Ladies and gentlemen, thank you for standing by. Welcome to this Northland Power conference call to discuss the 2021 first quarter results. During the presentations, all participants will be in a listen-only mode. Afterwards, we will conduct a question- and- answer session. At that time, if you have a question, please press star one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded. Thursday, May 13, 2021, at 10:00 A.M. Conducting this call for Northland Power are Mike Crawley, President and Chief Executive Officer, Pauline Alimchandani, Chief Financial Officer, and Wassem Khalil, Senior Director of Investor Relations and Strategy. Before we begin, Northland's management has asked me to remind listeners that all figures presented are in Canadian dollars, and to caution that certain information presented and responses to questions may contain forward-looking statements that include assumptions and are subject to various risks. Actual results may differ materially from management's expected or forecasted results. Please read the forward-looking statement section in yesterday's news release announcing Northland Power's results and be guided by its contents in making investment decisions or recommendations. The release is available at www.northlandpower.com. I will now turn the call over to Mike Crawley. Please go ahead. Thank you, operator, and good morning, everyone. We also have David Povall joining us today. David's the Executive Vice President of Development, of course. He's joining us from Tokyo, actually, where he's been spending, since the pandemic, focused on a lot of our growth opportunities in Asia. Thanks to everybody for joining us this morning. We will review our first quarter 2021 financial results on the call and operating results. Following our prepared remarks, we will take your questions from analysts. To kick things off, we want to reiterate that the health and safety of our employees and shareholders comes first. Through diligent planning and rigorous adherence to health protocols, we have maintained high levels of facility availability, delivering essential supply of energy to consumers and businesses in Europe, Canada, and Colombia. First, looking at our financial results for the first quarter, we reported adjusted EBITDA of CAD 360 million compared to CAD 421 million in first quarter 2020, representing a 14% decrease. Our free cash flow of CAD 134 million was 36% lower compared to CAD 211 million in the same quarter 2020. On a per-share basis, we achieved CAD 0.66 in 2021, which compares to the CAD 1.02 in 2020. I would point out, though, that the majority of the decline year-over-year is attributable to lower wind resource at our offshore wind facilities in 2021 compared to the first quarter in 2020. That quarter was a very strong one for offshore wind production, with wind generation well above long-term averages. What we saw in the first quarter 2021 in the North Sea is closer to normal winter wind speeds, albeit somewhat lower than the long-term average. Pauline will provide a more detailed look into the financial numbers later in the call. Strategically, we continue to build momentum on both our short-term and long-term growth initiatives to position ourselves for success. Northland has a growing footprint globally, with positions in key growth markets to participate in the global decarbonization efforts underway. Subsequent to the end of the quarter, we expanded this footprint. First, as we outlined in January, we announced our entry into Poland for the Baltic Power offshore wind project through our partnership with PKN Orlen, the Polish oil and gas company, a very strong and influential partner in Poland. We completed the acquisition on March 24th, 2021. The partnership will provide Northland with a 49% interest in a mid-stage offshore wind development project with the potential of up to 1.2 GW of capacity to be built in the Polish Baltic Sea in the middle of the decade. Baltic Power provides Northland with a scale entry into a new market alongside a strong and influential local partner. It gives us a healthy balance between reducing the risks of new market entry on the one hand, and development opportunities to extract value on the other. The project will benefit from the first round of revenue support through a 25-year contract for difference offtake agreement with the Polish government. Following the closing on March 24th, the project filed an application with Poland's Energy Regulatory Office to secure the CFD, and we expect to receive approval for the CFD in the coming weeks. We expect to reach financial close for the Baltic Power project in 2023 and commercial operations in 2026, which fits nicely with our other offshore wind projects in Asia. While offshore wind remains our primary focus to achieve our long-term growth objectives, we are also enhancing our near-term development pipeline as part of our strategy to further diversify our portfolio and bolster our cash flow profile. This strategy not only supports the advancement of our 4 GW-5 GW of identified development projects, but it also provides additional critical mass alongside our offshore wind projects to grow our global presence. Most recently, we announced the acquisition of a 540 MW onshore renewables portfolio in Spain. This new portfolio aligns well to diversify our asset base while adding high-quality regulated cash flow to our business, while expanding our presence in Europe as