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Greenlane Renewables Inc. (GRNWF) CEO Brad Douville on Q1 2022 Results – Earnings Call Transcript

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Greenlane Renewables Inc. (OTCPK:GRNWF) Q1 2022 Results Conference Call May 12, 2022 5:00 PM ET

Company Participants

Darren Seed – Incite Capital Markets

Brad Douville – President and CEO

Lynda Freeman – CFO

Conference Call Participants

Aaron MacNeil – TD Securities

David Quezada – Raymond James

Sameer Joshi – H.C. Wainwright

Colin Healey – Haywood Securities

Adam Gill – Paradigm Capital

Nick Boychuk – Cormark Securities

Ahmad Shaath – Beacon Securities

Sean Keaney – VIII Capital

Operator

Good afternoon, ladies and gentlemen. Welcome to the Greenlane Renewables Inc. First Quarter 2022 Results Conference Call. [Operator Instructions] Today’s call is being recorded, and a replay will be available on the Greenlane website.

I will now turn the call over to Darren Seed, from Incite Capital Markets. You may begin the conference.

Darren Seed

Thank you, Operator, and good afternoon. Welcome to the Greenlane Renewables first quarter 2022 conference call.

I’m joined today by Brad Douville, Greenlane’s President and Chief Executive Officer; and Lynda Freeman, Greenlane’s Chief Financial Officer. Before beginning our formal remarks, we’d like to remind listeners that today’s discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties and can cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables doesn’t undertake to update any forward-looking statements, except as may be required by applicable laws.

Listeners are urged to review the full discussion of risk factors in the company’s annual information form and MD&A, which have been filed with the Canadian securities regulators. Lastly, while this conference call is open to the public and for the sake of brevity, questions will be prioritized for analysts. Now, I’ll turn the call over to Brad.

Brad Douville

Good afternoon, and thank you, everyone, for participating on today’s call. I’ll make a few high-level remarks on the quarter before I turn it over to Lynda for a few details on the financials. Greenlane delivered another strong quarter to start 2022 fiscal year. Our revenue generated during the period was the second highest in the company’s history, followed by a record end to 2021, and 33% higher than the same period a year ago. During the quarter, our adjusted EBITDA was again positive, marking the sixth consecutive profitable quarter for the company, while our gross margin was consistent with our historical performance despite persistent challenging macro conditions, including Russian invasion of the Ukraine, supply chain disruption and inflationary pressures. To match the rapid growth of the RNG industry and of Greenlane, we continue to reinvest in a prudent way to build the company and strengthen the team to maintain product and market leadership. Consistent with this theme, we completed in the quarter the first corporate acquisition in Greenlane history, finalizing the company’s purchase of Airdep S.R.L., a provider of biogas desulfurization and air deodorization products based in Italy. Every biogas RNG project requires hydrogen sulfide treatment. Airdep’s proven system, of which over 100 units have been sold to date, offers [ lower ] capital and operating costs than competing methods and is especially compelling for use in higher-flow, higher-hydrogen sulfide concentration applications. Through the acquisition, Greenlane expects to further strengthen our price competitiveness and margins by in-sourcing a technology that we would otherwise procure for integration into our biogas upgrading systems.

The acquisition also gives us a solid footprint in Italy, one of the most dynamic RNG markets, creating new opportunities for sales of our biogas upgrading systems in the region. We continue to build momentum, as we are seeing further growth in our sales pipeline which now sits at over CAD 900 million. We have a strong balance sheet with cash and no debt, which positions us well to continue on our path of pursuing the company’s strategic growth initiatives. Data points continue to support compelling growth of the RNG industry. The RNG Coalition, one of our industry’s largest trade organizations, is projecting a doubling of RNG projects in the next 18 to 24 months in North America, as close to 250 projects are under construction and/or have achieved development benchmarks. In conjunction with NGVAmerica, the coalition also released new transportation data highlighting that the penetration rate of RNG use in all natural gas vehicles in 2021 reached 64%, which is an impressive 234% increase since 2017.Turning to the broader geopolitical backdrop and the ongoing tragedy unfolding in Ukraine, biomethane stands out as a near-term solution to help Europe improve its security of supply of energy. According to the International Energy Agency, Europe imports approximately 90% of its natural gas consumption, 45% of which comes from Russia. Through this conflict we have been reminded that energy security is paramount and an issue that must be and can be solved at the same time as the climate crisis.RNG has an important role to play in both.

