- EverGen boasts long term contracted offtakes with key energy providers such as FortisBC
- Offtakes mean that company has buyers lined up before production begins; these agreements are key in securing relatively stable and predictable cash flows
- 20-year offtake agreement with utilities like FortisBC enhances certainty for EverGen’s business and allows it to build new production capacities to convert more organic waste into RNG
Although a young company, EverGen Infrastructure (TSX.V: EVGN) (OTCQB: EVGIF) appears poised to establish itself as one of the leaders in the renewable natural gas space (“RNG”) – especially in its home Canada. As a developer, owner and operator of projects that take organic waste and convert it into renewable natural gas, EverGen is operating in the burgeoning market as a number of Canadian utilities seek green energy alternatives. Hitting ambitious climate targets means that these companies increasingly seek to secure a steady stream of green energy supplies. Here, renewable gas offers an effective solution that doesn’t cause significant disruption to consumers, either financially or operationally. As a result, the demand for RNG is expected to remain strong. EverGen’s business model is designed to leverage market opportunities like these through offtakes, or long-term partnerships with energy providers that increasingly seek new ways to achieve ambitious green targets.
Offtake agreements are essential as they establish a contractual framework for a long-term business arrangement between the selling and buying company (offtaker) to purchase all or a substantial part of a project’s output. This type of agreement is built to be a win for all parties involved. For sellers, they often provide documentary evidence validating the project’s financial projections. Since they are based on prices contracted before the production even begins which then remain fixed or contractually adjusted over a very long period, offtakes provide enhanced certainty to RNG producers, helping them develop and grow their businesses. At the same time, buyers are securing certainty over their green energy supplies, so they can position themselves as energy transition leaders.
In EverGen’s home province, British Columbia, FortisBC — a major energy provider serving around 1.2 million customers with electricity, natural gas, and renewable and low-carbon energy solutions — is leading the charge when it comes to energy transition and long-term offtake agreements. FortisBC partners with renewable energy suppliers such as EverGen to offer sustainable options for its customers and contribute to the province’s energy resiliency throughout the year. To date, more than 10,000 FortisBC customers are participating in a voluntary program that provides RNG for use in homes and businesses. The company has also recently submitted an application to the British Columbia Utilities Commission that would require new residential gas connections to automatically receive 100% renewable gas (https://ibn.fm/YacL0).
In 2021 EverGen entered into a 20-year offtake agreement with FortisBC to build and develop its Net Zero Waste Abbotsford project. Under the agreement, FortisBC will purchase up to 173,000 gigajoules of RNG annually, which is enough energy to meet the needs of approximately 1,900 residential homes. EverGen expects to start supplying renewable natural gas from the project to FortisBC’s network in 2023 (https://ibn.fm/cFJFd).
As a company solving the problem of organic waste by using it as a source of renewable or sustainable energy, EverGen appears poised to lock in market opportunities through long term partnerships with key utility companies to enhance cash flow certainty and sustainability while enabling development and expansion of its production capacities. Chase Edgelow, EverGen’s founder and CEO, explained the company’s approach in a recent interview (https://ibn.fm/etj7P): “There are a number of Canadian utilities that are hungry for renewable content… In British Columbia, where we’re headquartered, FortisBC is leading the charge with that. They offer 20-year contracted offtakes to companies like ours to supply them with green energy, which provides a certainty for our business. Our business is then going out and building facilities that will take organic waste and convert it into RNG” EverGen appears committed to replicating the success it achieved in British Columbia across Canada with a similar model.
For more information, visit the company’s website at www.EvergenInfra.com.
NOTE TO INVESTORS: The latest news and updates relating to EVGIF are available in the company’s newsroom at https://ibn.fm/EVGIF
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