well. The near-term free cash flow from this portfolio will help fund the development of our large offshore wind projects, particularly as new markets and opportunities continue to emerge for offshore wind globally. In addition, the acquisition provides us with scale and a platform in the growing Spanish renewables market that immediately positions Northland as a top 10 renewables operator in Spain. We expect to leverage this position to grow our presence in Spain and the Iberian Peninsula as a whole, and to help us establish a European asset management platform that can support our entry into other attractive European renewables markets. Turning to our development and construction projects, I want to provide a brief update on the various projects we have underway. First, touching on our New York Wind onshore projects, in February, we received and accepted contract price offers from NYSERDA for 20-year indexed renewable energy credit offtake contracts. We are also in the final stages of negotiations regarding key agreements for the projects and expect to be able to sign the turbine supply, service and maintenance, and the balance of plant agreements in 2021. These are all key milestones in the development of the project as we move closer towards financial close, which we expect to execute for two of the three projects later this year, with one following after in 2022. Commercial operations for the first two projects are expected by late 2022, and the last one in 2023. At Hai Long, we received confirmation from the Taiwan Bureau of Energy that Hai Long 2A has secured approval for its industrial relevance plan, which sets out Northland's commitment to local supply chain and procurement, marking the achievement, excuse me, of a significant milestone for the project. Now at La Lucha, as we previously disclosed, construction activities are nearing the final stages of completion. Certain construction activities related to the energization of the project have been delayed, primarily due to COVID restrictions. Once these activities are completed, Northland expects to commence with grid testing, which will be followed by submission of an application for commercial operations to the Mexican regulatory authorities. Based on the current timeline, Northland still expects commercial operations at La Lucha to commence later this year. Efforts to secure commercial offtake and project financing are expected to be finalized after commercial operations at La Lucha. I wanted to quickly discuss our financial risk management activities as they relate to our Gemini project. In 2020, the wholesale market, or APX for short, traded down well below the SDE floor that applies to our Gemini PPA. In fact, the APX has averaged below the SDE floor, it's the Gemini PPA, for four of the facility's five years of operation, but was the worst in 2020. This resulted in Northland incurring lost revenue of approximately CAD 27 million in 2020, as reported in our annual report. In response to the decline in power consumption caused by COVID-related lockdowns last year and the uncertainty related to the length of the COVID pandemic in the second quarter of 2020, Northland entered into financial derivatives for 2021, and to a lesser extent, for 2022 and 2023. These derivatives were effective in mitigating downside risk with some exposure to lost revenues should the APX increase above the SDE floor. Because forward market prices were low relative to the Gemini floor price of EUR 44, the hedge we put in place last year protected our downside risk if market prices declined further. It effectively gave up upside in revenue when market prices rose above the floor price. The APX has strongly rebounded lately, in part prompted by rising natural gas and carbon prices in the EU. As such, the APX hedge ceased to serve its purpose since the APX has now climbed above the floor price in our SDE contract, resulting in CAD 4 million of loss revenue for the first quarter. Subsequent to the first quarter, the APX has continued to increase to the current price of CAD 63 per MWh, and as a result, Northland commenced entering into financial derivatives that will limit Gemini's lost revenue for 2021 to similar levels as experienced in 2020. In closing, we are off to a good start in 2021, with healthy first quarter financial results and good momentum and execution of our growth plans. We continue to accelerate our position as a top 10 global player in offshore wind through our Baltic Power offshore wind project in Poland, and have secured an attractive entry portfolio for onshore renewables in Europe through our Spanish acquisition. The execution of our strategy in key growth markets will further strengthen Northland's competitive positioning as a global developer and operator within the renewable energy space. I will now turn the call over to Pauline for a more detailed review of our financial results. Thank you, Mike, and good morning, everyone. Last night, Northland Power released operating and financial results for the first quarter of 2021. Our financial performance in the quarter was solid, and we generated healthy results for both adjusted EBITDA and free cash flow, despite experiencing lower wind resource in the quarter from our offshore wind segment. Our business is primarily focused on offshore wind, with over 60% of our adjusted EBITDA being generated from our offshore wind facilities in the North Sea. This segment of our business