The European Commission has recognized this with its REPowerEU plan, its flagship strategy to make Europe independent from Russian fossil fuels well before 2030, starting with gas. The plan calls for rapidly increasing biomethane production more than 10x 2020 levels, to 35 billion cubic meters, by 2030, which would represent about 20% of Russian gas imports. These are but a few examples of the dynamics underpinning forecasts for a significant uptake of RNG. We have to bear in mind that RNG is still in the early phases of deployment globally relative to its potential and high demand for it today that far outstrips supply. Once again I’d like to take this opportunity to thank the Greenlane team for their dedication and commitment to our mission of helping to decarbonize the world’s energy systems as well as our customers for choosing Greenlane as a trusted partner. I’ll now pass it over to Lynda.

A – Lynda Freeman

Thanks, Brad, and good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated, and all comparisons are the first quarter of 2022 against the first and, hence, the same period of 2021.Greenlane delivered another strong quarter, with revenue for the first quarter of 2022 of CAD 16.3 million, which represents a 33% growth over the comparative period of 2021 and the second highest revenue generation in the company’s history. System sales revenue accounted for 93% of total revenue in the quarter, which is recognized in accordance with the stages’ completion of projects, with the remaining 7% of revenue coming from aftercare services. Our gross margin, excluding amortization, was 25%, or CAD 4 million, compared to CAD 3.3 million, or 27%, in the first quarter of 2021.Adjusted EBITDA in the first quarter was a breakeven profit of CAD 0.03 million, versus a CAD 0.6 million profit in the first quarter of 2021, which represents our sixth consecutive quarter of positive adjusted EBITDA. We reported a net loss in Q1 2022 of CAD 2.2 million, compared to a net loss of CAD 0.2 million in the comparative quarter of 2021.Included in our results for the first time are the results of newly acquired Airdep, which are consolidated into our results from the date of acquisition, on February 1, 2022. In just the first 2 months since acquisition, the new subsidiary contributed CAD 0.9 million to revenue and an operating profit of CAD 0.2 million. The acquisition is accounted for as a business combination in accordance with IFRS, and the preliminary allocation of the purchase price can be found in Note 4 to our financial statements. As at March 31, the company’s sales order backlog was CAD 35.7 million.

As a reminder, the sales order backlog is a snapshot in time, which varies from quarter-end to quarter-end. The sales order backlog increases by the value of new system sales contracts and is drawn down over time as projects progress towards completion, with amounts recognized in revenue. I should highlight that the Airdep order backlog has not been included in the reported sales order backlog of CAD 35.7 million since the contracts are smaller in value and delivered over a significantly shorter period of time. Our sales pipeline of prospective projects grew to over CAD 900 million as at March 31, 2022, a net increase of CAD 50 million in new opportunities since year-end 2021 and a 26% increase year-over-year versus the CAD 715 million we reported at the end of Q1 of last year. We continually update our pipeline of active system sales opportunities based on quote activity, which represents visibility to a significant number of opportunities that funnel down through our sales process, and those opportunities successfully converted into contract wins then move into our sales order backlog. Our balance sheet remains very healthy, as we exited the quarter with a cash balance of CAD 23.1 million and no debt, providing ample flexibility for Greenlane to invest in and grow our core RNG business as well as pursue other strategic initiatives. We look forward to keeping shareholders apprised of our progress. And with that, I will open the call to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Aaron MacNeil, of TD Securities.

Aaron MacNeil

Lynda, maybe I’m missing something here, but I haven’t had a ton of time to go through the disclosures. I guess I’m just wondering if you could explain some of the puts and takes on the backlog figure. I guess the way I’m thinking about it is based on that CAD 11-and-change million order that was announced recently, I would have guessed that the backlog would have been a bit higher to end the quarter.

Lynda Freeman

Sorry, the backlog is as at March 31. So that order was announced just last week. So that’s not included in the backlog. So that can be added on now. But it’s literally if you take the backlog that we announced in our year-end financial statements and then deduct the revenue from the [ upgraded ] sales, then you’ll get to the number.

Aaron MacNeil

So did you change the way that that’s calculated? Because wasn’t there a, I don’t know, CAD 7-something million order in January that would have…?

Lynda Freeman

That order, we announced at the very, very beginning of January. It was all done in 2021. So it was announced as part of our 2021 backlog.

Aaron MacNeil

Got it. Okay. That clears that up. And then maybe just acknowledging it’s a bit of a weird quarter because there hasn’t really been that much time since you last reported, but the bid pipeline has obviously gone up a bit higher. We’ve sort of seen, I guess, a bit of a slowdown in new awards. And I guess I’m wondering, is there anything in terms of industry themes that are sort of preventing the initiation of new project wins? Or is it just the lumpy nature of the business?

