course of the the next few months, we'll be coming back with more information on that.
Yeah, no that's good and that's not to suggest the growth is not getting done a fantastic job getting the capacity outside of just wanted to see where you sit today and I also wanted to check. This is the 2800 megawatts still.
Translate to the $141 50, because you guys already are around that this year I mean, you normalize for the for the fraction but.
Is there a you're in a situation where maybe you don't have the megawatts maybe the free cash flow of work is much better than you thought you know a lot of Investor day.
There's a couple of things you need to consider other I mean, it's a we forecast a 140 to $1 15, a based on average long term.
A wind conditions, I'd say, when the but essentially resource conditions.
So a long term averages.
We are seeing a certainly a since the last quarter of 2019 better conditions than average so.
A question needs to be in a sort of related to averages versus a exceeding averages. So in the last a year or so and a bit more we've exceeded averages.
So.
The 2800, a versus $1 48 to $1 50. It was a was based on the sales averages.
Uh huh.
We keep over performing and then we've obviously done a few optimization initiatives completed that were not expected.
We're seeing a bit more growth in some markets. That's why I said, where we're looking at all of this sort of all of these changes in the situations from cloud client of <unk>.
The 18 2019.
And we're going to come back to a market.
Because there's a few things that have changed as of June just pointed out.
Okay.
In your debt.
The summary.
Really it's not that I want to get ahead of that I mean, that's.
I'm thinking of that sounds like a trying to figure out what your target is whether it's 'twenty four 'twenty five.
But is there anything you think about around.
Really just the size of the projects Youre looking at I mean a.
Are you.
Maybe contemplating 20 megawatts, that's too small for you when you're a you're up to three gigawatts versus two gigawatts of a couple of years ago is.
Is there maybe something just beyond.
The thought process that you put out a couple of years ago.
Yeah. That's a good question. The the point is there is.
Technically there are some thresholds.
The.
Of going from a distribution project to a.
The transmission grid project an abuse. The we are a P. When we do transmission grid project, which are should be of all of a significant size from seeing friends, who should be typically a around the around the 33 equal to make out what the.
This is this is really the minimum in the U S. A as you have seen way of the 120 megawatts.
Quebec, it's even more.
But the but there is a niche there is an interesting place.
For a developing project.
Under the thresholds.
Because of cost a is the right one and generally the procedures for reconnection and sometimes like in New York the procedures for which organization or are a simply here and then then I'm I'm not sure debt we have to kill this we have to to optimize the way.
We do day project.
And the and definitely if we can avoid do see smaller project, the which are not the limit of the stretch hold a.
We will we will because a because otherwise we have to do too much project with the.
That's my answer.
Okay, Alright, thank you very much.
Thank you Ben.
Your next question comes from Andrew <unk> from Credit Suisse. Please go ahead. Your line is open.
Thank you good morning, you've been involved with various partners in the past and I'm just curious as to your thoughts on.
The balancing act of having partners with the future development projects for or even selling partial interest in existing projects or the areas listen the assets you have for.
First of all of the complexity of that that can bring to the financials.
The first point is a.
We are we are thinking and we have been thinking a since the since we're.
Our strategic plan was released two years ago.
To have the partners in nowhere a project in the in New York.
The.
Do you have a flip of a part of the project to this is a this is typical market practice.
So so so we will continue this way we have wholesale partners like the the.
The the first nations.
The debt spring.
A great value for social acceptability of the project and the development.
And for your question, we will of the lives the points there.
Again, the strategic plan review.
It was a it's a balance of as you said between complexity and the efficiency in all of them inside the.
The the value created by somebody having a lower cost of capital sort of social.
We are we're thinking a we are open to debt, but it should be it should be interesting for the company and not creating too much complexity.
Okay. Thank you for that.
Maybe a follow on question really just relates to.
The U S market presence and you know if you go back many years ago. When you started to move out of a core market in Quebec.
Systematically adult the presence in various markets and then expanded your generation capability into those areas.
You look at the U S right now and just some of the recent activities that you've done there and what are you missing from a.
Staffing standpoint or.
Just a critical mass.
Okay.
Uh huh.
I think I think in New York State. The we're just a I'm not sure. We are missing something we're just missing we just start to two years ago. A so so so I think the from from two years ago I'm very happy where we are a because we had for 200 megawatts of project.
Which are secured dear.
The for a so so so so do we need more more more staff a as I mentioned the true.
The question there could be some some increase of thanks to the cool move a goals and objectives for 'twenty three D. A.
