(Montreal) A commercial dispute, which is shaking the American solar energy industry, has overshadowed four Innergex projects in Hawaii. The Quebec energy producer must put them on hold for an indefinite period.
Updated May 10
The US Department of Commerce’s decision to initiate an anti-circumvention investigation into imports of solar panels from Southeast Asian countries has sent shockwaves through the industry. The investigation might result in the imposition of retroactive tariffs on silicon photovoltaic modules.
The Longueuil company was thus forced to “pause” four projects in the state of Hawaii on April 25. Together, the four projects have an estimated power of 80 megawatts (MW). “We decided to put these projects on hold to have better visibility on the possible penalties or not that the American government will impose”, said the president and chief executive officer, Michel Letellier, during the virtual meeting. of the company on Tuesday.
Innergex also reports having received a “force majeure notice” from Tesla, its battery supplier, which is experiencing difficulties with its supply chain.
The timelines for the four projects are currently being revised. One was under construction (30 MW) and the other three were not yet at the construction stage (total of 50 MW).
Despite the uncertainty surrounding the four projects, Mr. Letellier said he was optimistic regarding their realization. The company is currently in discussions to obtain a better price for the electricity they will produce to take into account supply chain disruptions and possible tariffs imposed by the US government.
“Hawaii really needs this kind of project. Hawaii has some pretty aggressive plans to get rid of coal and diesel, which is used primarily to generate electricity. It’s costing them a fortune. So, we think that the revised proposal that we are going to propose to them should be acceptable. »
So far, the company has spent “between 47 and 48 million” for these projects, said the chief financial officer, Jean Trudel, during a conference call with financial analysts.
Note that this was Mr. Trudel’s first quarterly results release as Chief Financial Officer. At Innergex since 2002, the new Chief Financial Officer was promoted to this position in mid-April. His predecessor, Jean-François Neault, left office following The Press revealed that he was under investigation by the Autorité des marchés financiers (AMF) for allegations of insider trading that arose before he was hired by Innergex.
A commercial dispute
The Commerce Department is investigating whether Chinese companies avoided tariffs by exporting their panels from Thailand, Cambodia, Malaysia and Vietnam.
The decision by the administration of President Joe Biden has been strongly denounced by the solar energy industry, which points out that the investigation is slowing down the energy transition. Installing solar panels is already nearly 57% more expensive in the United States than in Germany, according to the International Renewable Energy Agency. The European Union abolished tariffs on Chinese solar panels in 2018.
For his part, Mr. Letellier said he understood the objective of the American government to try to promote the manufacture of solar panels in the United States. “I think there is a balance to be found between the desire to make the energy transition quickly and the desire to create jobs in this field,” he said during a conference with analysts.
The industry appears to enjoy strong bipartisan support from Republicans and Democrats, added Mr. Trudel. Elected officials would push for a speedy investigation, he said.
Outside of Hawaii, other projects are well underway, however, the company points out. A total of 11 projects are at “advanced stage”, with a total installed capacity of 508 MW.
The company also announced on Tuesday that it has signed an agreement with Mitsubishi Power for two energy storage projects in four countries totaling 425 megawatt-hours (MWh). The two projects represent an investment of 128.5 million US, the equivalent of 166.6 million.
The results
In the first quarter, Innergex announced a net loss of 34.9 million, compared to a net loss of 217.9 million. Outages related to the 2021 winter storm in Texas account for the larger loss last year.
The company’s revenues, for their part, increased by 40% to 188.7 million. Proportional production was 95% of long term average (LTA) production.
The stock gained 14 cents, or 0.86%, to $16.34 at the close of the Toronto Stock Exchange.