Brad Douville

I’ll take the line. Aaron, we’ve been saying all along, and it continues to be the situation, it is lumpy. Orders come when orders come. The last announcement that we made was, in fact, for 3 projects under one contract for 3 different states. So that particular one was consolidated. But quarter-to-quarter, it will change, it will fluctuate. That is something that we do caution against, is reading too much into the sales backlog because it is a snapshot in time at the end of the quarter. And you asked the right question around the CAD 7 million order that came just at the beginning of January. And because all the work was done, we considered, well, we should actually report this in Q4.So we’re trying to give the best information we have, but the nature of the beast is that it is somewhat lumpy quarter-to-quarter.

Operator

Our next question comes from David Quezada, of Raymond James.

David Quezada

My first question here just on, maybe on Europe specifically, now that you’ve had Airdep for a couple of months, I guess, and you kind of called out some of, I guess, the supportive dynamics that you’re seeing in Europe with respect to increased use of biomethane. I’m just curious if you’ve started doing more, I guess, sales outreach in Europe, either through Airdep or otherwise? And maybe just update us on, like, any business development opportunities or strategy in that region.

Brad Douville

Sure. David, well, starting with Airdep, first, we’re quite excited to add that to the portfolio for all the reasons that we’ve talked about in the opening remarks. And we think that’s great. And that’s a starting point for sales, right? [indiscernible] what we have currently on offer within that new part of the business, and that’s the desulfurization systems predominantly, and then the second product line is the air deodorization. But we also said one of the strategic rationales for that acquisition was to get us a solid footprint in Italy, which is a dynamic RNG market. And to answer your question, in short, yes, is the answer in terms of using that. We’re using that foundation from which to build. It is early days, we just completed this just in February, but we’ve already begun that exercise. We do have a strategic plan over time to leverage that footprint to take further advantage. We already take advantage of that part of the world from a supply chain perspective, but we think there’s future opportunities. And that part of the world is particularly skilled with offering components at good quality, great prices in the nature of the business that we are in, gas handling [ph].

David Quezada

Excellent. I appreciate the color. And maybe just one other one for me. I mean, you guys obviously have a pretty strong balance sheet, a well-established competitive position. I’m just curious if today’s environment, and by that, I guess, I mean cost inflation, supply chain issues, maybe some other players in the space that aren’t as well capitalized as you are, does it give you any opportunities strategically, either from an M&A perspective or picking up projects that some other peers may not be able to execute on in this environment? Do you see any benefit or maybe benefits [indiscernible] opportunities arising from some of the challenges we’re seeing today?

Brad Douville

No doubt. I mean, the strong balance sheet and the cash position does give us flexibility that competitors of ours may not otherwise have, in 2 ways. So one is if there’s new opportunities that come up that we have to negotiate certain payment terms or bonding provisions or things like that, the cash in the bank does give us the ability to win when we might otherwise not. So that’s probably the biggest benefit of that. Yes, I’d say that’s the key.

Operator

Our next question comes from Sameer Joshi, of H.C. Wainwright.

Sameer Joshi

Congratulations on the good quarter and completion of the Airdep acquisition. Just a couple of questions on the financial statements themselves. I see that the accounts receivables have dropped by around CAD 5 million. At the same time, contracted assets have gone up a little bit. Can you explain that dynamic?

Lynda Freeman

Sure. So the accounts receivable has gone down from December because we’ve collected a bunch of the cash that was due. The way that it works from a project accounting and how you deal with that under the accounting standards generally for contract assets is as we recognize amounts in revenue, those amounts are either above or below what we’ve invoiced. And so if what we end up recognizing in revenue ends up being more than we’ve actually invoiced to a customer, we end up with a contract asset. If the amounts we’ve invoiced to a customer are less than we’ve recognized in revenue, then we have a contract liability.

And there’s a, [indiscernible], there’s a really good reconciliation of it in Note 5, which would show that. And then with the receivables side of things, it’s just — obviously, as we’re then invoicing the customer, it then moves from contract asset or liability into receivables. So that’s sort of the correlation between the 2. But I’m happy to take it offline if you want [indiscernible].

Sameer Joshi

I got it. And I can look at the [ financial findings ] as well. The deferred consideration line, is it all Airdep, or is there something else in that?

Lynda Freeman

Sorry, could you say that again?

Sameer Joshi

There’s a line called deferred consideration. And I’m assuming it is all for Airdep, right?