experiences natural variations in wind resource, not only year-over-year, but also within any given year. Fluctuations can result in variability from quarter to quarter. However, over the course of time, this variability typically balances out. As part of our growth strategy, we will also continue to diversify our portfolio and our cash flows. In the fourth quarter, we generated adjusted EBITDA of approximately CAD 360 million, which was a decrease of CAD 61 million, or 14%, from the CAD 421 million we generated in the first quarter of 2020. The main factor leading in the year-over-year decrease was the lower wind resource in the North Sea, which saw a 19% decline in production across all three of our facilities in the first quarter of 2021 compared to the same period in 2020. Note that the first quarter of last year had wind resource significantly above the long-term average. This decline in adjusted EBITDA was offset by additional positive contributions from EBSA. EBSA only had partial contribution in the first quarter of 2020 due to the timing of that acquisition. With respect to free cash flow, Northland generated approximately CAD 134 million in the first quarter. This was a decrease of CAD 77 million, or 36%, compared to the same quarter in 2020. As with adjusted EBITDA, the single largest driver behind the year-over-year decrease in free cash flow was the lower offshore wind resource in the quarter that resulted in a decline in overall earnings of CAD 61 million. In addition to the lower wind resource, there was a number of smaller items that contributed to the decrease, including higher scheduled principal repayments, primarily relating to Nordsee One, and higher non-expansionary expenses at North Battleford and Nordsee One, which were expected. As disclosed in our fourth quarter results, Northland commenced reporting adjusted free cash flow, which excludes growth-related expenditures from the metric. Management believes that adjusted free cash flow provides a relevant presentation of cash flow generated from the business before investment-related decisions, and is a good and meaningful measure of Northland's ability to generate cash flow after ongoing obligations to reinvest in growth and fund dividend payments. In the quarter, we reported adjusted free cash flow of CAD 147 million compared to adjusted free cash flow of CAD 224 million in the first quarter of 2020. Adjusted free cash flow was affected by the same factors impacting free cash flow as growth expenditures remained relatively consistent year-over-year. On a per-share basis, these figures translated into free cash flow of CAD 0.66 and adjusted free cash flow of CAD 0.73, respectively, in the first quarter. These compared to CAD 1.10 per share and CAD 1.17 per share for free cash flow and adjusted free cash flow during the first quarter of 2020. Our rolling four-quarter free cash flow and adjusted free cash flow payout ratios, calculated on a cash dividend basis for the quarter ending March 31, were 73% and 58%, respectively. This compares to ratios of 58% and 52% for the same quarter ending March 31, 2020. The increase in both net payout ratios were primarily due to lower free cash flow and adjusted free cash flow, as explained prior, partially offset by the reinstatement of the dividend reinvestment program in September of last year. In addition to free cash flow generated, Northland utilizes additional sources of liquidity to fund growth and our capital investments. In March, we successfully completed our Deutsche Bucht refinancing, resulting in a reduction in the interest rate of the facility's senior debt and the release of EUR 50 million, or CAD 74 million, from the funds previously restricted for debt service, immediately enhancing our corporate liquidity. Subsequent to the end of the quarter, Northland completed a bought deal equity offering for 22.5 million common shares for aggregate gross proceeds of CAD 990 million. The net proceeds of the offering will be used to fund the cash purchase price of the Spanish portfolio acquisition that Mike mentioned earlier, expected to close in the third quarter, with the remainder of the net proceeds expected to be applied towards funding capital requirements, including the acquisition of Baltic Power, expected near-term capital commitments for identified development projects, and to repay borrowings under our corporate revolver. As a result of the equity offering, which closed in April, we estimate we have approximately CAD 875 million of liquidity on hand, providing sufficient liquidity to execute on our identified development initiatives. Turning to our financial outlook, our 2021 financial guidance remains unchanged from February, with adjusted EBITDA continuing to be in the range of CAD 1.1 billion-CAD 1.2 billion. We expect our free cash flow per share in 2021 to be in the range of CAD 1.30-CAD 1.50. Lastly, our recently introduced metric, adjusted free cash flow per share, we expect to be in the range of CAD 1.80-CAD 2 per share. In other corporate events, Northland's corporate credit rating of BBB stable was reaffirmed by Standard & Poor's in their most recent review in March of 2021. Last but not least, we released our fourth annual sustainability report highlighting Northland's 2020 ESG achievements and sustainability strategy going forward. This report is centered around the four pillars of planet, people, community, and business, and sets out how Northland