MONTREAL—Boralex says its natural gas co-generation facility in Kingsey Falls, Que., could get a new lease on life if the alternative energy producer can win a supply agreement with Hydro-Quebec.
The public utility is seeking candidates that can provide power to the grid during winter months to compensate for unstable electricity supplied by wind farms.
Boralex intends to put its name forward before the June deadline. A request for proposals would follow for five-year agreements involving facilities that produce more than 20 megawatts (MW) of power.
“It would be a great second life for this facility and who knows what can happen in those five years,” CEO Patrick Lemaire said Wednesday in discussing its first-quarter results.
In 1989, the natural gas-fired co-generation facility became one of the first power stations in Quebec to supply electricity to the Hydro-Quebec grid.
If gas prices stay low, Boralex might be able to extend the contract for a longer period, he added.
Employing about 300 workers, it faces low natural gas prices and challenges in securing long-term supply contracts under current market conditions, Lemaire said during a conference call.
Profits at Boralex surged on higher revenues from wind and hydro-electric production and the addition of solar power in France. The improvement was driven by a 13 per cent increase in wind and hydro-electric power output, higher selling prices and the June commissioning of its first solar power station.
Lemaire said the results showed the benefits of the strategic approach the company has taken over the last three years to pursue sustainable growth.
He added the company is optimistic about its future after achieving several milestones.
“With a profile of close to 100 per cent of contracted capacity, a strong balance sheet, (and) less volatile future cash flows, Boralex is in an excellent position to deliver on its current pipeline of quality projects,” he told analysts.
It recently announced a power sales contract covering a 50-megawatt wind power project to be developed in the Temiscouata area of Quebec. An additional 441 MW of wind power capacity will be commissioned in Quebec by late 2015, of which Boralex owns 246 MW.
Its thermal power station in Dolbeau, Que., ceased operations in the third quarter. The sale of these biomass assets gave Boralex about $160 million to pursue acquisitions in the wind power segment in Ontario, Quebec and France. Lemaire hinted that the company could soon announce a new acquisition in Europe