Lynda Freeman

Yes, that’s 100% Airdep. We’ve got a few new lines on the balance sheet to do with the acquisition, and the Note 4 in the statements lays it out of where all those amounts are coming from. Yes, all to do with Airdep.

Sameer Joshi

Got it. And as I understand, like, in the press release you talk about reducing asset levels, strengthening your teams as well as sequentially the operating expenses seem to have come down despite the addition of Airdep. So can you explain, like, what has made the costs come down sequentially related to 4Q ’21?

Lynda Freeman

I mean, our costs — I’d have to see exactly what you’re comparing to. We have seen an increase in our G&A. If you look quarter-on-quarter, there’s an increase. It could be just the way it’s being broken out. We’ve broken it out into more detail this quarter between sort of G&A and R&D and sales and marketing. So that might be it.

Operator

Our next question comes from Colin Healey, of Haywood Securities.

Colin Healey

I was just wondering about the CAD 50 million increase in the sales pipeline. Can you say kind of regionally where that came from? Is any of that Europe?

Brad Douville

I’ll take that one, Colin. So it’s pretty much consistent with our historic pipeline, and it is on an aggregate basis. And the CAD 50 million isn’t necessarily exactly CAD 50 million. We have puts and takes all the time in the pipeline. We have had this quarter, if you look at — and I know it hasn’t been long that you’ve had a chance to look at the MD&A. This quarter, the mix is approximately, I think it’s around 2/3 of the sales is in the U.S., with the rest of the balance of the world. That’s not a bad proxy for the representation of the kind of distribution in the sales pipeline. And I imagine that your question is, have we seen some specific uptake as it relates to things like the REPpowerEU plan and the events occurring in the Ukraine? Is that kind of the nature of the question?

Colin Healey

Yes, that’s where I was going with the second part of that question. But I just wanted to see if the mix is changing, if you’re starting to see that trickle in, if you’re getting higher frequency of inbounds from Europe? Like, how quick are they moving to try to realize a plan of decreasing reliance on Russian gas?

Brad Douville

I’d say details are still unfolding with that. So I think it’s certainly all the right attention from the policymakers’ perspective. But I’ll go back to one of the things I said earlier, is on account of us now having that footprint in Italy we haven’t gotten into more activity specific around Europe and taking advantage of the Italian footprint, in particular. And so some of that will be represented in the pipeline.

Operator

Our next question comes from Aaron MacNeil, of TD Securities.

Aaron MacNeil

Not to beat this to death, but one more question on the backlog, and I promise I’ll stop. Understanding it’s a snapshot in time, is there any readthrough to a potential lull in revenue generation over the next quarter or 2?

Brad Douville

Well, I’d say, firstly, I mean, as you know, we don’t give forward-looking guidance on the financials. But what we can say from where we sit is that the underlying fundamentals driving the industry are continuing to strengthen. We’re seeing an acceleration. We’ve seen that in the sales pipeline. The number of customer discussions continue to accelerate, both in the contracting phase and the usual activities in the pipeline. So I can’t emphasize enough that it does fluctuate from quarter-to-quarter.

We have obviously demonstrated over the last couple of years. We think our results have outpaced the market, and we seem to continue to be having success in that regard. And the underlying global parameters around that support that. So from quarter-to-quarter, we expect to see some fluctuations in the backlog, in the revenue, but the underlying trend suggests we’re going to continue to see growth going forward generally.

Aaron MacNeil

Fair enough. Lynda, I saw the cost of living salary increase in the disclosures. Do you see kind of your G&A, R&D, sales and marketing, maybe a lump strategic initiative spending as sort of a reasonable run rate, going forward? Or do you think we’ll still see some modest growth in these figures as you kind of continue to build out the team?

Lynda Freeman

I mean, I think the reality is that there will still be a modest growth. I think it’s a good indicator of where we’re sitting. There will definitely — there are still additional positions that we’re looking to hire for. So I think there will be a growth. But hopefully, we’ve taken the bulk of it now.

And the reality is I know that our G&A has grown and it’s really that we’re just, we’re investing for the growth. We’re building out the structure, building out the R&D so that we can fuel that future growth that we know is coming through that pipeline.

Operator

Our next question comes from Adam Gill, of Paradigm Capital.

Adam Gill

Just a question on the backlog, not to keep hammering on it. But just in terms of what’s in the books right now, how much ability is there to pass on some of the cost inflation that I’m sure you guys are seeing on to the customer and ensuring that the gross margins remain robust?

