Northland Power Inc. · TSX:NPI
Northland Power — Investor Presentation (October 2023)
45 slides from Northland Power's investor presentation, Oct 10, 2023
Slide 1: Offshore Wind – Investor Update
Offshore Wind – Investor Update October 2023
Slide 2: Agenda
Agenda 1 Mike Crawley Introduction 2 Mike Crawley Offshore Wind Update 3 David Povall Construction Projects (Hai Long & Baltic Power) 4 Pauline Alimchandani Corporate Outlook October 10, 2023 Please see Forward Looking Statements disclaimer contained within this presentation 2
Slide 3: Northland Overview
Northland Overview • Northland is a leading global power producer at the forefront of the global energy transition • Over 36 years of success developing, constructing and operating power projects across a range of technologies • Well-diversified portfolio of high-quality power infrastructure assets:
Slide 4: Visible Growth Pipeline
Visible Growth Pipeline Strong Growth Portfolio Across Multiple ~16 Technologies After Capitalized Development Projects GW3 Growth Pipeline (incl Continue to target Europe and Asia as key markets Capitalized for offshore wind development Devt Expand onshore footprint in North America as well Existin
Slide 5: Offshore Wind Update
Offshore Wind Update 55
Slide 6: Optionality from Large Pipeline & Global Capacity Growth
Optionality from Large Pipeline & Global Capacity Growth Global Offshore Wind Capacity Growth Global Offshore Markets Growth Targets 600 Canada n.a. Key United States 30 GW Offshore Wind Capacity (GW) 500 geographic Scotland 11 GW 400 focus for Germany 30 GW Northland Netherlands 22 GW 300 Denmark 1
Slide 7: Capital Allocation for Our Offshore Wind
Capital Allocation for Our Offshore Wind Key Attributes Global • Market assessment Offshore • Strategic fit and value creation Wind • Market knowledge and resourcing Opportunities • Partnership opportunities Initial Assessment • ESG alignment & regional assessment • Economic returns earn a spread ab
Slide 8: Positive Attributes of our Offshore Wind Investments
Positive Attributes of our Offshore Wind Investments Gemini Nordsee One Deutsche Bucht Baltic Power Hai Long Attributes (2013) (2014) (2020) (2026E) (2027E) Long-term revenue stability Strong government support for OFW sector Credit worthy off-takers Long-term non-recou
Slide 9: Evolution of the Offshore Wind Turbine
Evolution of the Offshore Wind Turbine Hai Long Baltic Power Vestas V236 – 15.0MW SGRE 14-222 DD – 14.0 MW No. of Turbines – 76 No. of Turbines – 73 Diameter – 236m Diameter – 222m Height – 258m Height – 254m Deutsche Bucht Nordsee One MHI Vestas – 8.4MW Gemini Senvion – 6.15MW No. of Turbines – 31
Slide 10: Offshore Wind Construction Expertise
Offshore Wind Construction Expertise • Experienced Construction Team – on-ground oversight Northland’s approach to deliver • on offshore Fully wind construction Contracted – Prioritizes EPC Contracts with fixed price • Experienced construction team – on-site supervision Northland’s Multi-Contracting
Slide 11: ~10GW Offshore Wind Portfolio – Attractive Global Platform
~10GW Offshore Wind Portfolio – Attractive Global Platform 1.2GW 2.2GW ~7GW Operating Construction Development Gemini Nordsee One1 Deutsche Bucht Hai Long Baltic Power ScotWind Korea Other Taiwan Straits, in Atlantic Korea South Location Dutch North Sea German North Sea German North Sea Polish Balti
Slide 12: Project Development Timelines
Project Development Timelines Stage of development lifecycle Baltic Hai Power Long Cost Estimation Procurement Preferred Supplier Contracts Financial Close/ Under Agreements Executed Ready to Build Construction Key Factors to Success of Offshore Wind • A global portfolio/pipeline allows for strategi
Slide 13: Hai Long & Baltic Power Construction Milestones
Hai Long & Baltic Power Construction Milestones Fully-funded1 construction program with first power expected for Hai Long in H2 2025 and H1 2026 for Baltic Power Hai Long • First turbine installation Commenced Achieved • First foundation installation Commercial Commercial • Offshore substation insta
Slide 14: Main Components and High-Quality Contractors
Main Components and High-Quality Contractors Illustration of key construction components Hai Baltic Long Power Grid Onshore Offshore Substation Substation Substation WTGs Onshore cables Foundations Offshore export cable Inter Array Cable Hai Long Baltic Power 14
Slide 15: Our Project Partners
