Northland Power Inc. (NPI.TO) Earnings Call Transcript & Summary

[Presentation] Good morning, and good afternoon to everybody in Europe. Welcome to Northland Power's 2025 Investor Day. Thank you for joining us in the room and on the webcast. My name is Adam Beaumont, the Head of Capital Markets at Northland. And on behalf of the team, we look forward to providing you with an update on the business and our new strategy going forward. Today's presentation is being recorded and will be available on our website. Before we begin, we want to remind participants that all figures presented are in Canadian dollars unless otherwise stated. And to caution information presented and responses and questions may contain forward-looking assumptions and are subject to various risks. Actual risks may differ materially from management's expected results, please read the forward-looking statements section of this morning's press release and be guided by the contents when making investment decisions. We acknowledge the land we are on today is the traditional territory of nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, the Wendat peoples and is now home to many diverse people. We also acknowledge that Treaty 13 with the Mississaugas of the Credit. The presentation today will begin with Christine Healy, President and CEO, who will be joined by Ian Pearce, our Board Chair and members of the leadership team, Jeff Hart, Pierre-Emmanuel Frot, Toby Edmonds and Calvin MacCormack. The presentation will be for 2 hours, including a 15-minute break. And at the conclusion of the formal presentation, we will have a question-and-answer session where those in the room can ask questions and those online as well. Equity research analysts and investors are welcome to join us for executive roundtable discussion following lunch starting at 12:45. Thank you very much for being here. And with that, I will turn it to Madison Golshani, one of Northland's rising talent to provide a safety moment. Madison?

Good morning. Before we begin our formal presentation, we will start with a brief safety moment on building evacuation procedures. In the event of an emergency, The Globe and Mail Centre is equipped with alert tones, there are no planned alarms for today. So if you hear these tones, please stand by and prepare to evacuate the building. One ping indicates there's an alarm condition in the building, but does not impact this floor. Continuous tones indicate there's an alarm activated that will require evacuation. In the event of building evacuation, please follow these safety procedures: leave the floor via the stairwells located on the south side of the floor, do not carry items such as coffee cups, purses or backpacks down stairwells during evacuation. Do not attempt to use the elevators. Once you've exited the building, proceed south to David Crombie Park and await further instruction. In the event of a medical emergency, there is a defibrillator located on the 16th floor as well as the ground floor of the building. Of course, our Northland team are here to provide you with any support you may need. Covering off a few final housekeeping reminders, washrooms are located on either side of the elevators and signages located on the walls to help guide you. We are serving light snacks during break and grab-and-go lunch following the conclusion of today's presentation. Coffee, tea and refreshments are available at the Southside bar. Now I'd like to welcome our President and CEO, Christine Healy to the stage.

Thank you. Good morning, everyone. It's good to be here with you today. This has been a year of real progress at Northland and also a year of real challenges. We've made difficult decisions. We've navigated unexpected developments, and we've worked through them with one clear purpose: to strengthen Northland and put the company on a more sustainable footing for the long term. Since joining in late January, I've had the opportunity to see firsthand how we operate, meeting our people, our investors, our partners, our suppliers, our communities. And what I've seen reinforces my confidence in this company, the strength of our operations, our ability to execute world-class projects and the depth of expertise across our teams. This capability, combined with our international reach, positions us to deliver. And our focus is clear. We deliver on what's in front of us. We strengthened the business. And from that solid foundation, we build value for shareholders. At Northland, we bring a proven track record of delivering projects and operating assets across multiple technologies and markets. We are diversified across technologies, onshore and offshore wind, solar, natural gas-fired power and grid scale battery storage, supported by 3.5 gigawatts in operation and 2.2 gigawatts in construction. More than 95% of our revenue is contracted, giving us revenue stability. And we have a legacy of execution that comes from our leadership. Every day, our people deliver safely, reliably and with discipline. This foundation is key. It gives us the ability to deliver and the confidence to strengthen the business for the long term. Northland generates and stores electricities in several markets. Let me take a moment to talk about how we build and operate our facilities because this is core to how we deliver. First, renewable generation. Our onshore wind, offshore wind and solar-powered facilities generate clean electricity when the resource is available. Output can, of course, be variable, and we plan and operate accordingly. We manage this variability through two levers. The first for us is operational readiness. We ensure that we are available so that when the wind blows or the sun shines, we are ready to capture it. Our other lever is geographic diversification. By operating in different regions, we balance risk of low resource in one geography with higher resource in another, smoothing production across the portfolio. We also have 700 megawatts of natural gas-fired plants, both simple cycle and combined cycle. These facilities were originally built for baseload, but their function has changed and now they operate as peaker plants to respond to times the system needs dispatchable available power. This reflects our view at Northland and frankly, the reality of our markets that natural gas remains a key part of the energy mix for decades to come, particularly in Canada where natural gas resources are abundant and responsibly produced. Natural gas is an affordable, reliable part of a clean, balanced energy grid. We have also expanded into grid scale battery storage. These facilities provide fast response during demand surges and enhance grid stability. They are an excellent complement particularly in systems reliant on renewables. This multi-technology approach sets Northland apart. While many peers focus on one or two verticals, our ability to combine renewables, storage and flexible gas gives us resilience optionality and a more stable platform for long-term value. We'll talk more about that later, but I want to pause here to talk about safety. Because it's a core value at Northland, and it is our highest priority, one of the first things I did this year was safety site visits at our project sites and operating facilities around the world and I've been able to see firsthand the strength and importance of our safety culture. And I'm proud to share with you two examples from this year that reflect our commitment. Our regulated utility in Colombia, EBSA, was awarded first place at the 16th National Electrical Rodeo. You might not know what an electrical rodeo is but this is a competition in Colombia, where operators from different companies compete on technical capabilities and safety. So if you are the fastest, but it is unsafe, you cannot win. You have to be good and you have to be safe. The event brought together teams from across the country to share best practices, exchange knowledge and foster nationwide collaboration. We took first place, we are also the founders of this competition in Colombia, and we are proud of this accomplishment. Our Oneida energy storage facility, which is highlighted out in the hallway when you're getting your coffee, here in Ontario, Canada was awarded a safety award by the Ontario Electrical Safety Authority as a champion of change. The award recognizes that our safety-first mindset from before day one of construction resulted in zero lost time incidents. This is a record we are extremely proud of. I do want to say a few words about sustainability because at Northland, we are committed to lowering emissions intensity across our portfolio. This has been a part of our strategy for many years and it continues to guide our decisions as energy systems evolve. As long-standing experts in clean power, advancing renewables is a core part of the global energy mix that Northland can play a key role in. We continue to grow our renewable generation footprint, onshore and offshore wind, solar and storage, which remains central to energy transition. At the same time, we understand the importance of a balanced reliable energy mix, and our diversified portfolio allows us to support decarbonization while ensuring the grid remains stable and affordable. We also help corporate customers meet their emissions goals by supplying them the clean electricity to support their decarbonization commitments. As energy demand continues to grow, natural gas remains an essential transition fuel for decades to come. We will continue to pursue new natural gas opportunities because they enhance system reliability and meet customer needs. They also match our sustainability goals. We do this because it's necessary for a resilient grid and it is fully aligned with our commitment to sustainability. So let's talk about where we are today. Northland, as many of you know, has a strong history. I joined this company in large part because of its track record of delivering meaningful projects in Canada and around the world and because of the strength and commitment of its people. This year, we have made important progress to strengthen our foundation and our strategic position. Earlier this year, after I joined as CEO, we welcomed Jeff Hart as CFO, and Ian Pearce as Chair of the Board. Jeff brings broad experience in financial leadership in capital markets, including serving as CFO at two large Canadian energy companies. Ian brings more than 40 years of global experience in engineering, project execution and executive leadership, including COO and CEO in major resource organizations. With these leadership changes, we've remained focused on executing our three major projects under construction, a clear demonstration of both execution capacity and discipline across our teams. We successfully delivered Oneida, Canada's largest battery energy storage project ahead of schedule, under budget, zero lost time incidents. In Poland and Taiwan, we continue to advance our two large offshore wind projects. As we discussed last week, the commissioning of the Hai Long project has progressed slower than anticipated but the project remains on track for completion in 2027. More detail on that will be provided later this morning. Our strategy is focused and disciplined. We are sharpening capital allocation, and we are prioritizing projects that offer the best execution and the best returns. Recent examples include our acquisition of two ready-to-build battery storage projects in Poland announced earlier this morning. And the development of Collisard, a small natural gas facility in Alberta, you'll hear a bit more about later. We'll talk about both of these projects today as well as many of the other projects being advanced within Northland. These are projects delivering high value aligned with our strategy of deepening in our core markets. These investments reflect our commitment to strengthening the business and positioning Northland for reliable, long-term growth. Before we move forward, I want to speak briefly about our announcement last week regarding the dividend. I know that this has impacted many of our long-term shareholders. As I said last week, and I will say again, this was not an easy decision. We evaluated a full range of alternatives, including debt financing, asset recycling, equity issuance and an enhanced strip. Over the 5-year planning period, with our most current price forecasts and availability forecasts, we could see that our payout ratio was averaging around 90%. Against that backdrop and with large construction projects still underway, we saw that it was prudent to maintain a strong balance sheet and preserve flexibility until the projects are complete. At the same time, we see attractive accretive growth opportunities in front of us, and we want to be in a position to pursue them responsibly. Ultimately, this is the right decision for Northland. It allows us to maintain balance sheet resilience, reduce reliance on volatile capital markets and allocate capital towards the best opportunities for long-term value. Throughout this process, our purpose, my purpose, our collective purpose has remained the same, to deliver the best value for shareholders over the long term and everything we're laying out today reflects that purpose and positions Northland to move forward with discipline and strength. In recent months, we have identified value-accretive opportunities, and we've brought two of them into our portfolio. Earlier this morning, we announced the acquisition of two late-stage battery storage projects in Poland. This year, we also added Collisard, a small natural gas project in Alberta that will provide reliable, flexible generation. Toby and Calvin will give you more information about these projects shortly. Beyond these new investments, we're advancing several value enhancement initiatives across our existing fleet. This focus on uplifting the value of the assets we already own is something I've prioritized since I arrived here at Northland. And you'll hear more about these opportunities throughout the day. But before jumping right into it, I'd like to welcome Ian Pearce, our Chair of the Board, to share a few remarks. Ian?

