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Vision
To be one of the worlds foremost producers of clean, renewable energy.
Mission
As one of the worlds foremost producers of clean, renewable energy, the
company strives to produce energy with a minimal impact on the environment
and ultimately provide a fair return to all stakeholders.
- Who: stakeholders
- What: Get a fair return through a renewable source
Key Stakeholder Preferences:
Board: There preference is to focus on renewable sources of energy
First Nation:
Energy Financial Ltd.
Key Success Factors (internal):
Shift in political environment. What the government can give, they can
take it away.
Profitability
Constraint:
Company is clean focused and will only choose projects that are clean and
renewable energy.
REC is a publicly traded company and has a constraint of using IFRS for its
accounting policies
SWOT
Strength
Global reputation
International reach
there are several sites that they are currently investigating (not putting all
their eggs in one basket)
they receive a clean audit each year and they have no collection issues
Weaknesses
Bonus plan is considered above average for the industry (this can be a
strength or weakness depending on AI)
Company is not paying dividends and they claim that they are in the
growth phase but their stocks are dropping thus this is bad
Opportunity
Cost of wind energy will decline by 12% over the next five years and is the
fastest growing sector of renewable energy (this would be 2.6% each year
**important for calculations**)
They are no in solar energy and have the opportunity to enter that market
which is growing by 20% over the past decade. There is significant
opportunity both domestically and export markets
Long-term partnerships
large market for products and Canada holds 20% (recognized as Solar
leaders around the world)
Hydro Opportunities
o Proven installed capacity and track record in Canada
o Canada can double its capacity
Threats
New cheaper and easily accessible technologies are being developed and
the energy index has already lost 5%, this means that there is a potential
for losing its attractiveness
Hydro: Regulatory hurdles and permits and licenses, first nations asking
for royalty (licenses to operate)
Retention of employees: Many employees are not happy with their new
roles in the merge company. They are still working on developing a
common culture. (Cultural fit)
Compensation
Geothermal Energy
Pros:
Cons:
ROR
Pros:
Cons:
Hydroelectric Power
Pros:
Cons:
Wind Power
Pros:
Cons:
Solar
Pros:
Speculation of Alternatives
1. New Capital Project: Solar (no expertise, or experience)
1. they are on incentives from the government
2. REC looks at political risk
Pros:
Cons:
- the breakup of revenue is 40:30:30 (Hydro:Geo:Wind), if there is a hydro
project. You are decreasing your diversification and thus putting more eggs in
one basket
- Wind
2. Merger/Acquisition
Pros:
Fair Price?
Cons:
3. Expansion
Implementation
PAGE 7 (last paragraph)
- use the 20 licenses if its a water program