Our Project Partners Reputable project partners strategically complement project development/construction execution Hai Long Baltic Power Key role in financing through Lead role in its extensive Asia network and development, long history in Taiwan with construction and government & trade relations o
Slide 16: Disciplined Growth Delivers Superior Risk Adjusted Returns
Disciplined Growth Delivers Superior Risk Adjusted Returns Risk Mitigation Measures in Place with Ability to Outperform Beyond financial close, returns are protected through a variety of risk Several factors could contribute to optimizing our current return mitigation measures profile Potential Risk
Slide 17: Optimizations and Upsides
Optimizations and Upsides Project Economics are conservative due to macro considerations and project financing lenders; however, disciplined execution is expected to lead to opportunities for upsides Potential Optimizations Base (Current) IRR Construction Execution Refinancing / Re-sculpting • All C
Slide 18: Construction Projects: Hai Long
Construction Projects Hai Long October 10, 2023 18
Slide 19: Hai Long Offshore Project 1.0 GW
Hai Long Offshore Project 1.0 GW • Stable revenue through 20-year FIT and 30-year Corporate Power Purchase Agreement with S&P AA- rated counterparty • Construction is fully funded and long-term non-recourse project financing has been secured in challenging market conditions HL3 HL2 • Major construct
Slide 20: Taiwan Renewable Energy Industry
Taiwan Renewable Energy Industry • The government is aggressively pursuing renewable energy Offshore Wind Targets (Cumulative GW, 2020 – 2035) development in order to meet international environmental commitments and to denuclearize Taiwan’s current energy mix Phases I - III Phases IV - V 20.7GW • Ta
Slide 21: Taiwan Offshore Wind Projects & Sponsors
Taiwan Offshore Wind Projects & Sponsors Taiwan currently has 0.5 GW in operations, 3 GW under construction and another 3 GW in advanced development Zhong Greater Hai Long Greater Name Formosa 1 Formosa 2 Yunlin CFXD Neng Changhua 1 2&3 Changhua 4 Advanced Status Operating Operating In Construction
Slide 22: Construction Strategy & Schedule
Construction Strategy & Schedule • All construction contracts secured with experienced high-quality contractors • Hai Long will be built over three construction seasons, because it is assumed you cannot construct in Taiwan during the winter months. • Scheduled buffers between construction phases/con
Slide 23: Summary of Key Project Risks
Summary of Key Project Risks Management's view of key project risks and mitigations executed to date: Project Risks Mitigation Large scheduled buffers between EPC contracts Multi Contract Experienced EPC contractors used Structure Direct interface with local contractors Buffers in constructi
Slide 24: Construction Projects: Baltic Power
Construction Projects Baltic Power 24
Slide 25: Baltic Power 1.1 GW
Baltic Power 1.1 GW Baltic Power • Construction is fully funded and long-term project financing with 25 financial institutions has been secured • Stable cash flow from 25-year Contract for Differences (CfD) revenue contract that has indexation based on the Polish CPI commencing in 2022 • Currency: I
Slide 26: Poland Renewable Energy Industry
Poland Renewable Energy Industry Generation Capacity Mix (GW, 2022 – 2040) Coal Gas Biomass and Waste Wind Onshore Wind Offshore Solar Storage 73 • Increasing commitment towards the development of 63 70 renewable energy for shift away from coal which accounts 55 48 50 for close to 70% of its power m
Slide 27: Construction Strategy & Schedule
Construction Strategy & Schedule • All construction contracts secured with experienced high-quality contractors • Project will be built over 3 construction years on a continuous basis, with buffers factored in all-season (unlike Hai Long) • Schedule provides for ample buffers between EPC contracts •
Slide 28: Summary of Key Project Risks
Summary of Key Project Risks Management's view of key project risks and mitigations executed to date: Project Risks Mitigation All permits received are in place First OFW Project in Strong local stakeholder engagement through our partner (Orlen) Poland Strong engagement with government to mana
Slide 29: Corporate Outlook
Corporate Outlook 29
Slide 30: Corporate Outlook
Corporate Outlook Accomplishments Since We continue to advance Value creation Investor Day (Feb 2023) our selective pipeline ahead Executed on ScotWind partnership Approx. $570M-$615M of new Adjusted Commenced construction on Oneida, Hai EBITDA by 2027 representing a CAGR of Long and Baltic Power 7-