Lynda Freeman

I mean, we have a robust proposal mechanism that when we’re quoting for work, we lock in our suppliers as much as we can during the proposal stage, and we put a fixed date expiry on proposals. After that, we say to customers we’ll have to revisit the price. Because with inflation as it is and the prices are changing all the time, we have to lock everything in. And then as soon as orders come in, we’re quick to confirm those prices with suppliers. So that’s been a big driver for why we’ve been able to sustain our margins as they are. We don’t have the ability to pass on those inflationary impacts on to our customers.

Things like shipping and stuff, we pass that on to customers. So that obviously has helped because, in some cases, that can be quite a big impact. But general price increases, the key is getting it right at the front and locking in the suppliers as soon as we get locked in by the customer.

Adam Gill

Great. And just kind of looking at 2020 disclosure, 2021 disclosure, is it fair to say there might be a little bit of seasonality in order book growth through Q1, Q1 being a bit weaker than the typical quarter?

Lynda Freeman

No, we don’t typically have seasonality yet. There’s ups and downs, as Brad said, in terms of when orders come in. But it’s not — we don’t tend to see a trend that in the first quarter there’s less orders come in or anything like that. It really is very dependent on the circumstances of the orders on the day. So I wouldn’t say there’s really seasonality.

Operator

Our next question comes from Nick Boychuk, of Cormark Securities.

Nicholas Boychuk

Just if you could, a quick update on the status of some of the growth initiatives that you’ve talked about previously, things like larger landfills, the sugarcane opportunity in Brazil. Do those still all have the same kind of magnitude of growth potential? Is supply chain increases and anything else in the world impacting those growths? [indiscernible] see anything changing?

Brad Douville

Nick, those are still the core areas of focus, for sure. We’re seeing a number of landfills, both bigger and smaller ones. And as I had mentioned on prior calls, that we’ve obviously seen a big uptake in U.S. [ dairy ] projects. That continues to be an area of significant activity. And landfills, there’s been a resurgence, I’d say, a lot going on there. The wastewater treatment plants continues to be kind of a steady part of the business, but certainly not to the same level as those other 2 sectors. And then in terms of new sectors, Brazil is a continued focus for us. And the sugar mills are certainly getting up to speed. Landfills in Brazil are also a big opportunity. So those, in terms of Brazil right now, the 2 sectors would be the sugar mills, where the sugarcane-based ethanol is produced, and then also the landfills. At the sugar mills, of course the waste product, one of the waste streams of that is apt for creating RNG.

And that’s in very early days. However, the quantities that we’re talking about are quite large. So for obvious reasons and because of those reasons, that’s an area of focus for us, including establishing some better local presence.

Nicholas Boychuk

Got it. And just to confirm, as you do enter new markets like that, the margin profile, it would kind of remain somewhat similar? Perhaps a little give and take?

Brad Douville

Yes, I think that’s the right way to think about it. We’ve had good success, a good track record. I mean, we’ve been in Brazil for quite some time. The market has picked up. We’ve had an increasing amount of orders coming from Brazil.

Yet, our gross margins have remained relatively consistent, within the range. So yes, so far, so good. We’ve had a really good ability to execute on those, which is representative in our gross margins. And then we do continue to do the kinds of things that Lynda just commented on in terms of preserving our gross margins in the event we’re trying to deal with whatever supply chain fluctuations are occurring or any of these other dynamics that might risk gross margins.

Operator

Our next question comes from Ahmad Shaath, of Beacon Securities.

Ahmad Shaath

I guess the first question, just getting out of the way on the G&A line, it came in a little bit higher than expected, but not by much. I just wanted to understand the strategic initiative expense. Is that a one-off thing? Or you guys have an ongoing program to improve operational efficiency in order to pursue additional opportunities? Maybe a little bit more color on that front. And then the second question, just a general market commentary from you, Brad, if you can help us understand how does the project economics have been impacted, if we think of today as a snapshot with inflation, within prices at the all-time highs, and higher interest rate environment on the project level side.

How do we compare the IRRs of today compared to 2 years ago prepandemic levels, where there was no inflation and interest rates were lower and RIN prices were relatively lower? Has that picture changed materially? Or is it still too soon to draw any conclusions on that front?

Brad Douville

Why don’t you tackle the first one, Lynda, and then I’ll respond to the second question.