Thank you, Christine. Christine joined Northland earlier this year and brings over 25 years of senior leadership experience in energy and infrastructure development across different regions. Since joining, she is focused on enhancing execution, increasing operational discipline and refining strategic priorities. These initiatives are currently underway, and the Board is monitoring progress against these defined objectives. As Christine noted, the Board approved an adjustment to our dividend policy last week to improve financial flexibility and align capital allocation with current market conditions and our growth pipeline. This decision was made with careful consideration of all shareholders' interest. The revised dividend level reflects the realities of the industry cycle and supports a more sustainable financial framework. Moving towards a self-funded growth model is intended to reduce reliance on external capital, improve balance sheet resilience and support long-term value creation. The Board of Directors includes members with deep experience in finance, energy markets, major capital project oversight, capital markets and corporate governance with perspectives. I'd like to take a moment to recognize and thank the rest over the Board. Doyle Beneby, Sébastien Clerc, Lisa Colnett, Kevin Glass, Keith Halbert, Christine Healy, Helen Mallovy Hicks, Eckhardt Ruemmler and Ellen Smith. Together, we are building on a solid foundation and positioning Northland for an exciting and sustainable future. We look forward to the journey ahead. Thank you.

Thank you, Ian. So let's talk strategy. Today, the global power sector is changing, and we see strong fundamental shifts that are shaping the future of electricity, particularly in our markets. Electrification across transportation, buildings and industry is driving sustained growth in electricity demand. We're also seeing that economic expansion and rapid digitization is adding new structural loads. Historically, electricity demand generally tracked GDP. And today, new uses are being layered on top of that baseline. AI, data centers, EV adoption, rising air conditioning demand, continued industrialization, electrification of systems. This is all contributing to long-term demand growth. Geopolitical uncertainty has also elevated energy security and affordability to the top of policy agendas for governments around the world. Across many of our markets, this is increasing demand for domestic generation from gas-fired power to renewables to grid-scale storage. And decarbonization remains a driver. Policies in Europe and Canada continue to support investment in clean generation. Certainly, in places where the resource exists, it makes sense to develop it. But of course, no market is perfect. And alongside these wonderful opportunities, we see pressure. Pressure for lower power prices, supply chain challenges, evolving regulatory frameworks, all of which require careful navigation. This is where disciplined companies will differentiate themselves. Those that are crisp on capital allocation, selective in their investments and focused on long-term value creation will emerge stronger. While forecasts differ, one thing is clear, Global demand for electricity is growing. The IEA recently increased its outlook, projecting electricity demand to rise more than 34% by 2035. While the global picture is helpful, Electricity demand is not met globally. It's met locally. And the solutions for Toronto, Ontario are different than the solutions for Warsaw, Poland. Each market has its own resource mix, policy environment, and regulatory needs. For example, Poland still relies heavily on coal. Ontario has a significant nuclear base. Other markets are expanding renewables rapidly but need firm capacity to balance the intermittency. In all of these environments, growth technologies need to be paired with solutions that ensure reliability, whether transitional or baseload. At Northland, our diversified capabilities allow us to deliver across these needs and this gives us a strategic edge. Our customers and system operators increasingly want all of the above solutions. And our flexibility allows us to adapt for their reliability requirements, policy changes, grid constraints and evolving technology preferences, all while managing risk and sustaining returns. Each of our technologies plays a role in this solution. And together, they leave us well positioned. This diversification is a core strength. It stabilizes earnings, supports disciplined growth and enables us to deliver value across different market conditions. Looking ahead to 2030, we have outlined clear strategic initiatives and financial targets that will guide our organization. You will hear more on each of these shortly, including how we intend to meet them. I'll focus on the key drivers of our projections, and Jeff will speak later about the financial metrics that support them. But let's start at the top. Over the next 5 years, we expect to double our operating capacity to 7 gigawatts. Within that, we are targeting 1.4 to 1.8 gigawatts of new capacity growth. Our funding plan over the next 5 years requires approximately $6 billion in total gross investment. Our strategy is anchored in value creation. We will pursue only those projects that deliver levered after-tax returns of at least 12%. To meet these targets and maintain our competitive edge, we are also targeting cost efficiencies across G&A, across our development organization and through our operations and we are restructuring our teams from technology silos into regional hubs, resulting in a $50 million sustainable savings by the end of 2028. Jeff will have more to say about these measures. Based on these drivers, we are targeting a 6% compound annual growth rate in free cash flow per share through 2030, resulting in a projected range of $1.55 to $1.75 per share. So how are we going to achieve this? We will stay focused on our three strategic pillars: deliver, strengthen, grow. This framework brings the focus and the discipline needed to stay on plan and build shareholder value. Deliver is our foundation. We operate with excellence with safety as a core value We complete our projects as planned, and we are the trusted operator for our partners and our stakeholders. We focus on what we do well, and we continually raise the bar. Strengthen. This is where we are making a better Northland. We are streamlining the organization, improving efficiency and driving cost savings across the corporate functions, but also in the operational assets. We're drawing on best practices from across the sector, identifying the technologies that improve our performance, our reliability and our value. And grow. We will pursue value-accretive growth by prioritizing our core markets, high-grading our pipeline and enhancing value across our existing fleet. Everything is underpinned by disciplined capital allocation. We will advance only the highest return opportunities, and we review every project regularly to determine whether it merits continued investment. Before we get into growth, I do want to spend some time on deliver and strengthen because this is how we create value today and build the foundation for the value of tomorrow. At Northland, we are proud owners and operators. We construct and operate assets to drive long-term value. We bring decades of experience, and we have a strong track record of delivery. We achieved this through strong scenario planning, an agile, empowered supply chain, experienced local teams who are empowered to make decisions and a one-team approach with suppliers partners and joint ventures. We also apply a full life cycle mindset, making decisions today that protect value tomorrow. For 95% of our production, our revenue is contracted today. As those contracts roll off, though, we can expect that new pricing contracts may be lower. And that means our OpEx and reliability have to drive value, and we are positioning ourselves to be able to do just that. So strengthening our core is fundamental. Simple effective organizations make better decisions and that translates into better cost structures and greater shareholder value. The best companies are those that reduce costs and deliver the best value. To that end, we have launched three initiatives in Northland focused on sustainable cost savings. These programs have already launched and together will achieve $50 million in annual savings by the end of 2028. And those are sustainable annual savings. Through these programs, we're taking three complementary actions. Number one, we're optimizing our organizational design. We're shifting from a technology model to a geographical model. We're centralizing project delivery. Every dollar of development capital competes on equal terms across all of our markets. There are no pockets reserved for any geographies, every project competes with every other project. And then improving operational performance across the fleet. The teams are already delivering results, but we see there is more to go that we can be even better than we are today and drive more value from the existing fleet. Jeff will have more to say about this in his section. So on the organization, we're shifting from technology business units into strategic regional hubs, one for the Americas and one for international. This better aligns people and resources with our core markets and enables us to deliver multi-technology solutions efficiently. Our new structure streamlines the organization scales our expertise, eliminate duplication, deepens capabilities and strengthens our competitive advantage. You can see in the middle of the circle on the right there, we've also created a centralized project development and delivery office. This team will be responsible for deploying capital to the highest return, fastest-moving projects. This positions us to leverage scale, share learnings and strengthen our local relationships, all supported by disciplined capital allocation. So along with that new structure, I'm pleased to announce our new leadership team. In addition to Jeff and me who you already know, Jaime Hurtado Cola is our newly appointed General Counsel. Jaime, are you in the room? There's Jaime, thank you very much. He leads our legal strategy, risk management and corporate governance functions; Rachel Stephenson, our Chief People Officer. Hi, Rachel. She leads our global HR strategy, including talent development and organizational culture; Pierre-Emmanuel Frot, who continues to lead in health and safety and will be responsible for the new centralized project development and delivery function; Calvin MacCormack, who will lead our Americas hub; and Toby Edmonds, will lead our international hub. These gentlemen will lead our global operations and growth initiatives. So I turn now to grow. We look at growth in three lanes: value enhancement opportunities, our organic pipeline and asset acquisition opportunities. So let's start with value enhancement. We can extract more value from the assets we already own through capacity upgrades, repowering, hybridization, contract extensions. We have dedicated teams identifying short-cycle, lower-risk, high-return opportunities. And as of now, 6 initiatives are moving through our investment process. There have been more ideas than these first 6. Some of them require additional work to understand the scope of the opportunity. But the best 6 are now our focus, while other opportunities need some more time to mature. Within our organic pipeline, this is our engine of long-term growth. We advance projects through a disciplined decision gate process. Every project in the funnel is regularly assessed regarding timing, economics and strategic fit. Only the strongest opportunities progress. And the third tranche there is acquisitions. We selectively add value-accretive assets like the Poland battery storage projects I've mentioned earlier. And we're in dialogue on numerous other opportunities in our core geographies that fit our strategy. Should they meet our requirements and drive more value than opportunities were advancing today, they will move into our pipeline. We're making smart choices to deliver sustainable focused growth over the next years. When Hai Long and Baltic Power come online in 2027, Northland will be a fundamentally different platform. By 2030, we plan to double operating capacity to 7 gigawatts, requiring us to bring 1.4 to 1.8 gigawatts of new projects into commericial operations. And so we're building platforms and markets with strong fundamentals. Our Poland storage acquisitions are one example. Near term our focus is on natural gas, onshore and battery storage. Offshore wind will follow later in the decade aligned with market conditions and opportunities. Growth must be paced. Sequencing our major projects reduces risk, focuses capital and ensures resources are applied where they create the greatest value. So in addition to how we select for projects, many of you have asked me about Northland's approach for how we select our markets, how do we make decisions for our locations and which technologies apply in those locations? And there are two major components to this at the top level of market selection itself and then the lower level is the investment screen. I'm going to talk about market selection now and how we apply that at Northland, and Jeff will give some more color on the investment screen portion, especially our decision funnel and our stage gate process. The funnel is an important concept, though, at Northland because not all projects will ultimately make their way through final investment decision. Only the best projects will be the ones that we invest in. So let's dive deeper though into market selection. Before we enter any market, we have to take a full view of the context, both during the