Life's a Breeze
November 22, 2007 | MARK SCHATZKER | The Globe and Mail
Four years ago, investment banker John Douglas moved from the high-stakes world of Bay Street to the high-risk world of alternative energy. Operating out of his home, he launched a wind farm company, Ventus Energy, and is now working on 25 wind-generating projects in six provinces. In July, he sold Ventus to Paris-based energy and gas giant Suez SA for $124 million. But Douglas isn't going anywhere for now. He may not be the owner any more, but he's sticking around to run the shop.
WHAT MADE YOU MOVE FROM INVESTMENT BANKING INTO ALTERNATIVE ENERGY?
I saw it as a great opportunity--it's good to be early on a new trend. At the time, utilities weren't buying wind power, but there was a lot of policy development going on, and governments were saying they wanted, say, 5% or 10% of energy production to be renewable by 2012. Things were starting to happen.
IS THERE MONEY IN IT?
If you have a long-term view of supply, wind power is more competitive than any fossil-fuel-based energy. For starters, air is free. Plus, wind power gives people an opportunity to de-risk themselves from fuel prices. When we signed a 20-year agreement with Summerside, PEI, last year, the mayor stood up and said, "In an environment of rising energy prices, the chance to fix the price for 20 years is a no-brainer." The fact that it was green energy was a bonus.
HOW MANY GENERATING PLANTS HAVE YOU BUILT?
Two-- both in PEI. The first is a small facility that generates nine megawatts. The second has the capacity for 99 MW, and so far 20 MW is already online. We're hoping to begin construction on a 100 MW plant in Thunder Bay by the end of the year.
So how much power is that? Our 29 MW in PEI produces enough energy to power 10,000 homes annually. Including the Thunder Bay plant, we expect to produce at least 300 more megawatts by the end of 2009. That's enough energy to power more than 100,000 homes.
HOW DO YOU THINK CANADA WILL BE MEETING ITS ENERGY NEEDS IN 50 YEARS?
I believe it'll be a portfolio approach. There's a place for nuclear, for fossil fuels and for renewable energy in all its forms: biomass, solar, wind. Canada could be targeting 20% renewable energy in the next 20 years. We could easily reach that.
SO, WHY SELL?
I get that question a lot. We really had no choice. We were victims of our own success. Our two PEI projects alone cost more than $250 million, and we have 23 more under way. That's a lot of money--more than we would be capable of raising, either privately or publicly. There are not many IPOs in Canada bigger than $100 million, and in the next few years, we're going to need at least a billion. At the end of the day, this was the best approach.
DID YOU GET WHAT YOU WANTED?
I think we got a fair price. Everybody made a return. People who invested early made a very good return.
IF YOU COULD GO BACK AND DO IT ALL AGAIN, WHAT WOULD YOU DO DIFFERENTLY?
I've given up trying to second-guess myself.
HOW DID YOU CELEBRATE THE DEAL?
I haven't actually celebrated it yet. But we plan to take our kids to Disney World.