Lynda Freeman

That sounds good. So on strategic initiatives, I mean, I think really what you’ll recall is in the last 2 equity raises that we did, February 2020 and January 2021, within there, when we were doing equity raises, we said that there were various initiatives that we were going to deploy some capital to, whether it be the — originally, it was [indiscernible] and then we’ve moved on to our development capital. We’re looking at strategic initiatives for acquisitions, et cetera. So really what’s in that line is the costs associated with that. And so I would expect us to continue to do that in the short term. And then when we start to realize on some of those opportunities, that line will definitely fall away, for sure. I’ll hand over to Brad for the other question.

Brad Douville

The complex IRR line. So this is really related to our customers, just to make sure it’s clear for everyone, and there are a number of things that have — we’ve seen some fluctuations around the RIN. The RIN price is at an all-time high, as you’ve noted. With the LCFS prices in California, those have moderated slightly but still above general levels. So I think, if I understand what you’re looking for, in terms of our customer set and what they’re trying to do with their IRRs, I think we’ve seen with more players coming into the industry, higher competition as it relates to project finance, the general IRR is dropping in terms of making a viable project. And that’s not only a consequence of greater competition for project finance coming in, but I think also a greater comfort for how these projects work, a track record of what works and just the whole industry becoming more comfortable generally with financing these kinds of projects. The other dynamic that we’re seeing, clearly, and we’ve been talking about this for a while, but it’s certainly turning into action, and we’ve seen that strongly turn into action within the last 6 to 12 months, is what we’ll refer to as the voluntary market, where gas utilities are also offtakers for these projects.

They come at it a little differently. We’re generally in the transportation space with RINs and LCFS. It’s a bit of a shorter-term horizon than offtakes. It could be 3 or maybe 5 years or it could be just spot pricing-based. Whereas in the voluntary markets with the gas utilities, it might be 15- to 20-year offtake contracts.

Usually, that comes at a slightly lower price, but also with a bankability that distinguishes it from the transportation-based market. So that would set itself apart with a different kind of IRR expectation and a different debt leverage profile for our customers. So I think, in general, I view it as positive because there’s more options available to project developers in the market, including the ones that we’re working with on our deployment of development capital initiative. But this opens up other markets. The gas utility market is much, much larger than what we’re currently seeing in the transportation markets. And we have to continue to remind ourselves that if we think of RNG how quickly it’s grown, most of that growth, particularly in the U.S., has been in the transportation markets, and we’re just starting to see now the gas utilities come into this.

And those volumes are enormous compared to what we’ve seen so far. And we’re seeing more and more specific activities, offtake contracts being announced and volumes that are allowing the gas utilities to reach their RNG penetration targets.

Ahmad Shaath

That’s great color. Maybe if I can follow up on the last point, Brad. Are you able to quantify or give us any color on the number of projects you’re working on, on deploying development capital? I mean, how is that looking? I’m not sure if that’s in the disclosure [indiscernible], but that would be a great update for us.

Brad Douville

Yes, absolutely. That’s one where we’re continuing to work. We’ve signed some term sheets. When we finalize the tentative agreements for our first contract, we will announce that. But it’s coming along.

We’ve been at it for the better part of the last year. We’ve put a lot of work into it in terms of getting several conversations going, vetting projects, getting developers and testing the market with this. We’ve had good reaction so far, that we do think that our program to provide development capital, there are certain developers to accelerate their project who are ready for construction phase. That certainly adds value. Not all of our customers will need that or want it. But those that do, it’s an attractive product for them, financial product. And for us, it gets our equipment specified early and into the project. So what I can say is that’s building. I think we’ve had a reaction from the market that it’s positive and the kind — we didn’t refine this, and you’ve been following us for a long time, Ahmad. And so we have gone from, more generally, a build-and-operate, but what does that mean in the Greenlane context? And we refined that over the last year or about a year ago when we were clear in the direction of deployment of development capital, that’s where we think we can add the most value. Because the #1 thing that the market generally needs is origination.

The demand side for all intents and purposes is unlimited demand for RNG. So we really have to focus on the origination side, and that’s where this program is targeted. And development is an inherently local activity that if we can help those local folks that may not have the wherewithal that some others do and that gets more RNG to market and we participate in that, that’s all good. And that’s the fundamental basis for that program.

Ahmad Shaath

That’s great. And just, promise, last one for me. And Lynda, from that perspective we should expect any costs associated with that initiative to be lumped in the same item, strategic initiatives, going forward, right? I am assuming correctly?

Lynda Freeman

Yes, that’s correct.

Operator

[Operator Instructions] Our next question comes from Sean Keaney, of VIII Capital.