contract period and afterwards. We are long-term operators. So we need to understand the markets that we're entering. So we apply three screens, a macro screen, a technology screen and a commercial screen. On the macro side, we assess a range of fundamentals. Like I said earlier, underlying GDP growth used to be proxy enough for electricity growth, but underlying GDP growth is still a relevant consideration. We also look at industrial growth, electricity demand trends. We really look at grid investment and interconnection availability. And if it is being planned into the future, how reliable is that plan and time frame. We also look at the political and the regulatory environment. These can be very significant considerations in the timing of projects. We also look at carbon and policy signals and long-term agreement pathways, whether it's in power purchase agreements or contracts for difference or other structures that governments wish to pursue. We prefer markets where contract structures are well established and where projects can be delivered reliably, both on paper and in practice. So after the macro screen, we have a look at the technology screen. And in that screen, we look to select the technology that offers the highest risk-adjusted returns in that market. And reaching that conclusion, we consider grid infrastructure, resource availability, system operator requirements as well as the long-term operations and maintenance environment. Our diversified capabilities here give us strategic flexibility. We can adapt to the resource mix, the grid and the customer needs. And then if we have made it through those two screens, we get to the commercial screen. We evaluate commercial viability of the concept as opposed to a particular project. More than 95% of our revenues today are contracted across a broad mix of government-backed contracts and corporate offtakers. That diversity is another strength for Northland because we are content to follow these different types of arrangements. We look for markets where we can deploy a structure that works for us as a company, but also works for the target jurisdiction. At the end of the process, though, the decision must deliver shareholder value or we will not pursue it. So let me make this practical. How are we applying this framework at Northland today? Based on macro demand trends and the strengths of our current portfolio, we are concentrating our efforts in core markets in Canada and in Europe. These are places where the fundamentals are strong, demand is growing, and we see that our capabilities are in high need. In Europe, we're focused on Poland, Spain and the U.K. These are markets with clear long-term electricity needs, established contracting structures and good policy support. We're also keeping a close watch on Germany as it renews its focus on industrial activity and domestic energy supply. So we're keeping a watching brief there. In Canada, we are prioritizing Ontario, Alberta, Saskatchewan and Quebec. These provinces reflect strong system needs, including onshore renewables, natural gas, storage and hybrid solution and our long-standing presence in these provinces provides us a strong right to win. I'm going to dive deeper into these in a moment, but before I do, just a quick note on Asia. We maintain a long-term view on this region beyond 2030 because we do see meaningful opportunity there. From a macro standpoint, GDP growth is strong, grid investment is significant and policy support aligns well with Northland's capabilities. Over the next 15 years, it's expected that the region is going to require more than 200 gigawatts of new power generation. It's one of the largest demand opportunities globally. And importantly, we already have an established footprint supported by strong partners in Gentari and Mitsui. So we will continue to evaluate opportunities in Asia as they mature, but we see them on a longer-term horizon than our focus right now on Canada and Europe. So let's take a deeper dive into the next 5 years, beginning with Europe, where Northland sees good opportunity with the region's strong policy support across the EU. The EU clean investment plan tops CAD 550 billion. That leaves a lot of room for investment. Across Europe, we continue to see a clear need for new electricity supply. And the specific drivers vary by market, but the trend is consistent, more demand, more renewables and more need for reliability. In Poland, Poland is one of the fastest-growing economies in the EU and a strong focus on energy security. With Baltic Power and our two new battery storage projects, we now have a strong foothold and we're well positioned for future growth across multiple technologies. We turn to Spain in the middle there. Since the blackout earlier this year, Spain has been having a really different conversation about grid reliability. With our existing fleet and our existing footprint in Spain, we are well placed to play a meaningful role in delivering the electricity and reliability that system needs. And the United Kingdom. It's a mature market with high renewable ambitions. But in addition, we see potential for rapid data center expansion driving new load growth and opening opportunities for offshore wind and battery storage. These are both areas where Northland has deep expertise. On this next slide, I'm going to take an extra few minutes on Poland because it's a standout opportunity, and we're seeing it firsthand. There are several factors that make Poland very compelling for Northland. This is a market laser-focused on energy security, affordability and decarbonization, and they are moving quickly to build out renewable generation, solar, onshore wind and offshore wind. We are already invested in an offshore wind project with a strong local partner, and we see continued potential across technologies. As the share of renewables grows in the energy mix in Poland, the need for battery storage increases, and this aligns directly with the two new projects we added to our portfolio this week. Poland meets our market selection screen. On the macro side, strong GDP growth and industrial activity, supportive climate policies, strong links and building out a further interconnection to Western European energy markets. On the technology screen, renewables are central to Poland's long-term strategy. Storage is required to balance a rapidly changing grid. And on the commercial screen, we see attractive long-term revenue frameworks including contracts for difference with 25-year terms for offshore wind, 15-year terms for onshore and 17-year storage auctions. Together, these fundamentals make Poland a highly attractive market for disciplined, selective growth. So let's turn now to our home market, Canada. Here, we see a different set of fundamentals, but strong opportunity. Canada's story is a bit unique. We already have the fourth greenest grid in the world as a country. Many provinces are very well advanced in their greening process. But electrification, industrial growth and reliability needs are accelerating. This means that new electricity supply must come online, and it must be delivered in a way that is affordable and dependable. This creates a meaningful opportunity for Northland. If we go to the next slide, Canada's installed electricity capacity today is around 150 gigawatts. And when you look at forecasts from the system operators across the country, we see demand for 70 to 100 gigawatts of new capacity over the next decade. That's a 50% to 70% increase from today. One clear opportunity in Canada lies in historically under-invested gas infrastructure with significant natural gas resources available, there's a need to modernize and expand flexible gas generation to support reliability during the energy transition. I will note that Canada can be complex from a permitting and contracting standpoint. However, with decades of experience at Northland, we know how to operate effectively in Canada across provinces. I will say though, it's important to recognize that Canadian opportunities within our Northland set of opportunities compete across the portfolio, so they compete against other global opportunities. Capital will be allocated to the projects that offer the strongest returns regardless of geography. Across many provinces, there are large procurement processes underway for new power generation and we are engaged where we see a competitive right to win and where we have projects that meet what operators are looking for. Northland also has a home market advantage with operations and projects in Ontario, Alberta, Saskatchewan and Quebec. We're actively evaluating new opportunities across Canada, and we're in bilateral discussions on several opportunities. Calvin will speak shortly about a near-term opportunity in Alberta that has potential for gas-fired generation. I will take a moment here as well on offshore wind for Canada because I continue to get a lot of questions about it. With our global scale and our proven delivery record in offshore wind. We are closely following what's happening in Canada with respect to potential offshore wind development. We continue to meet with officials at various levels of government, and we have outlined and worked with them to show what we need to see as investors. And put plainly, that's clear contract terms, definable time lines and efficient permitting. If Canada becomes competitive in offshore wind, it would represent an opportunity for both the sector and for Northland. So let's turn now to our pipeline because, as I said earlier, every dollar in our pipeline is competing globally as we continue to high-grade opportunities. At every stage of development, we evaluate projects based on maturity, risk, return, speed of delivery, whether they come from origination, value enhancement initiatives or acquisitions. This is our stage gate model. Building an active pipeline is a core focus for our management team, and it is a focus at every one of our meetings. We work to increase value and reduce risk as projects advance through the stages. And here's where our pipeline stands today. When you look here in early stage, you will see that there's some Canada onshore renewables, some Canada natural gas. These are opportunities that are currently within our portfolio that we don't name specifically because they may or may not be part of ongoing auction processes or are they may be being advanced for upcoming auction processes. There is a footnote above offshore wind Poland. There is an offshore wind opportunity in Poland that we have been working on for some time. But the Polish system requires a public auction process and that when that public auction process occurs, we will assess at that time whether this project makes sense for us. We have -- there's a U.K. offshore wind floating project here where we mentioned in previous updates that for us that this is a project that is currently on pause but we continue to evaluate whether this will be an opportunity, and we're in dialogue with government authorities in the U.K. about that. We have Southeast Asia offshore here referencing what I said earlier that we do have licenses in Southeast Asia, where we have a low-cost opportunity to retain the option for the future. We do where action is required for investment at this time. We've recently chosen to relinquish one of those licenses for exactly that reason that we don't feel the opportunity is sufficiently mature at this stage. And we also have a set of onshore opportunities in New York, which are not a priority for us at this stage. In mid-stage development, you can see that we have a Spain storage project. We have also Canada onshore renewables, Collisard natural gas, which Galvin will speak to shortly. Various Ontario projects named that way because of ongoing procurement processes and U.K. offshore wind, a fixed bottom project that we have been speaking to at several of our previous events. As that project matures, we will tell you more about it. Then in late-stage development, we have the two Poland projects that Toby is going to talk to you about in a little bit. And we do have an opportunity in the U.S. onshore called High Bridge. And then we have our three projects in construction, Hai Long, Baltic Power and Jurassic BESS. Then you see underneath that, there is an ongoing project acquisition evaluation. This is an asset acquisition type approach where we look at assets that can be value accretive in our pipeline. And then here at the bottom, you see our value enhancement projects. And here, these are the projects we have decided as a company to move forward. They currently sit in mid-stage development. And so now they are going through our capital allocation process for next year and the year beyond in order to finalize time lines for delivery. So you see there Spain storage, utilization of our transmission line, potential for repowering. We have some dialogue ongoing in Quebec around potential expansion or extension of our facilities there. We do have some opportunities across the fleet for behind-the-meter storage where it enables us a different than grid-level battery storage, which is providing grid level services behind the meter storage is simply to enable us to sell in shoulder times when we'll get access to better pricing. And then we have natural gas optimization within our fleet, and these are ways that we can drive value from what we already hold. Underpinning everything is our commitment to long-term value through disciplined capital management. The discipline gives us financial resilience. It enables rigorous capital allocation and it supports sustainable shareholder returns. So I think I've talked long enough, and I'm going to welcome Pierre-Emmanuel Frot to speak about our development and project delivery approach. Thank you.