will meet its 2030 targets of reducing its electricity generation carbon intensity by 65% from 2019 levels, while increasing our gross renewable energy capacity by four to five gigawatts around the globe. Our vision is to create a carbon-free world, is centered around our efforts to embed the principles of sustainability and ESG into all aspects of our business. In 2021, we formally launched our ESG framework, which provides greater transparency in how we mitigate risks, meet our ESG reporting obligations, and broader stakeholder expectations, while at the same time creating long-term value for our shareholders and our partners. We are committed to enhancing our disclosures in order to further demonstrate our transparency and effective management by reporting in alignment with the GRI Standards Core also reporting in alignment with SASB, based on our industries, and aligning our commitments with the relevant UN Sustainable Development Goals. We have also committed to reporting in line with TCFD by 2022. All in all, it was a productive quarter for the company as we worked to deliver on our growth objectives, key milestones on our development projects, to de-risk our projects and increase their value, and achieve our financial guidance. With that, I will turn the call back over to Mike for his concluding comments. Thank you, Pauline. Northland is in an advantageous position to participate in the global growth in renewable energy. We have the market position, the growth pipeline, the talent, and the balance sheet to seize the opportunity and create significant value for our shareholders over the long term. This concludes our prepared remarks. We'd now be happy to take questions from our analysts. Operator, please open up the lines. Thank you. Ladies and gentlemen, if you would like to register a question, please press star one on your telephone. If your question has been answered and you would like to withdraw your question or your registration, please press the pound key. If you are using a speakerphone, please lift your handset before entering your request. One moment, please, for the first question. Our first question comes from the line of Rupert Merer with National Bank. Please proceed with your question. Hi, Rupert. Inflation is very topical today. Can you talk about the impact of inflation on the cost of your development projects? Maybe if you could give us some color on what you're seeing in rising costs and how much of the cost is locked in for your contracted projects. Do you see any risk to returns with rising costs? We certainly track commodity prices closely, particularly on our larger projects. On those projects, we always include a sufficient buffer, in our view, to account for any rise in commodity prices, and driven by inflation overall, Rupert. When we look at our current pipeline of projects right now, we're generally comfortable with where they stand and the basis on which we underwrote the initial decision to begin spending development dollars in them. It's something that we obviously track on an ongoing basis. At certain points, as a project matures, we are able to hedge some of that commodity exposure. We keep track of that and obviously take advantage of that at the moment when the opportunity is available for us to hedge. I'll leave it like that. Of course, in terms of interest rates, we also similarly include a buffer in all of our financial models, particularly on projects where you have an offtake agreement that is not indexed to inflation. We try and account for that in the project model to make sure that we have adequate buffer. Okay. Putting it all together, you're comfortable you'll achieve your target returns on the development projects that aren't under construction? We are. Okay, great. Sticking on the topic of hedging, you gave us some color on the APX pricing and the derivatives you had in place. Sounds like you've closed out the position. Wondering if you can give us some more color on how the derivatives were structured and the impact we're going to see if you have closed out that position? Is that primarily a Q2 event, or is this going to be spread through the next few quarters? I'll start off, then I'll hand it over to Pauline. I think we're well on our way to closing out our position in 2021, 2022, and 2023, where we have hedged a smaller portion of the cash flows in both years. That process is just starting now. I'll turn it over to Pauline to give you a bit more color on the actual derivative and the impact. The impact will occur over the balance of the year as revenue is earned under the contract for Gemini. It won't be exactly even through the quarters, but it'll follow the revenue pattern of Gemini. Okay. Can you give me some color on how the contracts were structured? Sure. It was basically the contract put in a floor below which we would not suffer any further loss. It was basically to protect us on the downside if the APX price continued to fall below the SDE floor price, where we would suffer economically under the SDE contract. To the extent that the APX price rose above the floor, we would have to trade back, give back some of that upside going forward. As we articulated in the introductory remarks, once the APX price on a sustained basis, settled in the first quarter of this year above that floor price, we deemed that those hedges were no longer effective, and we put in place swaps to basically offset those hedges going forward. The