BEHIND THE SCENES
CEO Northland Power
Northland Power is the majority shareholder of the Gemini Wind Park. How did this Canadian independent power producer end up investing in the North Sea? And how does Gemini fit into the company’s growth strategy? We asked John Brace, CEO of Northland Power, about his perspective on and experience with Gemini to date.
Mister Brace, thanks for your time. How would you describe your involvement in the Gemini Wind Park? Would you consider this to be Northland’s steppingstone into the offshore wind market?
‘I would say it was a stepping boulder, rather than a stepping stone! We weren’t specifically looking for offshore wind parks as an investment, until the opportunity for a few new developments presented themselves to us. Gemini was one of them. We looked into each of the various opportunities, however the other parks did not match our investment criteria. This was not the case with Gemini - it ticked all the boxes. So after further due diligence and research we made the decision to go ahead.’
Could you speak more about the criteria Northland uses when assessing investment opportunities such as Gemini?
‘First, we look at the arrangements being made for sale of the power. Are the companies involved creditworthy? And are the projected prices possible to realise in the market? Our second point of interest is how the project is going to be built. In the case of Gemini, with Siemens and Van Oord on board both as contractors and shareholders, and given their significant experience and expertise in the offshore wind industry, it looked very well-structured. Other criteria we considered was whether or not the project had the necessary permits, whether we could mobilise the needed capital and last but not least: the team of people involved on behalf of the ownership group – which in this case, was exceptional.
Don’t forget, this is by far the biggest project we’ve ever undertaken. From Northland’s perspective, it has an overall construction cost of $4 billion CDN - prior to Gemini, our largest project was $700-800 million. So it was a big step! Even more so when you take into account that Gemini is our first offshore wind project. We therefore had to ensure we were comfortable with the idea.’
How does Gemini relate to the Canadian ‘market’ of wind energy?
‘In Canada there are no offshore wind projects. All wind energy is produced on land; currently there are approximately 11.000 megawatts of installed wind capacity across the country. Northland has four Canadian wind farms – two located in Quebec and two in Ontario. Sometimes proposals for new onshore wind developments are met by scepticism on the part of people living in the surrounding area, but that mostly depends on the specific situation on-site and how densely populated the area is. In some cases, people resent having wind turbines in their backyards. In some cases people welcome you with open arms. It’s important to deal with the various emotions in a proper and respectful way.’
Your company has been involved with Gemini for approximately two years now. How would you describe your experience so far?
‘We are definitely very satisfied with how the project is progressing. We meet with the board of directors once a month; the venues alternate between Amsterdam and one of the production sites. We’ve been to all of the factories so far, which gives us a thorough inside look at the operation. The hard work of the Gemini team is evident, based on the results to date. There is still a lot to do, but we’re very pleased with how things are going.’
Coming back to the ‘stepping boulder’, do you consider Gemini your entrance to the European wind energy market?
‘We have already expanded our presence in the sector, with majority (85%, ed.) ownership of a second offshore wind park - NordSee One - for Germany, that is also in construction. We are also busy looking at new opportunities in Europe, as well as globally. With Gemini expected to be operational in 2017, a major portion of our earnings before interest, taxes, depreciation and amortization (EBITDA) will soon be derived from offshore wind energy. In that sense, we have made a lot of progress in a short period of time.
Turning back to Gemini, I would like to congratulate Van Oord on their excellent work. They installed the foundations at a world-record-breaking pace. I would also like to thank the Gemini-team working for the ownership group for their diligence and devotion to the project.
Keep up the great work!’