Thank you, Christine. I am Pierre-Emmanuel Frot, and I lead our new control project development and delivery office. I hope my French accent will not be too challenging. Engineer as an education and after 25 years managing large electrical and renewable project organizations, I joined Northland Power in 2023 to lead the procurement and project management office. The purpose of this new organization structure is to drive growth centrally, managing our DevEx effectively while scaling our strength in project delivery across the company. As Christine shared, there are a lot of growth opportunities ahead. Our collective goal is to upgrade our pipeline so Northland only pursues the most value accretive projects that deliver strong returns. With this new group, we'll take our expertise and best practices and implement them across all our assets. So three core principles. First, is establishing a centralized, disciplined and repeatable process to evaluate growth projects. Internally, every DevEx dollar would compete for capital through our decision gate process. We'll assess projects using a consistent set of parameters such as feasibility, risk profile, required investment and of course, value creation and returns. Based on our assessment, development funding will be deployed to the opportunities with the best risk/reward [indiscernible 52.27] ratio. Our approach will be market-agnostic and account for the differences between technologies. We want to invest in the best opportunities regardless of which team brings them forward. A key benefit of this centralized approach is that it frees capacity for Americas and international teams to focus on their markets and assets. Overall, we are all focused on disciplined growth through projects that are competitive and meet our thresholds. Our second principle, rigorous project delivery, planning and structured due diligence happens once we confirm projects for investment with a centralized model will drive cost efficiencies while accelerating development. This will let us baseline projects and track progress through the pipeline. So we can make the right capital allocation recommendations at each gate as we continue to high-grade our pipeline. The third principle is leveraging our market and technology knowledge. Along with our global scale, combining local presence and central expertise. The new structure is designed to meet diverse market needs by deploying the most suitable technologies in a way that ensures competitiveness and long-term value. Now that I have given you an understanding of how we will deploy capital, I want to talk through our approach to project delivery. We basically follow two models, either our owner/operator or JV partners. In both models, we may have investor partners, but their role is different in the actual daily project management. Fully dedicated to Northland in the first case like for Oneida or shared like for Baltic or Hai Long. Partnering with other organization is core to our model and Northland is recognized for its ability to do so. Whether it's Canada with First Nations or with other players globally, we spend time understanding their target objectives and culture. Our goal is to align our objectives and work closely together to deliver projects successfully with few conflicts, which is testament to our strong partnership philosophy. This is an important point because it allows us to focus only on the project and not on different issues or expectations of each other, especially during difficult time. When acting as a JV partner, we spend the necessary time to build and empower one single project team, integrating the complete monetary skills of each partner with Northland playing a key role. Teams are trusted to make decisions because they are closest to the projects and know what is necessary for execution. Taking the example of Hai Long, the project team is led by Northland leaders as a project director and package manager are both Northland employees. All of this is overseen by a joint venture management team integrating Northland and its partners, representatives. Finally, we place great importance on scenario planning and tracking our project management office for delivery and cost control. We implement tools and technologies like AI to drive efficiency and understand what is in front of us and anticipate various possibilities, so we can take early action and mitigate future risk. As an example, a key challenge on project is the management of interfaces and possible knock-on effect between packages. AI can help identifying misalignment before they become an issue. While integrated data management tools can quickly provide a view on the different options available to the project to manage a delay or another event impacting the project progress. An important part of project delivery is our supply chain and the need to have very strong suppliers and contractors in our markets. Our strategy is to develop strong relationships with a short list of top-tier suppliers like our approach to partners. We want our suppliers to be aligned with the project objectives. It requires understanding their own objectives and constraints. The prime success indicator for our supply chain management is that projects are delivered on time, on budget and with expected performance. Second point is that we interact with our suppliers at different levels. From CEO down to operations, we make sure that we know the people and that our message is clear, shared underline. The human relationship of project is sometimes downplayed, but it actually plays a key role in making a project successful. Finally, we adapt our supply chain strategy to the technology: battery, solar, gas or wind, which have all a different dynamic. Being a multi-technology provider give flexibility to work on other technologies and continue to deploy capital when certain supply chains are constrained. Battery storage is a fast-moving market with rapid price deflation and technology changes and potential breakthrough innovations. We keep a constant eye on the market trends to make sure we use solution delivering the right combination of price and performance. On the other end of the scale is offshore wind, where we work with two preferred suppliers, Siemens and Vestas that give us predictability and the best value. With our good relationships, we aligned early on projects and determine a solid construction strategy to balance risk and cost. If inflation and supply limitation has been a topic for the past years, the tension seems to loosen a little, thanks to the cancellation or postponement of some projects. Gas falls in between with the supply chain defined by design. Northland's long history in natural gas, give us capability to approach projects in different ways. We have strong relationships, no time lines and can deploy solutions quickly. This is where expertise matters in the supply chain. Solar is closer to battery with many supplier options, but is a more mature market. In summary, we put a lot of importance on our supplier relationships and we ensure we maintain optionality and mitigate risk. Our suppliers play a critical role in our ability not only to deliver our projects, but to operate them and improve the performance of the assets over time, making them partners of our success is essential. With that, I will hand off to Calvin MacCormack, EVP Americas to take you through our Americas operations and how we drive the performance. [Foreign Language]

