Breaking Ground on the 130MW La Lucha Solar Farm

Q: Why did Northland Power decide to operate in Mexico?

A: Northland is a global energy company. We are a publicly listed company in Canada and we have over 30 years of experience. In the Latin American market, we operate in two main countries: Mexico and Colombia. In the latter, we own a utility that was purchased last year. We have been operating in Mexico for more than six years and are happy to finalize our first project here, La Lucha, a 130MW solar farm in the northern part of the country. We chose Mexico because of its fundamentals. It is one of the biggest Latin American economies and it is located next to the United States, the biggest economy in the world. Due to its economic and demographic growth, it makes sense to do business in a country like Mexico. Other factors include the country’s high quality and level of natural resources for wind and solar energy.

Our first investment in Mexico was a solar project but we are committed to Mexico and are trying to increase our pipeline in wind energy as well. Nonetheless, we are happy with the progress and the path that we are establishing in the country.

Q: Where does Northland Power identify opportunities within the changing renewable energy environment in Mexico?

A: We are trying to establish a strong pipeline in the country, both in generation and commercialization of energy. We believe that energy investment in the sector is still necessary. There is opportunity for the Mexican private sector to contribute with expertise. We think there is opportunity to work together and foster growth toward an energy transition in the country. Northland believes it can bring value and provide efficiency, as well as cost-effective options to the market.

Q: How does Northland’s qualified supplier unit add value to the company’s operations in general?

A: The liberalization of the market created supply opportunities for big consumers in the C&I segment. We saw the window of opportunity open and decided to move in and take advantage. For a generator like us, it made sense to close the circle and have an arm that could provide services, energy and other related products to end users. It complements the power-producing arm, allowing us to provide benefits around the entire value chain barring transmission, which is in the hands of the state. Being an effective operator and supplier can put us in a leading position in Mexico.

Q: What are the characteristics of Northland’s La Lucha project and how did it come about?

A: The project is in the final stages of construction. This is a very important project for Northland. It is the first project in Latin America that we developed and built. It will be operating in the months to come. It is a 130MW project located in the state of Durango. In the coming weeks, the solar farm will start producing energy. Another point to highlight is Northland’s social commitment surrounding the project. La Lucha interacts with a number of communities in Durango. We have been paying a great deal of attention to these stakeholders because bringing advantages and value to the communities surrounding our projects is one of our core values.

Q: What would be an example of the company’s work toward its social commitment?

A: We have been very focused on supporting the local communities during the construction phase of the project and this will continue as the project moves into operations. During the peak of construction employment, we had over 51 percent of the total employees coming from the local communities.  We initiated programs to provide donations of wood to local communities for use in home construction, furniture building, livestock fencing and other home and farm uses.  We provided materials and equipment to improve local infrastructure.  We were also involved in providing materials and education for a local community recycling program initiated by local schools.  More recently we have supported several workshops to teach local people new skills which they can use to earn an income.  Now we are working on initiating some other workshops for the same reason.

During the COVID-19 pandemic we provided over 1,600 food pantries to local people to assist with food security.  We also provided over 4,000 bottles of hand sanitizer gel to local people since some areas have limited access to regular running water.  We were pleased to supply infrared thermometers for use at road check points and local community hand washing stations.

Our relationship with the local communities is based on trust, respect, openness and support.  Communications is key to the relationships so, for instance, we have regular communications with the communities, meeting with them on a weekly basis to exchange information and discuss any issues. This approach allows issues to be resolved quickly. We have a social team that is focused specifically on these relationships. Under the rationale of the project and the business in general, we are happy to help the community where we can, and we work hard to maintain strong relationships.

Q: What are the company's short-term plans?
A: First of all, the goal would be to energize and achieve commercial operations for the company’s La Lucha project. This should be happening in late 2020 or early 2021. Furthermore, the idea is to grow organically in both businesses, strengthening and fulfilling stages on the side of development in order to bring more projects to the construction phase. We also want to position the brand NP Energía, which is our Qualified Supplier, as a leader in the wholesale electricity market.

Q: How do you think Joe Biden’s victory in the US will affect the energy transition in Mexico?

A: I think it is still too early to say what Joe Biden’s victory could mean for Mexico. For renewable energy, his message seemed clear: adopting the Paris Agreement as a policy goal. It is true that there will be a greater environmental approach to that administration, but I also think that it will be focused on a multicultural and multinational approach. In the end, renewable energy is a progressing trend worldwide. China and the European Union are already committed to net-zero carbon emissions. Both fundamentals and the rationale of renewable energy are quite strong in the country.

Northland Power develops, builds, owns and operates renewable energy infrastructure assets in North America and Europe, among other regions. The company incorporates wind, natural gas, biomass and solar technology.