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Rising energy prices in Europe benefit Boralex



With the sharp rise in energy prices in Europe, companies’ interest in renewable energy supply is growing, notes the CEO of Boralex.

“Companies are no longer thinking only of supply contracts to boost their ESG contribution, but they want to secure the price of their electricity in the long term”, said Patrick Decostre, big boss of the renewable energy producer from Kingsey Falls, at a conference to discuss fourth quarter results. “It gives us a lot of chances. »

Geopolitical tensions between Ukraine and Russia are putting increased pressure on energy prices in Europe, but they alone do not explain the inflationary pressure, underlined Mr. Decostre.

For example, the company Electricité de France has announced a reduction in its nuclear energy production while three reactors have corrosion problems. Germany is preparing to exit nuclear power altogether this year and closed three of its last six plants at the end of last year. Higher carbon taxes are also contributing to the rise.

The manager also pointed out that the surge in prices which “certain parks” in France were able to benefit from contributed to the increase in operating profit in the fourth quarter. Operating profit increased by 23% to 74 million.

Production below expectations

However, this increase in operating profit occurred despite electricity production being 12% lower than anticipated.

Production at the Kingsey Falls company rose 2% to 1,492 gigawatt hours (GWh) in the last quarter. The company pointed out that solar and wind power generation were lower than expected, while hydropower generation was above expectations. Revenues fell by 1% to 192 million.

Sean Stuart of TD Securities believes the results “contain no notable surprises,” but he believes operating results are slightly below expectations. “We believe the consensus expected lower production in France, but this was compensated by better prices and better margins. »

Net profit attributable to shareholders, for its part, fell from 25 million to 17 million. The company attributed the drop to taxes and an increase in depreciation.

During the fourth quarter, the company added 137 megawatts (MW) of early-stage solar and wind projects. “We now have 3,890 MW of projects in development or under construction and are in an excellent position to take full advantage of the growing development opportunities in our target markets,” added Mr. Decostre.

New York State’s bidding process for a project of up to 800 MW of solar power is experiencing delays. Parts of President Joe Biden’s infrastructure plan are still pending approval, delaying the process. The company hopes to get a response in March for a submission it filed in September.

The company is also expecting a response from the Quebec government this year for calls for tenders for 300 MW of wind energy and 480 MW of renewable energy. Mr. Decostre recalled that Quebec had indicated that other calls for tenders would be launched in order to meet the growing demand for electricity.

At the close, the stock closed up 29 cents, or 0.90%, at $32.57.

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