Thank you, Pierre-Em. So I'm Calvin MacCormack, EVPs for the America. I've been in the power industry for more than 30 years and with Northland Power for most of that time. Starting in facility operations, I've had tremendous opportunity to grow along with this company in lockstep as we expanded into each of our technologies and regions. All these years later, I can tell you that the same spark that drove us to succeed is not diminished. So I'm happy to be with you today to talk about this proud Canadian company founded nearly 40 years ago. In the Americas, we have 1.4 gigawatts in operation with 85% of those assets located in Canada. In addition, this portfolio contains a regulated utility in Colombia, which serves 500,000 customers. In 2024, these businesses represented 35% of our EBITDA. Noteworthy in this fleet is that the portfolio represents all our generation technology other than offshore wind. Northland was an early mover in Canada in gas, solar, wind projects. And now that innovation continues with our Oneida energy storage facility, which has just gone into operation this year and is currently the largest operating battery energy storage facility in Canada. High availability is a key standard in the power industry. And you can see here that both our natural gas and renewables fleet are performing better than the industry average. Our commitment to operational excellence is what enables us to stand out amongst our peers. So there were two key benefits maintaining high commercial availability. The obvious one is that it is positively correlated with higher revenues. The second benefit is how this high availability bolsters our reputation in market with our commercial off-takers, and it gives him confidence to work with us on new development projects. So on the previous slide, you saw a high availability, driven by our commitment to operational excellence, but what is operational excellence? Well, first and foremost, it is anchored by our people who demonstrate an entrepreneurial mindset and extreme ownership of operational outcomes. These same teams are rewarded by compensation systems that reinforce those good behaviors. Great for our employees, and great for our business. What's more? We have deep expertise and institutional knowledge in our operational teams. For example, natural gas, is 20 years. And in onshore room, 75% of our operation teams have been with the company for over 10 years. With empowered teams in the field, our management team provides support and facilitates sharing of best practice and key learnings across our portfolio. Additionally, keeping the full life cycle of the assets in view, our commercial and technical teams combine their expertise in markets power generation and performance analytics to optimize margins over the long run. And as we further scale in this market, the cost efficiency of the portfolio will only improve. Now a perfect example of our operational expertise is on display at Oneida. This is our 250-megawatt energy storage project, which we delivered this year, ahead of schedule and on budget. It continues to exceed our expectations. Oneida is one of our most dynamic assets. It's a learning asset. Through a combination of machine learning, optimization algorithms and risk management tools, this system is constantly adapting to market and grid conditions to improve its performance over time. We use machine learning forecasting to anticipate key variables, market prices, renewable generation levels, demand and grid imbalances. These forecasts feed into optimization algorithms that calculate the most profitable and reliable market strategy. So the Oneida team can decide days, hours or even minutes ahead of time, whether it should buy, sell or hold energy to capture maximum value across all streams. All of this happens under a risk-aware framework, accounting for uncertainty from forecast errors, price volatility and system status. In addition, these models integrate detailed models of battery degradation. So we're protecting the long-term health of the asset while optimizing its short-term returns. So the system is constantly learning as it accumulates data from operations, market behavior and weather patterns, it refines its forecast and dispatch strategy. This creates a powerful feedback loop, better forecast better dispatch, better outcomes, which in turn generate more data to improve the next cycle. Now as a first mover in this space, we'll be leveraging these learnings to increase our competitive advantage as we continue to drive this new business line forward in Alberta and internationally. Now as Christine discussed earlier, we're looking at driving more value from our existing asset base. In the near term in Canada, I would highlight that we are evaluating project expansions and contract extensions at our existing gas and renewable facilities. As a reminder, we recently completed one such expansion and contract extension at our Thorold facility, adding 23 megawatts, an additional 5 years of contracted cash flows. In addition, we see several noncapital-intensive -- noncapital-intensive opportunities where revenue can be increased within the existing assets. Many of our facilities went commercial in an environment where load growth was flat to nonexistent. Today, driven by growing electricity demand in the region and a renewed appetite from offtakers for additional electrons, we're advancing. The aim of these projects is to both strengthen our competitive position and market and deliver strong returns to our shareholders by focusing on shorter cycle, lower risk, higher-return initiatives that enhance asset performance and cash flow. One such opportunity that we are looking at currently is exploring expansion of our Mont Louis wind project in Eastern Quebec. It's important to note here that Quebec has moved from an oversupply of generation to a projected shortfall in the coming years. This new reality is a stock change from just a few years ago. So this project is a prime target for us for expansion due to a strong wind resource, some spare capacity in the existing substation and its proximity to Crown land. So we look forward to sharing more with you as we continue to develop and derisk this project. Our next confirmed project in construction Jurassic BESS broke ground this year and will be Alberta's first large-scale battery facility. Once complete, it will enhance grid flexibility in a province that has experienced rapid growth in corporate-backed wind and solar. Next year, we will deliver and install the battery packs and high-voltage substation targeting full commercial operation by the end of the year. Now I'm very happy to give you an overview of one of Northland's new gas-fired development projects. The Collisard project is a peaking 120-megawatt gas-fired generation project located near Red Deer, Alberta. The project is well advanced in the ASOQ and we are driving development forward with a targeted COD before 2029. We believe now that this is the time to invest in gas generation and battery energy storage in Alberta. With low cost and abundant gas, a favorable ecosystem for project development and strong future market fundamentals, we are confidently advancing this project. So in summary, in the Americas, with a particular focus on Canada, we will continue to lead with operational excellence. We'll drive more value from our existing fleet, and we will deliver our projects safely through construction. With that, I will pass to Toby Edmonds for an update on our international fleet.