impact of that will be realized as those swaps come due going forward. Going forward now, because of where the APX price is, it's actually very economical to buy puts right at the SDE floor level and have that to be the downside protection going forward. We have better options now to protect against the downside than we had. That's right. when the APX price was lower. At this point last year, when the pandemic was just starting and it was unclear how long it would last and how significant the economic impact would be, at that point, the correct decision in our view, was to protect ourselves against the downside. Now that there doesn't seem to be that downside risk in the immediate term, we're unwinding those hedges. We, as Pauline said, now have the opportunity to buy a fixed price put option, which will protect us moving forward against the downside in future years. Great. Thank you for the color. Our next question comes from the line of Sean Steuart with TD Securities. Please proceed with your question. Thank you. Good morning. First question is on Spain. Mike, you touched on the part of the motivation here is to participate in future onshore growth, given aggressive procurement targets at the country level. Can you give us some detail on the organic opportunity set tied to this acquisition and how you're thinking about organic development versus M&A driven opportunities for onshore renewables in Europe? For sure. Sean, as you know, while any large platform of operating onshore renewables is much sought after these days and trades at a pretty high valuation. We think we were able to secure this platform at what we view in the current market context to be a reasonable valuation, is the diversity of it, which suits us well in terms of the mixture of solar, wind, and also concentrated solar. We think for other perhaps more passive investors, the diversity was less appealing. What we see going forward in terms of growth in onshore renewables is generally not going to be in acquiring larger platforms. As you know, we haven't generally participated in that market in terms of M&A. Where we see the opportunities going forward in Spain is number one, it's a highly fragmented market in terms of ownership of renewable assets. We've identified about 9 GW of portfolios that are between 100 MW and 200 MW. We think as either those portfolio owners look to exit or as we hopefully approach them, that we'll be able to secure bilateral acquisition opportunities at more favorable economics than you see in well-marketed larger scale platforms for renewables. That's number one. Number two is in time, we would look at development as well. There's a very ambitious growth target, I think of 35 GW- 40 GW of new renewables in Spain by 2030. They also have specific storage and hydrogen objectives in Spain. We'd also see as a good platform to participate in that growth. That will take a bit more time to develop a strategy over that. We've also noted that the last procurement was quite competitive. We want to take our time and come up with the right development strategy. In the meantime, it would be more of a focus on acquisition of either smaller late-stage projects or smaller operating portfolios. Thanks for that detail. Second question, in late April, Ørsted identified some issues with their offshore cable protection systems. They're spending a lot of money to retrofit some of those assets, and it looks like most of them were built around the same time you guys built out your European platform. Can you comment on comfort that this won't be an issue for Northland? Does this have any bearing on your thoughts for future offshore wind project CapEx and potentially returns? At all three of our facilities, we did look into our interconnection cables, our inter-array cables as well at the same time and looked at the cable protection designs that we have. The Nordsee One project uses a very different cable design, a much more robust cable design. Our view is that it would not be impacted. Nevertheless, we do regular underwater inspections of those cable and protection systems, and we will continue to do so at Nordsee One and perhaps pay a bit more closer attention to ensure that this different cable design, protection design system proves as robust as we think it will be. On the Gemini and Deutsche Bucht wind farms, they do use a similar cable protection design, albeit a more recent design than Ørsted uses. Our subsea inspection campaigns have not identified any issues on those. In some ways, Ørsted's news does give us a good opportunity to add some more rigor and some more detail to those inspection campaigns. As long as you identify the deterioration before it breaches the protection system on the cable, the protection sheath on the cable, it can be easily repaired at a relatively low cost. The problem is as per Ørsted's announcement, is if you don't identify it early enough, the repairs can be very costly. We've scheduled in our 2021 survey campaign for Gemini and Deutsche Bucht, to not only we'll be doing the inspection campaign anyway, but to add some more rigor to it to make sure that we do identify any issues. There is also the impact of the sea currents, where the projects are located. I believe the Ørsted's U.K. projects are in an area which would have stronger currents, which would cause more movement as well. Nevertheless, it's a good opportunity for us to track these cable protection systems more closely