 | Ross Beaty, the founder of Alterra Power Corp (TSX: AXY), spoke with Metals News at the recently held Renewable Energy & Mining Conference in Toronto. He said, “I’m a geologist based in Vancouver. I’ve been involved in the resource industry my whole career. I’ve built and sold a lot of companies including Pan American Silver and Alterra Power, both of which I was the founder and now the Chairman of the Board.” |
Alterra Power is a different type of enterprise from Pan American Silver. Beaty said, “Alterra Power is a clean power company in geothermal, hydropower, wind and solar energy.” The company, with holdings in several different countries, is solely focused on renewable energy sources. Said Beaty, “Alterra is a Vancouver based public company. We produce clean power in British Colombia, Iceland and Nevada.”
Their
holdings produce different types of energy in different markets. Said Beaty, “Specifically, we have two hydroelectric
plants in BC and the largest wind farm in BC.
In Iceland, we operate a geothermal
power company that produces 175 megawatts.
In Nevada, we own a company that produces 10 megawatts. In total we produce over 600 megawatts and we
own 315 megawatts.”
The goal in developing the company is to create
renewable energy for the long term.
Beaty said, “We have a sustainable model that will keep us around for
many decades to come.” Guided by their management, Alterra Power has quickly become
a noted name in renewable energy. Beaty
said, “Alterra Power is a public company.
I’m a large shareholder myself.
We have a strong board.” Alterra Power sells to two different types of
buyers – utilities and private buyers.
Beaty said, “We sell primarily to utilities. In Iceland, we sell the power ourselves. We also sell to an aluminum smelter which
uses our power for their operations.”
Beaty
doesn’t see any of these power sources as being the solution for every
circumstance. In fact, he quickly cites
the positive and negative aspects of both.
Said Beaty, “Every one of those renewable energy options has advantages
and disadvantages. Geothermal is base load
and can run at a very low operating cost.
It can be risky because it can be hard to find a place where you can
sustain an operation, and it has high construction costs. It works in certain places, but it is a
limited application. For hydroelectric,
we use run of the river power.” The
company has recently moved into the solar market as well. Beaty said, “We have just acquired an
interest in a solar power business with GE and we hope to expand that
soon. It can now be grid competitive in
many parts of the world. It is
intermittent. You have to deal with
that.”
Despite the challenges of the market, Beaty
believes that clean energy is the way to move forward. He said, “I started a renewable energy
company because I think of it as the future.
Oil, gas and coal have a limited future.
Plus you pollute the atmosphere.
There are all sorts of issues with fossil fuels. Renewal energy goes
forever and is clean, but it is expensive and you have to invest a lot up
front. Long term, renewable energy is
the only way.”
Beaty
believes that the mining sector is beginning to understand the positive aspects
of renewable energy. He said, “It is
very interesting today that we are at a conference which is called the Renewable
Energy & Mining Conference in Toronto.
Ten years ago renewable energy was an experiment. The revelation is that renewable energy does
bring down costs. Anywhere that there is
diesel or grid power you can easily find renewable energy solutions that are
cost competitive. It is being embraced.” With the acceptance of clean energy, Beaty
sees more and more companies taking advantage of the technology. He said, “The amount of energy that is being
used today is a lot more than five to ten years ago. We do have a headwind today in the decrease
in natural gas prices. It is very hard
to compete with low gas prices. That
will be a relatively short term thing. Medium term, gas prices will go up which will
make renewables more interesting.”
Alterra Power is in an enviable position for the
future. Said Beaty, “Alterra Power has
an enterprise value of $450 million dollars with a market cap of $150 million
dollars. We have a very low price
compared to our asset value. The market
is not recognizing us for the specific price of our assets or enterprise
projects. We are seeking to change that
with better communication in the near future.”
Beaty and his team believe that with more information in the market,
potential shareholders will see the possibilities for profit. He said, “Over time, we think the market will
value us more correctly. We are the
right kind of company to invest in.”
Why should
investors evaluate Alterra Power? Said
Beaty, “We are a clean energy company with a long term, diversified base of
producing power assets and a strong development pipeline. We offer a good value
proposition. We are trading at a
fraction of our value. We have a huge
pipeline of wind and geothermal assets that will be developed over the next few
years and we aren’t getting any value for our management team. We have a strong finance and development team.
This human resource asset has been completely discounted.”
Alterra
Power, with a diversified portfolio of geothermal, hydroelectric, solar and
wind power assets, is in position to create value for shareholders in the
future.