Algonquin Power Plans to Sell $1 Billion in Assets

Researched by Industrial Info Resources (Sugar Land, Texas)--Algonquin Power & Utilities Corporation (NYSE:AQN) (AQN) (Oakville, Ontario) has announced it is targeting US$1 billion in asset sales, in order to strengthen its financial standing. The power utility remains committed to its energy-transition strategy. Industrial Info is tracking US$3.72 billion worth of projects from Algonquin Power in the U.S. and Canada.

In a January 12 press release related to AQN's latest investor call, Arun Banskota, chief executive officer, said: "As markets continue to evolve, we must address the challenges facing the business ... These include taking steps to realign our capital allocation, reduce capital expenditures, refocus the portfolio...."

But he added that the company remains committed to its "long-term energy transition strategy, including the pursuit of the Kentucky Power Acquisition ... Our track record of operational excellence and portfolio of high-quality assets across our regulated and renewable businesses, coupled with the actions we are announcing today, are expected to enable the Company to capitalize on industry tailwinds."

The company said its acquisition of American Electric Power Company Incorporated's (NASDAQ:AEP) (AEP) (Columbus, Ohio) Kentucky Power (Ashland, Kentucky) utility and its transmission assets, is still pending, after the U.S. Federal Energy Regulatory Commission (FERC) on December 15 denied its approval.

AQN did not say whether it plans to appeal the decision or amend the deal, but just that "the parties plan to continue to seek FERC approval of the Kentucky Power acquisition."

Still, AQN is planning a capital expenditure (capex) budget of US$12.4 billion for 2022 through 2026, most of which is allocated for renewable-energy development. This represents a net $3 billion increase from Algonquin's previous $9.4 billion plan for 2021 through 2025.

Its greenfield development pipeline includes more than 3,800 megawatts (MW) of wind and solar opportunities and about 1,700 megawatt-hours (MWh) of battery-storage opportunities.

Among AQN's active projects is the $240 million Carvers Creek Solar Plant in Gloucester, Virginia, which would generate 150 MW from photovoltaic (PV) modules provided by NEXTracker, a subsidiary of Flextronics International Limited (Singapore). DEPCOM Power Incorporated (Scottsdale, Arizona) is providing engineering, procurement and construction services. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for the detailed project report.

Meanwhile, in Canada, AQN's $250 million Blue Hills Windfarm near Herbert, Saskatchewan is in the final commissioning stage. The project, which is being developed through its subsidiary Liberty Power, is expected to wrap up in February. The windfarm is designed to generate 177 MW from 77 turbines provided by Siemens Gamesa Renewable Energy (Zamudio, Spain). Subscribers can click here for the detailed project report.

During the company's third-quarter earnings call, Chief Financial Officer Darren Myers said, "Looking to 2023, we expect pressure from increasing interest rates and broader macro-economic conditions to impact our earnings." Algonquin reported a net loss of $195.2 million for the third quarter, compared with a loss of $27.9 million for the same period in 2021, as the company faced rising interest rates and other negative economic conditions. For more information on this and some of AQN's other project activity, see Industrial Info's November 15, 2022, article - Algonquin Power Faces Interest Rate, Economic Headwinds.

Subscribers to Industrial Info's GMI Project Database can click here for a full list of detailed project reports attributed to AQN and its subsidiaries.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).