to ensure we don't get in the same position. To be clear, we have identified no issues in all of our inspection campaigns on our cables. Okay. Thanks, Mike. I will get back in the queue. Our next question comes from the line of Nelson Ng with RBC Capital Markets. Please proceed with your question. Great. Thanks, and good morning, everyone. Quick question on Baltic Power. I think a few months ago, they set the, I think the maximum price, and I think it translates to about, I think EUR 68 per MWh. Can you just give some more color as to how the actual price is set and how it relates to the maximum price? What's the process in setting the final price? David can jump in here as well, but I believe that the initial PPAs that were CFD contracts that have been issued so far have been at the maximum price level to the project. They're more or less seem to be issued in the order of application, roughly. It is identified as the maximum price, but so far the CFDs have been issued at that price. I'm not sure if that answers your question. David, is there any other color you'd add to that? Yes. No, that is correct, Mike. It's a fairly structured form filling submission process. First, and then considered on a sort of an application time-based. Those who submitted first have been considered. Those who have been awarded now have received at the maximum price, PLN 319.6, which I say depending on the FX rate, is around EUR 70. Yeah, as Mike said in his introduction, we're in that process. There's a Q&A back and forward, some clarifications. That's what we're just answering those questions at the moment. We expect to receive in the next couple of weeks. Okay. You're obviously in the queue, and you're pretty confident that you'll receive a contract as well? Absolutely. Yes. Okay, great. Just following up on Rupert's comment on cost escalation and inflation. You mentioned that there's two wind projects in New York that will reach completion by the end of next year. In terms of locking the price, would you be fixing your construction price over the next couple of months or at the end of the year? Can you just give a bit more color as to timing? Yeah I guess on a related question, can you also talk about Taiwan, which is obviously a much bigger project, and I think its financial close still expected for sometime mid next year, so I guess you'll have to lock in your price sometime mid-year, mid-2022. Steel prices would get locked in at the point that we sign the turbine supply agreement, execute the turbine supply agreement. On the two projects that would be going to construction this year, in New York, those contracts have been executed, and the steel price has been locked in. We're also moving to secure the balance of plant contracts as well, which will lock in the balance of the cost in the projects. With respect to Hai Long, the current intent is to reach financial close in third quarter of 2022. That's a track we're on. We would be in a position to enter into supply contracts before that, at which point we would be locking in steel prices. As I said, there may be other opportunities to hedge some of the exposure to commodity prices moving forward as well, prior to locking in the supply contracts. On the interest rate side, we are hedged for 20 years on the New York projects as well. As soon as we know sort of the structure term of debt, we do hedge. For how long, that's something that's in process, and as that starts to get structured and firmed up, we would love to do the same. Okay, thanks. Just one last question on Taiwan. It looks like there's going to be a few years of offshore wind RFPs in Taiwan. I think in the past, Mike, you mentioned that you're working on about 1.8 GW of offshore wind on your own. Can you tell us or give us a bit more color as to the landscape in Taiwan? Has the land grab happened already? You're working on that 1.8 GW, and is it difficult to grow that development capacity right now? Well, David's obviously closest to that, so I'll turn it to you, David. Yeah, I can pick that up. You would have been tracking the news, so the rules for what's called a Round 3 were announced, I think it was, depending on your time zone, I think it was yesterday or the day before. We're just analyzing the detail of that. That's the positive news and the confirmation that we were expecting that Taiwan will contract for further offshore wind. That's been good news this week. In anticipation of that, and as Mike has referred to in the past, we have been basically identifying the coastline and where we think the optimum sites are. It has actually been announced locally in the press in Taiwan, the two sites that we're looking at. We're developing those sites at the moment. Yes, it's getting increasingly crowded space off the coast of Taiwan. There are still some good sites which we believe we've identified and are developing, will have ready to participate in the Round 3. Okay. Just to clarify, those two sites relate to the 1.8 GW, or they're in addition to those? It's part of, yeah. Okay. Got it. Thanks. Our next question comes from the line of David Quezada with Raymond James. Please proceed with your question. Thanks. Morning, everyone. My first question just, I guess, related to the European market in general. We've seen carbon prices move quite a bit higher recently, and I believe there's even been some commentary from other players that PPA prices have gotten higher. I'm curious, I know