And we are starting a we're starting to look around in California. After the acquisition, which of schools 20 days ago true. So we will continue to work on debt in the end.
The again again, it's one of the question off of work off of where the strategic plan and the may be a.
The market, which are adjacent to two of the.
Please where we we know of assets could be could be of interest.
Okay. Thank you very much.
Your next question comes from from I think they do from a capital markets. Please go ahead. Your line is open.
Hi, Good morning, just wanted to get a bit more color on the potential for Boralex a through the tier for program in New York can you maybe just comment on how you're thinking about participating in the upcoming solicitation of this year are there any specific projects in your current development pipeline that will qualify a.
For the tier for program.
The the program is dedicated to renewable energy coming directly to New York City, So you need to.
Do you have the a line.
And as I as I mentioned earlier, we are analyzing what is possible for the tier for it but also there would be tier one program.
A tender.
During the year in September to a we'd have to look to the different opportunity. We had said the.
And we will come back to the market when when this would be on the life.
Okay.
Maybe a bit too soon then.
Maybe then just a comment on a on.
The progress that you're making in France, a and and specifically the last round of onshore wind auctions. I think you were awarded a pretty large project a larger than usual in size, maybe just comment on on that project in a few of any updates on the moly and do the whole project as well.
Yeah.
It was it was a it was the.
A 68 a project we have the possibility also to to to increase.
Modified by 10% if we have in the any optimization of the projected the.
The future.
It's good because it was the last of the last round with a was known a.
A.
Rules the rules will change in the does is underway, but the volume will be there as you know it would be of a 1.85.
Can you get what per year, and they'll do the wall of the procedures nothing new we're still waiting for the which of the friendship Supreme Court the cool shaded the word decision.
On the project during the the first half of the year and a as soon as we have the information we will disclose the information.
I guess just a follow up do you expect a bit more of these larger projects going forward in France, either in wind or solar or a two earlier comments of the focus is still on the potential.
Potentially smaller projects.
I think it's a.
<unk>.
A 68 project in France as a project over a 50 megawatt are generally speaking exceptions and trends.
This is a this is.
On one side you can see okay.
It's too small on the other side. This is why the <unk>.
Rice's maintains a excuse the maximum price of the last tender.
Little bit over 60 megawatt hour, which is which is still in the interesting price. After the after six rounds of Rfps. So the prices maintained in debt. That's the good news for investors to a we will continue to try to optimize all of the project we have to increase the size of.
Of the turbine and the power of the turbine, but generally speaking the number of the total buying a.
It's more difficult to do a project, we'll see like like this project, which is a 60.
<unk> 17 total buying project.
It's a journey the exception.
Okay. Thank you for those details.
Okay.
Your last question will come from Nelson <unk> from RBC capital markets. Please go ahead. Your line is open.
Great. Thanks, just a quick follow up for me so on the development side, obviously, it sounds like you've been more active in more regions, even in 2020, but like when I look at the developments and a in.
In the discretionary cash flow of calculation a table.
It looks like 2020 actually reduced to like the development reduced to 23 million down from 24 million in 2019.
I was just wondering whether that's due to like whether that's COVID-19 related in any way in terms of the ability to get things done.
And do you expect development spend to really kind of ramp up this year a next year.
Yeah, I think a thickness.
It's probably partially a COVID-19 related indeed, because there was some some delay in development. So sometimes some of the New York starting the studies of the environmental study or the study which are cost for the development.
I hope with all of the thing.
I'm not the hope we will spend more money, but I hope a I think we will have more project. This year, thanks to the the <unk>.
The start of the Quebec market and the word developments of the one thing it's not it's not the material question C. A.
The machine is slowing down a I'm not sure it's just the gist.
2020 ex towards extraordinary a year.
It was also a if I can add there was also a focus clearly on on a fairly large acquisition in California.
Which of which took a bit of applying the other.
The other the teams. So I mean these are the two main reasons, but the.
Yeah.
There is a there's more money for the development.
The budget for that.
Okay. So we should see a decent increase this year.
Yes.
Okay. Thank you that's all for me.
Yeah.
We have no further questions I'd like to turn the call back over to presenters for closing remarks.
Alright, thanks, everyone for your attention if you have any additional questions. So please call me up for the Taiwan walk to a 310 for a five and I'll make sure. We quickly answer your questions. Our next conference call to announce the first quarter results will be on Wednesday may 5th and we will also all of our virtual AGM that St.
They somehow the all remain healthy have a green.
Good day everyone.
Ladies and gentlemen. This concludes today's conference call you may now disconnect.
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