Good morning. Thank you, Calvin. I'm Toby Edmonds, Executive Vice President of International. I joined Northland in 2024 and I have experience of over 25 years in the energy industry spending most of my time focusing on delivering offshore wind construction projects. Picking up from Calvin, I'll give you a quick overview of our international business. Today, we have 1.8 gigawatts in operation and 2.1 gigawatts in construction, which represented 65% of the EBITDA of the company in 2024. And it's set to grow with the two new offshore assets when they come online. Our business began internationally in 2014, when we stepped outside of Canada and into the offshore market, with the acquisition of Gemini in the Netherlands. We later added onshore wind with our acquisition in Spain, where we have a diverse portfolio of wind and solar assets. Fundamental to delivering our EBITDA is our commercial availability, which you can see in the chart here. Like the Americas, this graph demonstrates our focus on operational excellence and continuous improvement is delivering for Northland and its shareholders. In both our offshore fleet and onshore fleet, we see availability above industry benchmarks which is thanks to the hard work of our operations teams across our portfolio. But we're not complacent. We strive to keep and exceed what we have achieved so far by ensuring that each asset is ready when the resource is there to be captured, whether it's wind or solar. Our performance is made possible by our focus on operational excellence. We are an experienced operator of large-scale generation assets across the international business, and we will see 2 gigawatt scale assets coming online in the next years. Our new structure sets us up to capitalize on our global footprint, deepening our market knowledge to increase performance and surface new opportunities. Creating value starts with our people who work every day on driving performance. As Pierre-Em mentioned, we empower our people to identify and create improvement opportunities. This local empowerment supported by management means we can innovate at the asset level and elevate the approach to our entire business. Our key focus areas today are developing our integrated management systems in line with ISO standards, maintaining our full service capability, which allows us to make informed decisions at each of our assets, whether to procure services from the market or do it ourselves to deliver top quartile performance. Performance analysis enhancements enable a deep understanding of the turbines in our fleet, knowing the health of all our assets in real time allows us to pinpoint the exact moment to change a component to minimize downtime and revenue loss and keep availability high. Finally, data analysis, investing in our data capability to further automate reporting and performance analysis across our portfolio to leverage our scale. Overall, we are constantly assessing ways to increase revenue whilst decreasing cost and risk. As Christine and Calvin have discussed, value enhancements at our existing assets are key in driving value from our fleet. In spring of this year, Spain experienced a blackout, which affected tens of millions of people. And we believe grid scale battery storage systems offer part of the solution to prevent this from happening in the future. Our portfolio is spread across Spain, giving us several opportunities to add battery storage systems at existing sites where the grid needs it most. We are assessing the opportunities across our European portfolio, where we have some of the ingredients in place, such as land, grid capacities and synergies with existing assets. One example is Lebrija in Spain, where we see the potential for a grid scale battery storage system up to 180 megawatts at 720-megawatt hours. This will enable us to strengthen our market position, whilst leveraging our expertise in battery storage from Canada. Switching our focus to construction. I'd like to share a short video showing our progress on Hai Long and Baltic Power this year. [Presentation]

As you can see, we've progressed on our projects in construction. Northland continues to advance the 1-gigawatt Hai Long project, and we achieved first power and installed more than half of the wind turbines and completed installation of the export cables this year. I'd like to provide detail on the commissioning at Hai Long. The issue we disclosed relates to the wind turbines installed this year. To recap our original plan, we intended to install and commission 37 wind turbines in 2025. The good news is that we've successfully completed the installation of these turbines. However, commissioning has been slower than originally planned, pushing it into the winter period. Due to winter weather, our access to the turbines is limited for final commissioning and troubleshooting. As a result, not all turbines are generating as planned this winter. Of the 37, we have 2 wind turbines generating 16 currently in commissioning, leaving 19 remaining to be commissioned. The issues we're encountering are typical for this phase of commissioning, but mean we will have lower revenues through Q4 and Q1 than planned. We had anticipated using this revenue to support capital expenditure in the coming year. As a result, we've identified the need to fund between CAD 150 million and CAD 200 million in 2026 to fill the gap. Our recovery plan will get us back on track through Q2 next year. In parallel to this, we've proactively addressed a potential reliability issue at the onshore substation by replacing the cable connections between the onshore substation and the grid system, this requires an outage in December and is expected to be completed in January. We do not anticipate any further impacts from this issue going forward. While these issues were not planned, they are manageable and do not affect the long-term value or viability of the Hai Long project, and we remain on track to achieve full commercial operation in 2027. We are confident in our ability to deliver this project. On Baltic Power, we've made strong progress and continue to plan. As you saw in the video, we've installed the two offshore substations which is an important milestone for the project. Next year's milestones include completing foundation, turbine and array cable installation and connecting to the grid system to achieve first power generation. We target full commercial operations in the second half of 2026. Today, we announced the acquisition of two battery storage projects totaling 300 megawatts, 1,200 megawatt hours in Poland. At Mieczyslawów & Kamionka in Poland. These acquisition strengthens Northland's growing presence in Poland and underscores our commitment to supporting the country's energy needs. As Poland's electricity markets evolve, the need for grid scale storage is critical to balancing the grid and ensuring reliability. The projects each have a 4-hour duration and are located in Western Poland. The anticipated construction cost for both projects is EUR 200 million. The revenues are underpinned by 17-year capacity contracts, indexed to inflation with additional revenue expected from energy arbitrage and participating in ancillary services markets. Financing and the start of construction are expected next year in 2026. Once completed, the project will be some of the first battery energy storage facilities operating in Poland. We will now go to a short break. Then Jeff Hart will take you through our financials. Thank you. [Break]