Sean Keaney

I had another one around the backlog. I was just wondering if you’re seeing any sort of delays in completing your announced projects, be it on your end or your customers? Just because, would that slow the pace at which you’re able to recognize revenues and maybe cause some near-term pressure?

Brad Douville

A lot of questions on backlog today. I think generally, I’m not sure we can add anything different. It does vary from quarter-to-quarter. I’d say — I think you’re specifically asking, are we seeing some hesitation in customers out there for whatever various reason? I don’t think so. I don’t think there’s anything we can point at that says people are holding back. In fact, it’s just the opposite in terms of the kinds of conversations that we’re having and normal conversations in the sales process. The pipeline is up in terms of the opportunities list, but we aren’t necessarily seeing people hold back because what they’re seeing in inflation. Obviously, that is a discussion topic, no doubt, that we’re having, that we haven’t had a year ago, that nobody had a year ago. But so far, so good. I’m not sure I can add much more than that.

Sean Keaney

I just meant less around the level of the backlog now, but just the time over which you would expect to recognize a contract. Like, 18 months instead of 12, for whatever reason.

Lynda Freeman

No, we’ve not noticed any difference there. We recognize as stages of completion as the projects move forward. Whenever we announce a new contract, we say whether or not it’s going to get kicked off straight away. And we’ve certainly not identified any delays in the delivery of projects experienced, at all.

Operator

[Operator Instructions]This concludes the question-and-answer session. I would like to turn the conference back over to Darren Seed for any closing remarks.

Darren Seed

Thank you, everyone, for participating on today’s call. We appreciate your questions as well as your ongoing interest and support, and we look forward to seeing you on the next conference call.

Operator

This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.



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The African Development Bank appoints Dr. Daniel Alexander Schroth as Director Of the Renewable Energy And Energy Efficiency Department

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The African Development Bank is pleased to announce the appointment of Dr. Daniel Alexander Schroth as Director of the Renewable Energy and Energy Efficiency Department, effective 16 May 2022.

Prior to his appointment, Schroth, a German citizen, served as Acting Director.

Schroth joined the Bank in 2012 following several senior appointments with various international organizations, including as Political and Economic Adviser to the EU Special Representative for Bosnia & Herzegovina; Economic Adviser in the EU Delegation to North Macedonia; Energy Sector Coordinator for the United Nations Mission in Kosovo, and for the European Bank for Reconstruction and Development’s natural resources team in London.

Since joining the Bank as Principal Energy Specialist in the Energy, Environment and Climate Change Department, Schroth has led various projects across the continent and coordinated several partnerships, including the Sustainable Energy for All Africa Hub, the Africa Climate Technology and Finance Center, the Green Mini-Grid Market Development Program and the Bank’s involvement in the EU-Africa Infrastructure Trust Fund.

In July 2017, he was appointed Advisor to the vice president of the energy complex. Under his leadership, various partnership agreements were concluded, such as the Regional Development Objectives Agreement with USAID/Power Africa and the $600 million Korea-Africa Energy Investment Framework. Schroth  served as Acting Director from January 2019 up to the time of this appointment.

As Acting Director, he presented various renewable energy projects to the Board of Directors of the African Development Bank, including projects under the flagship Desert to Power initiative and projects in new business areas such as decentralized energy access, energy efficiency and clean cooking. He oversaw the conversion of the Sustainable Energy Fund for Africa, into a Special Fund, making it the first in-house blended finance facility, and led the mobilization of over $300 million in new grant contributions from donors, an achievement that contributed to the Bank being named multilateral development finance institution of the year in 2021, by Global Finance.

He has also been responsible for the mobilization of large-scale climate finance, including over $320 million from the Green Climate Fund for the Leveraging Energy Access Finance Framework, and the Sahel G5 Desert to Power Financing Facility.

With 20 years of experience in international relations, energy policy and renewable energy, Schroth has built a strong network of partners in the areas of energy and climate change. He is a recognized expert on Africa’s renewable energy sector and has represented the Bank in many high-level international fora and conferences. He serves on several steering and oversight committees and is a member of the SDG 7 Technical Advisory Group.

Commenting on his appointment, Schroth said: “I am grateful for the confidence placed in me by President Adesina to scale up theAfrican Development Bank’s support for the deployment of renewable energy and energy efficiency projects across the continent, with a view to ensuring that the Bank is at the forefront of driving Africa’s just energy transition.”

Schroth holds a Ph.D. and an M.Phil in International Relations, with a focus on international energy policy, from the University of Cambridge, United Kingdom, and degrees in international business administration from Reims Management School, France, and the European School of Business, Reutlingen, Germany.

