Opinion: Window of Opportunity for Geothermal Investment (Ivey Business Review)
Borealis GeoPower (Borealis) is a Canadian company working to build Canada’s first geothermal power plant. The company has two active projects in British Columbia (BC): one at
Lakelse Lake and another at
Canoe Reach. The company is currently undercapitalized and lacks the internal capabilities necessary for successful project development, such as capital budgeting, legal counsel, and procurement. As its Canoe Reach project transitions from resource characterization to project development, Borealis should seek a joint venture with a larger partner who has the capabilities that Borealis is missing. Borealis needs to act quickly however, because the window of opportunity for gaining the right partner is closing.
Industry insiders size the total opportunity for geothermal power generation in Canada as magnitudes higher than is likely to be created in the next decade. BC Hydro has estimated the number as high as 700 MW, and CanGEA even higher at 5000 MW. No matter what the vision is for the industry, geothermal must first prove its viability in Canada to increase investor appetite. Using large capital partners that derive external non-financial benefits from the project, Borealis will be able to reduce its development risk, increase its development capability, and successfully construct Canada’s first geothermal power plant.
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