FirstLight Power has reached a deal to acquire Hydromega, the Quebec-based clean energy company with over two gigawatts of wind, solar, storage and hydroelectric projects in its Quebec and Ontario development pipeline.
Headquartered in Burlington, Mass. but wholly-owned by Canadian pension plan manager PSP Investments, FirstLight has now clearly signalled its intentions of becoming a major player in Canada's renewable energy market. The Hydromega deal, expected to close by the end of the year but whose terms remain undisclosed, comes on the heels of FirstLight's takeover of Oshawa, Ont.-based H2O Power earlier this year.
"The strategic acquisition of the Hydromega platform continues an exciting and transformational period for FirstLight," Alicia Barton, president and CEO of FirstLight, said in a statement accompanying the Sept. 13 announcement.
"By adding Hydromega’s development capabilities and operational assets to FirstLight’s existing diversified renewables and energy storage portfolio, we will position ourselves for even greater growth in the years ahead as we pursue our mission to accelerate the decarbonization of the electric grid by building, operating and integrating renewable energy and storage to meet the world's growing clean energy needs."
FirstLight spearheading Canadian renewable energy sector expansion
Combining Hydromega’s energy assets with those of H2O Power gives FirstLight a total operating capacity of over 200 megawatts in Quebec and Ontario. Hydromega provides clean, reliable power to both provinces, including 1,000 megawatts of wind development projects in Quebec and over 1,000 megawatts of battery storage development projects in Ontario.
FirstLight operates the largest clean power portfolio in New England.
The Hydromega deal not only enables the company to deepen its penetration into the Canadian market but also to bring its extensive expertise to bear by modernizing existing renewable energy facilities and developing similar operations.
"Our goal is to develop, build, own, and operate the clean energy projects that we believe will be needed to decarbonize electric grids in North America," Barton said during an interview with SustainableBiz.
"We've set that as our company's ambition and we are particularly excited about this Hydromega acquisition which represents an additional expansion of our operating portfolio as well as our development pipeline in key markets like Quebec and Ontario."
Hydromega's history in Canada's renewable energy sector
Hydromega regards FirstLight as an ideal fit in terms of its avowed clean energy mission and inherent operational capabilities.
"Given its track record of managing clean energy assets and natural resources in harmony with the environment, it is clear that FirstLight shares our values, so joining forces with them makes sense on many levels," Stéphane Boyer, CEO of Hydromega, said.
Hydromega has been developing, implementing and operating clean electricity production facilities for over 36 years in Quebec and for 20 years in Ontario. Beginning in 1987, the company was the first independent power producer to operate hydroelectric facilities in Quebec and today accounts for more than 25 per cent of the province's installed wind power capacity.
Barton also believes it is vital Canada's two largest provinces continue to increase the proportion of renewable power in their overall energy mix.
"We see a strong fundamental underlying need for expanded and new clean power resources in both Ontario and Quebec," Barton said. "The kind of strong economic growth we are seeing in these regions, coupled with the decarbonization imperative is going to require electrification of things like the transportation sector."
One of the primary assets that made Hydromega an attractive takeover target was its robust pipeline of wind, solar and battery projects in various stages of development.
"We will be looking to expand that pipeline as well as examine opportunities to do interesting things like potentially pairing batteries with hydro assets or building out combinations of resources that will help Ontario, in particular, increasingly meet its needs as it fulfills its goal of moving away from fossil fuel generation over the coming decades," Barton explained.
Taking Ontario to the clean energy promised land
Folding Hydromega into its clean energy operations is merely the beginning of FirstLight's ambitious development program with respect to adding to its pipeline of renewable energy opportunities.
"It's going to take a lot of things to come together," Barton admitted. "Ontario has been been putting out reports – its Pathways to Decarbonization for example – that discuss some of those things that we are working on at FirstLight."
Now that FirstLight has completed its integration of H2O Power – which has 150 megawatts of operating hydro facilities – into its portfolio, Barton believes substantial possibilities remain to upgrade and expand those facilities to generate more incremental hydropower. Ontario will be a focal point of FirstLight's evolving clean energy mission.
"We applaud Ontario for trying to move in this direction to tackle the imperative of decarbonization," Barton said, "but we'd also like to encourage the province to continue to think about how it will be delivering the resource mix in the future, which as they know and we all know, is going to look very different.
"For example, the Canadian federal government is looking to effectively phase out reliance on fossil fuels in the power sector. That's going to create both a challenge and an opportunity for creativity and is also sending out market signals that will allow companies like ours to respond with workable solutions."
FirstLight CEO Barton has long advocated for clean energy
Prior to joining the company in 2020, Barton had long been an advocate of reducing our carbon footprint and fighting climate change.
She began her career as an environmental lawyer before serving as CEO of the Massachusetts Clean Energy Center and later as CEO of the New York Energy Research and Development Authority.
"I've been working on on clean energy and and clean energy projects for well over a decade now," she said. "At one point in my life I underwent a kind of a shift in attitude where I decided that instead of focusing my energy on regulating carbon pollution and climate change, I wanted to be part of the solution towards building a better future . . .
"But those solutions involve integrating renewables and storage in a way that delivers a more firm clean power product product and also that does in a way that is cost effective over the long term."