President of the African Development Bank Group, Dr. Akinwumi A. Adesina, said: “I am delighted to appoint Dr. Daniel Schroth as Director of the Renewable Energy and Energy Efficiency Department. Daniel, a respected professional, will lead the team to support the Bank’s Regional Member Countries to develop renewable energy, energy efficiency and clean cooking solutions as part of their energy systems, through a combination of public and private sector operations, and he will also spearhead the delivery of the Bank’s relevant flagship programs.”

African Development Bank Group



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According To Study, Monarch Butterflies Might Become Disoriented as a Result of Light Pollution

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Biologists say nighttime light pollution can interfere with the remarkable navigational abilities of monarchs, which travel as far as Canada to Mexico and back during their multi-generational migration.

Researchers found that butterflies roosting at night near artificial illumination such as a porch or streetlight can become disoriented the next day because the light interferes with their circadian rhythms.

Artificial light can impede the molecular processes responsible for the butterfly’s remarkable navigational ability and trigger the butterfly to take wing when it should be resting.

Light pollution affects monarch butterflies

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(Photo : Leon Neal/Getty Images)


According to biologists, evening light pollution can interfere with monarchs’ extraordinary navigational abilities, which allow them to travel as far as Canada to Mexico and back throughout their multigenerational trips.

Researchers discovered that butterflies roosting at night near artificial lightings, such as a porch or streetlight, can get disoriented the next day because the light disrupts their circadian cycles.

Artificial light can disrupt the chemical mechanisms that allow the butterfly to navigate so well and cause it to take flight when it should be resting.

With their unpredictable, meandering motions sweeping them over your lawn, it’s difficult to envision monarch butterflies adhering to a strict flight plan. However, some monarch populations migrate thousands of kilometers to the same woods in Mexico where they spend the winter.

Researchers are now investigating if light pollution is hampering this incredible cross-country journey.

“It’s an essential subject since many migrants travel through cities,” said co-author and UC master’s graduate Samuel Stratton, as per ScienceDaily.

“Getting some ecological data would be extremely beneficial in determining the effects of light pollution on orientation and migratory outcomes.”

Monarch butterflies rely on the darkness of night to digest proteins that are essential to their internal compass.

Millions of monarch butterflies migrate east across the Rocky Mountains from their summer breeding areas in southern Canada and the northern United States, covering distances of up to 2,500 miles (4,000 kilometers) to overwintering grounds in Mexico.

Monarch butterflies may carry up to five generations across the continent and return. They utilize an internal clock to inform them where to orient themselves concerning the shifting position of the sun in the sky as they travel.

However, monarchs subjected to nocturnal light pollution, such as a street lamp above their preferred roost in a cedar tree, may undergo a phase shift, causing their body to believe it is either sooner or later than it is. According to UC researchers, this can throw off their perception of time.

Read more: Artificial Light Pollution: What is It and How Does it Affect our Environment?

Light pollution

Humans and their creations are responsible for the majority of environmental damage on Earth. Consider the vehicle or that marvelous man-made substance, plastic, as per National Geographic.

Automobile emissions are now a major source of air pollution that contributes to climate change, and plastics pollute our oceans, posing a substantial health risk to marine wildlife.

Electric light may be a lovely thing, leading us home as the sun sets, keeping us secure, and making our houses comfortable and cheerful.

However, like with carbon dioxide emissions and plastic, too much of a good thing has begun to harm the ecosystem.

Light pollution, or the excessive or inappropriate use of artificial light in the outdoors, has an impact on human health, wildlife behavior, and our ability to see stars and other celestial objects.

Light pollution is a worldwide problem. The World Atlas of Night Sky Brightness, a computer-generated atlas based on hundreds of satellite photographs, made this very clear in 2016.

The atlas, which is viewable online, depicts how and where our planet is illuminated at night.

Large portions of North America, Europe, the Middle East, and Asia are illuminated, with only the most distant sections of the planet (Siberia, the Sahara, and the Amazon) completely dark.

Singapore, Qatar, and Kuwait are among the most light-polluted countries on the planet.

Related article: Light Pollution: LED Streetlights Contribute to Moth Decline in England


© 2022 NatureWorldNews.com All rights reserved. Do not reproduce without permission.





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Little Falls native opens Environmental Advantage

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… tree removal services, Clark started Environmental Advantage in September 2019 and … growth and maximize fruit production. Environmental Advantage does this through deep … healthy environment is to plant trees, which is another service Environmental Advantage …



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