Slide 31: Consolidated Construction Costs Profile
Consolidated Construction Costs Profile • Approximately $16B pipeline under construction (Hai Long, Baltic Power, and Oneida) • NPI equity required has already been secured • Gentari transaction expected to close in fourth quarter of 2023 • Hai Long pre-completion revenues are expected to commence t
Slide 32: Significant Visible Adjusted EBITDA Growth
Significant Visible Adjusted EBITDA Growth Adjusted EBITDA Notable Changes in Adjusted EBITDA 2027 vs. 2023 $1.6-1.8B Growth • Contribution from capitalized growth projects: Hai Contribution Long, Baltic Power, and Oneida $1.2B 7-10% from Hai Long, CAGR Baltic Power, • No further material growth ass
Slide 33: Adjusted EBITDA by Technology 2023-2027
Adjusted EBITDA by Technology 2023-2027 Onshore Onshore Efficient Wind 12% Wind 18% Efficient Natural Natural Gas Gas 18% Solar 5% 22% Solar 6% Storage 3% 2023 2027 Adjusted Adjusted EBITDA EBITDA Offshore Offshore Wind 54% Wind 62% More than 60% of Adjusted EBITDA will be generated from offshore wi
Slide 34: The Course Forward
The Course Forward Focus shifts to Remain Increase near- Asset level Increase energy Opportunities for project execution disciplined on term allocation partnerships/ storage focus corporate/ and value creation capital to onshore & Capital industrial within existing deployment and energy storage recy
Slide 35: Northland Power
ff NORTHLAND POWER
Slide 36: Appendix
Appendix 36 36
Slide 37: Offshore Wind Portfolio
Offshore Wind Portfolio Deutsche Bucht (252MW) Nordsee One Gemini (332MW) (600MW) Baltic Power (1,140MW) ScotWind N2 – Floating (1,500MW) N3 ScotWind N2 N4 N1 N4 - Fixed (840MW) Dado Hai Long 2A (294MW) (1,270GW) Hai Long 2B (224MW) Bobae Hai Long 3 (504MW) (616MW) Wando (1,800MW) ~10GW of offshore
Slide 38: Offshore Wind | NPI's Portfolio
Offshore Wind | NPI’s Portfolio Gemini Nordsee One Deutsche Bucht Hai Long Baltic Power Taiwan Straits, in Changhua Location Dutch North Sea German North Sea German North Sea Polish Baltic Sea County Distance to Shore 85km 40km 80km 40 - 50 km 28km Ownership 60% 85% 100% 60% (30.6% post Sell-down) 4
Slide 39: Offshore Wind | Key Financial Metrics
Offshore Wind | Key Financial Metrics Gemini Nordsee One Deutsche Bucht Hai Long Baltic Power Capacity 600 MW 332 MW 252 MW 1,022MW 1,140MW Total Project Costs €2.8 Billion €1.2 Billion €1.5 Billion C$9.0 Billion C$6.5 Billion Contract for Feed in tariff Revenue Contract Type Feed in tariff Feed in
Slide 40: Hai Long Construction Progress - Photos
Hai Long Construction Progress - Photos Fabrication of full pin-piles at CSBC, Taiwan Welding of leg sections Export cable power core HV-tested Transition Piece of jackets are being completed and ready for Transition Pieces mated with upper jackets final paint coat. 40
Slide 41: Hai Long Construction Progress - Photos
Hai Long Construction Progress - Photos Onshore Substation: Construction advancing with expectation to be completed in 2024 Topside and jacket foundation for HL2 and HL3 offshore substations progressing as per schedule. 41
Slide 42: Northland Equity Research Coverage
Northland Equity Research Coverage Current Equity Research Coverage Northland’s Value Proposition Broker Analyst Name Rating Date Rating Target Price Strong and disciplined investment approach RBC Capital Markets Nelson Ng 27 Sep '23 Buy 31.00 Desjardins Securities Brent Stadler 25 Sep '23 Buy 33.00
Slide 43: Forward looking statement
Forward looking statement This written and accompanying oral presentation contains certain forward-looking statements which are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for
Slide 44: Reporting of Non-IFRS Financial Measures
Reporting of Non-IFRS Financial Measures This presentation includes references to Northland’s adjusted earnings before interest, income taxes, depreciation and amortization (Adjusted EBITDA), free cash flow, and applicable payout ratios and per share amounts. These measures are not prescribed by Int
Slide 45: Northland Power Investor Relations
Northland Power Investor Relations Email: investorrelations@northlandpower.com 30 St. Clair Avenue West, Adam Beaumont, VP Finance 3rd Floor Dario Neimarlija, VP Finance Website: northlandpower.com Toronto, ON Canada M4V 3A1 +1 647-288-1019 45
Northland Power — Investor Presentation (October 2023) on 6ix