All right. Welcome back, everyone, and good morning. For those of you who don't know me, I'm Jeff Hart, I've been with Northland for, I think, a little over 6 months here. So good to see you all. Now that Christine and the team have discussed the overall strategy and business execution, I'll provide color on Northland's financial framework. The foundation of our financial framework is based on the three pillars of financial resilience, disciplined capital allocation and sustainable shareholder returns. The result of the framework is a self-funded model without reliance on common equity issuances, and let me touch on each of the pillars at a high level. To start, financial resilience. We will maintain an investment-grade balance sheet while delivering on our existing construction and future growth opportunities and we will enhance our margins through cost reductions, all of which is underpinned by a highly contracted revenue base. In terms of capital allocation, we will only invest in our core markets and all investments must meet or exceed a 12% rate of return. And finally, sustainable shareholder returns. Our shareholder returns will be underpinned by the cash flow of our operating fleet and they can grow sustainably through the planned horizon in line with our growing cash flow. Now let's dive deeper into financial resilience. Our plan assumes an investment-grade credit rating which allows us more reliable access to capital through the cycle and provides a foundation to grow our business. And our credit ratings at both agencies are currently mid-BBB and our plan maintains an investment-grade rating. In addition, the majority of funding is expected to come from project financing, given the nature of our cash flows, which provides further funding certainty. And project financing also allows for ratable principal repayments through our plan, in line with our contracted revenue time frames, also reducing our refinancing risk. And our drive for financial resilience, we'll also focus on cash flow enhancement through cost efficiency, thereby driving EBITDA and free cash flow margin by a target of $50 million in annual savings to be fully realized by 2028. And the plan to achieve our baseline cost reductions is driven by streamlining our organizational accountabilities, and Christine talked about that earlier. A more concentrated market focus, we're primarily focused now on two core markets in Europe and Canada, and we'll be able to spread our fixed cost over greater volumes given that depth. And we'll leverage technology on our corporate processes, including automation and leveraging our software and our ERP systems fully. Finally, we'll look to optimize our maintenance processes and contracts across our fleet. These reductions will allow us to further fund growth whilst also expanding our balance sheet capacity. And the final piece of financial resilience I'd like to address is our revenue base. With more than 95% of our revenue under long-term PPA or contract for difference, we have predictable revenue pricing. And the high contractedness is supplemented by our disciplined approach to counterparties with an average credit quality of A+, further reducing risk. And finally, underpinning this strategy is a long tenure beyond 10 years, which provides additional funding certainty for growth and returns through the planned horizon. Taking a deeper dive into our revenue contracts, you can see here, the majority of our revenue is contracted well beyond the 5-year plan with a weighted average life of 14 years. And the recent Nordsee One recontracting is consistent with our approach on financial resilience. We secured a corporate PPA with Shell Energy Europe for 1/3 of our volumes commencing June '27 for a term of 5 years. This construct reinforces our drive for providing lower risk cash flows underpinned by strong counterparties. Now let me turn to disciplined capital allocation, the second pillar. As Christine discussed earlier, all of our investments must be strategically aligned in our core markets. And now that we've established in our core markets are Europe and Canada, our organic growth options must provide competitive returns relative to the inorganic growth, share buybacks and other capital deployment opportunities. If a project or opportunity has strategic alignment and shows strong risk-adjusted returns, only then will we allocate capital. What this means in practice is our returns must reflect underlying regulatory time frames and meet a higher bar if the asset has a larger portion of market exposure or technical execution risk. Now let's take a look at our return criteria in a little bit more detail. We've adjusted our returns to ensure we create shareholder value while continuing to grow. We previously targeted equity returns of 9% to 12%. Now we aim for 12% or greater. As I mentioned previously, we will require higher returns depending on that relative risk profile of the specific opportunity. And we see many opportunities in front of us that can meet our return thresholds. Let's look at a few examples in action of our capital allocation and action, Jurassic BESS, leverages off our success at Oneida and will provide grid stability in our core Alberta market. Collisard will build off our history of being a Canadian natural gas power generator and is expected to deliver cash flow in 2029. And finally, the new assets in Poland demonstrate our approach in action by building platform depth in a core market, and they'll deliver returns in the mid-teens. Now let's look what this all means in our plan and funding in aggregate. With the rebalancing of our dividend, we have the capacity to deliver on our growth objectives in a strong macro market. Firstly, our gross operating capacity is anticipated to grow from our current 3.5 gigawatts to more than 7 gigawatts by 2030, representing a compound annual growth rate of about 16%. The strategy maintains investment-grade credit ratings, and we are planning to spend $6.2 billion with approximately 50% of that capital investment for cash contribution outside the 5-year plan. Northlands equity requirements are $1.3 billion and are expected to be funded by $600 million of cash flow, $300 million of asset recycling and $400 million of corporate debt. In aggregate, the funding plan provides the financial flexibility to capture opportunities in a strong environment. And although we don't target a specific payout ratio, our dividend payout on free cash flow is anticipated to be between 40% to 60% over the long haul. Now let's focus on the returns and the result of our plan. We're targeting approximately a 6% compound annual growth rate in free cash flow over the 5-year period through to 2030. And I'll walk through the major drivers based off of midpoint targets and impacts. We expect to add $1.25 per share of cash flow growth between our in-flight construction projects and new asset additions. A large portion of this amount, $0.82 is attributed to Hai Long, Baltic Power and Jurassic storage. As I discussed earlier, we are targeting approximately $0.04 a share in savings in G&A through organization and process streamlining. Our existing asset cash flows, however, are expected to decline in net of operating cost savings by about $0.20 per share. And this is driven by scheduled PPA step-downs in our existing international operating fleet. And our free cash flow is being further reduced by approximately $0.60 per share in interest, hedging, taxes and other items. And this is being primarily driven by the cessation of capitalization on some of our existing corporate hybrid debt and assumed corporate debt issuance, which will add additional corporate expense, and that's about $0.20. And we also have the absence of German tax ruling this year in 2025 that benefited this year by about $0.12 per share. The rest of the impacts are really related to hedging, mark-to-market and other impacts. And consistent with our planned funding, we are expected to see impacts of asset recycling on our free cash flow. Now let's look to the overall. Our total shareholder return target is 10%, which is driven by the disciplined capital allocations and that free cash flow growth. And to summarize, our financial framework will be underpinned by a resilient balance sheet and cash flow. We'll focus our capital deployment in core markets, and we've increased our return criteria to 12% or greater and our shareholder returns are expected to grow in line with our growing cash flow. And I think Christine, now I'll hand it back to you to close out before Q&A.

Thanks, Jeff, and thank you, everyone. As you've heard today, we remain firmly committed to our purpose, delivering long-term value for shareholders. We are grounded in our principles of deliver, strengthen and grow and we apply them consistently as we advance value-accretive opportunities across our business. We continue to deliver on our priorities. We are advancing Baltic Power, advancing Hai Long, we are maintaining and improving operational excellence across our fleet. We are identifying and executing opportunities to enhance performance and streamline costs. We're high-grading our pipeline to ensure only the best opportunities move forward, and we are evaluating selective accretive acquisitions where they make sense. We have accomplished a great deal this year. And despite a challenging environment, we are confident in our ability to continue delivering value for shareholders. Northland has a strong future, and we are focused on creating value that lasts. I think we have time now for Q&A. So I'll invite the team up with me, and we'll be happy to take your questions.

Okay. We're going to open up the floor for questions. There's two microphones in the room. And then on the website for those online, you can type your messages into the chat. I'll please remind you to please give your name and your firm before you ask your question. We'll take the first question.

Thanks. Good morning, everyone. Thanks for hosting the event. It's Sean Steuart from TD Cowen. Christine or Jeff, in light of the share price correction over the last week, down 30%, we would have I guess, based on what the reset year 2027 would look like you'd be trading at maybe 8.5x enterprise value to EBITDA. Can you compare your trading valuation to what development build multiples look like right now and appreciating asset growth is the focus here, but why would buying back shares at this point not make sense for the company?

Yes. Look, I mean, we've gone through, and I know Christine and I have talked about this over the last couple of weeks is we're going through what we'd say is -- we want to set a financial framework that stands the test of time, and then we have to manage through the long haul. We do see opportunities in front of us here. And so I think when we look at the financial framework and the return targets we've set, we think this will create shareholder value, and we've looked at several different modeling options and different pieces, and we felt this was over the long haul, the path to go. What I will say with share buybacks, and I talked to it about it in my -- I alluded to it in my prepared remarks, share buybacks are a tool in the toolkit. And I do view them broadly in competition with growth capital. And if they drive returns, the growth capital has to compete with that. And so obviously, as we go through here, and we've got two large-scale projects, we have to manage through all of that, and I have to manage and we have to manage the corporate balance sheet and liquidity. But this is -- it's something that we will look at, and they will compete or share buybacks will be looked in competition with our growth capital and they'll be return driven.

It's Nelson Ng from RBC Capital Markets. First question is with respect to the Collisard gas development in Alberta, can you just talk about the contract structure? And also, I know we've been hearing a lot about the lead time required to purchase gas turbines. Can you just talk about timing and the contract structure?

Sure. I'll pick that up. With respect to the contract structure, as we continue to drive the development forward, we are in active conversations we're offtake. We find there are many entities looking to fill their order book with a flexible asset like Collisard in the period when it will be going commercial. With respect to the supply chain, there were lots of options for a facility like Collisard and in this particular instance, we are looking at reciprocating engines for power generation, and that is where we're looking at driving at the moment.

