NPIFF - Northland Power: Lack Of Price Escalation Is Its Major Weakness
Investment Thesis
Northland Power (NPIFF) (TSX:NPI) has two major offshore wind projects in Germany and Taiwan that should increase its capacity by nearly 20% from today’s level. Its DeBu project in Germany should reach commercial operation date in late 2019 and its Hai Long 2 project in Taiwan should reach COD in 2024/2025. However there is a gap of 4~5 years in between. In addition, most of the company's current power purchase agreements do not have price escalation in its contracts. This means the company may have to renew the contracts with lower