Okay. And then my next question is just a quick one. In terms of Nordsee One, you recontracted 1/3 of the power for 5 years. Can you just talk about why 1/3 and why only 5 years? Like is it more about the current price levels, if it was higher, would we have seen a higher portion in a longer term?

Thanks very much for the question. So the process for N1 recontracting evolved quite a lot I would say, over the months that we were following it because electricity markets in Germany have been going through some very different changes this year. And we do see a big difference in, for instance, wholesale electricity prices for firm power in Germany being extremely high, but renewable power PPA prices declining. So then the question is, is this a long-term structural change? Or is this near-term, short-term change. We don't want to risk locking in everything at an overly low price. So instead, we decided to take a prudent approach here. So we locked in 1/3 of the revenue at the price that we could get in a very competitive process. And we're continuing to assess options for the remaining 2/3, but this gives us line of sight and stability over the time period that we need it and doesn't leave us regretting locking in at a poor moment by virtue of just the timing of our process.

Mark Jarvi from CIBC. Just, Jeff, on the ranges you provided for the free cash flow per share growth. Can you talk a little bit about some of the assumptions particularly about what's required on the growth front to hit the bottom end of the range? What's kind of baked into hitting the top end of the range?

Yes. And so it's -- as you look at it, it's a fairly tight range when you look at it. But I talk to about $1.25 of growth in aggregate. And $0.82 of that, you can kind of think about $0.80 to $0.85 is under construction right now. So you've got Jurassic BESS, Baltic and Hai long. And so those are in execution mode. And obviously, if we look at the rest of the circa $0.40 for the rest of it, what I would say is if you look at the capital frame and some of the projects we talked about is -- and Christine talked on this as well, is we see more onshore investment here primarily through the 5 years. And so we've got obviously the opportunity we see in Poland. We've got Collisard and some of the value enhancements. And what I would say is, is that growth isn't concentrated into one or two assets. We've got a few opportunities there that we think we can execute on and that are relatively speaking, on a technical basis, lower execution risk. So kind of think of it as 2/3, 1/3. So 2/3 under construction, 1/3 on the new projects we talked about, whether it be value enhancement, Collisard or the opportunities we see here in front of us in Poland.

And just in terms of -- I think if it's a 12% return that talks about $1 billion of equity deployed. Is that the right way to think about what you've embedded in that? And then when you think about maybe deploying 1.3, that gives you a bit of room in terms of buffer in terms of timing of deployment?

Yes. So and I'll get back to the projects you're right. When I went through is the equity requirements are about 1.3. When I talk to the gross CapEx, we said 40%, 50% of the CapEx is for COD outside the 5 years. But when you go back to the next phase of growth after the construction projects, it's not concentrated into one asset per se or one or two assets. So there's some flexibility in timing there, but we're confident we can execute on them. And again, they're not high technical risk. I mean every project until it's on, it's not on, but relatively speaking to what we see is lower execution to what we've got now, and we've got some flexibility on pacing.

And we have assumed in the plan as well that there's some spending in the next 5 years for projects that will be COD after that. So you take the burden of the CapEx in the first 5 years, but the revenue would come later.

Yes, which is about 50%.

And just a follow-up on that. When you think about where the payout ratio will be now, funding capacity, visibility on development projects, including some of the long-lead offshore wind projects. Does the growth rate still hold at that 6% beyond 2030? Any indications around post 2030 would be helpful.

Yes. And what I would say is it's fairly ratable. You look at us inclusive of in construction over these 5 years here, we're doubling capacity. I would expect us -- as we get into the remaining 10 years is to have largely an even flow of capital as we're going and keep executing on that flywheel or a treadmill in a positive way and continue to execute that through the 10 years.

Rebecca Teltscher from New Haven Asset Management. I was just looking for a little bit more clarity on the dividend cut. If you talked about the delays of Hai Long being like short term in nature and the time line is still intact for 2027, why are you making like a long-term decision like cutting the dividend and you're looking at that over the cash flow over a 5-year period. You kind of mentioned areas of growth in Canada and Europe. And so you don't really talk about any areas of growth in Colombia. So was monetizing some of those assets considered instead of cutting the dividend and also just wanted to know the rationale of, let's just say, not issuing equity when the stock price is up almost 50% this year if you were looking to fund battery storage M&A. So I just wanted to have an idea of the rationale for the dividend cut. You talk about many tools in the toolkit. So I just wanted to have an idea of where that -- where the decision was made and how you came to that.

Yes. And so there is a lot there. So if we miss it, please, we can come back to that. Look, I think when we looked at it and we talked to this and went through my bridges, I think going through the decision and looking at what the growth trajectory was in front of us, you're right, is we would have, with these construction projects, elevated payout and they're a year to 1.5 years or however you want to do the math, but let's just say through next year. I think when we looked at it, and I think Christine talked to this in her remarks as well, is that we saw, as we go through the growth opportunities and coming off of some of those adjustments, when you look at free cash flow, we saw our payout ratio at higher, elevated kind of average 90% through the plan. I think we looked at the opportunities in front of us, the opportunity set in Europe and Canada and felt and we looked at different scenarios felt this was the most accretive path forward and value creation and created the highest value for our shareholders through that. It was -- there was a lot of modeling and looking at this. And then as far as -- you talked about core areas and potential monetization, I can't really get into specifics or anything along those lines. But when you look at the funding plan, we do assume some monetization and asset dispositions in that. And obviously, we want to be in a spot where we can make the right decision for our shareholders and the right value decision and have flexibility in that and not having to dispose of something for proceeds to fill a funding gap or anything along those lines. And so obviously, we would look what's core and noncore, where do we see growth and all of that will factor in. But we have assumed some asset dispositions in the model. Yes. And so the equity component looking at different pieces like again, come back to is the organic cash flows that we saw, we felt -- and looking at it and through the modeling, again, it was the highest value proposition when we looked at it in creation on a per share basis. And so that's where we went with the decision with the dividend.

Baltej Sidhu, National Bank Capital Markets. Jeff, could you just touch on the capital recycling side of things? Specifically as it pertains to your U.S. development pipeline and where some of those projects sit within the interconnect queue stage and if you're able to effectively monetize those.

Yes. And it's something that we're constantly looking at. I'd love to give you very specifics, but what we don't want to do is get into -- we want to make sure we get the right value. We're not in public negotiations. But that's exactly right. If we look at those options, I'll start with the pipeline itself, I think what really comes down to is you look to early stage into mid-stage but you'd look to say is where do we see opportunities to retain this option and look at whether the regulatory regime -- we get this clarity on those -- some of those options or we progress them or do people within their portfolio, see that we could monetize. That's something we definitely would be open to or consider. And that's why there is value there, whether it's in our hands or not. And I think if you look at the rest of the portfolio, I think we'll constantly be looking from early stage in the pipeline all the way through to operations. Where is the best holder? Do we see growth? Do we see value creation here from our side? Where else could we get this? Is the timing right in the market and all of those value decisions will come in basically from, say, early stage to later-stage operating assets.

Rob Hope, Scotiabank back here. Taking a look at the financing plan. So you do have some partners equity in there, which I'm assuming is Hai Long and Baltic. As we look forward, where do partners fit into the funding strategy? And should we assume that if additional offshore is to be pursued, that would be where it would be focused? Or could you look to partners on some onshore opportunities as well?

Well, it's a great question. So for offshore, our baseline plan is we will always be partnered. If we're doing offshore projects, I think it's just a much better way to manage the risk, and I think it leads to just much better project delivery. So that's our baseline approach for offshore. I would also layer on that I think it's a reality of doing business in Canada that many Canadian projects are requiring indigenous ownership in order to move forward successfully. So I think we built that into our plan as well that we will have at least in Canada, indigenous partnerships and then other opportunities we look at case-by-case basis. So we are often approached about joining partnerships with other companies on different types of assets, and we assess them case by case as well to see if they fit our model, fit how we do business. But I think it's reasonable to assume when you're looking forward, everything in offshore, we would partner. And onshore in Canada, most of it will be partnered in some way.