you certainly have a strategy of being a first mover in new markets, but do you see things shaping up in such a way, potentially in Europe that the combination of higher carbon prices and potentially, I guess, a corporate PPA could be an attractive proposition for you, either for offshore or onshore, I guess? I think that's a correct observation. As you know, we've got two expansion projects on Nordsee One, Nordsee Two and Three, a total of, call it roughly 900 MW between the two. On those projects, we have a step-in right. We basically can match the winning bid on those sites in the procurements that are scheduled for 2020, this September on Nordsee Two, and then 2023 on Nordsee Three. The step-in right, we basically have to accept whatever the winning bid price is. We've been running various scenarios, obviously, from a zero- subsidy bid, which has been seen in Nordsee offshore wind projects in the last few years, all the way up to the ceiling price of, I think it's EUR 70 or EUR 74. David would be tighter on that number than I am. We've been running all these different scenarios. Obviously, in the scenario where you've got a zero- subsidy bid or a lower subsidy bid, you're going to be looking at what revenue you can recover from the market, either through merchant revenue or preferably through, as you say, a corporate PPA. I think for that project, what we're seeing on carbon pricing has been encouraging, the trend lines. The other thing that is encouraging on that project and other future offshore wind projects, too, is the increasing pressure that you're seeing on large, particularly listed companies, but also private companies, to procure renewable power. Certainly, the one way to get it at scale is through offshore wind projects. It is something that we're very focused on, and we have a head of origination, as you may know, offtake origination, who's based out of London now and is working on the N2 opportunity and other opportunities. That's great color. Thanks, Mike. Maybe just one more, maybe since David is in Japan right now. Just wondering if there's any update on the early development activities in Japan and Korea. Anything you can share there? Yeah, David. I guess the most key event that's happened is the, remember in Japan, we have the different rounds, and our Chiba project, we are positioning to participate in Round 3. That's progressing well. The Chiba prefecture has, in the use of sort of layman's terms, put their hands up to the government for that round to be included or that area to be included into the third round. We don't know the outcome of that. We'll know that later this year. If so, that's a great confirmation of the project will then be able to bid into the Round 3. Project development continues on track for that to participate in Round 3 if it's chosen. That's good news. In the Dado project in Korea, on track. The key milestone there, I think we've talked about before, is the securing your electricity business license. We remain on track to secure that this year, based on the project activities. Yeah, the two key highlights in those two markets. Excellent. Thank you very much. I will get back in the queue. Our next question comes from the line of Ben Pham with BMO. Please proceed with your question. Okay. Thanks. Good morning. I wanted to go back to some of the questions around raw material costs moving higher. It looks like you're well protected with your buffer and given the fact a lot of your projects, you're not going to put the shovels in the ground a few years out. It's far more the developers that are building next one or two years. You've seen steel, copper go up more than 50% over since last August. It's been quite incredible. I'm wondering maybe more a broader question then is, we've seen cycles like this in the past. You have inflation in the 1980s. You had these PPA contracts with inflation protection. This commodity boom in the past. The industry's seen this before, and it's more the consumer that's been hit. How do you see this playing out then for the next couple years here? The move has been pretty powerful. Is it really the consumers that are going to take the pain of this increase? How does the industry respond here? Well, certainly on any offtake agreements that have not yet been allocated, and where there's a bidding process, then it will get translated into higher bid prices, and the same thing with a corporate PPA. In that case, it would probably all other things equal, create a higher price on a corporate PPA as a result. On existing PPAs, as I said, we keep a close eye on that, particularly any existing PPAs where there's no indexation on that PPA. We keep a close eye on it. To be clear, there's an overall contingency in all of our budgets to account for a number of different unforeseen circumstances, including movements on commodity prices. Yes, to some extent, it will be absorbed by the offtakers, but other extents, it will have to be factored in and absorbed by contingency, in primarily the developer's budget, but also there's contingency in the supplier's budget, too. There's a point at which a developer will choose to decline to procure equipment if the price is too high. I think it shakes out on both sides. It depends on the nature of the offtake agreement and the stage of the project. Okay. It seems like there's a share situation, but the direction sounds like the power price could potentially go higher here. Can I ask you, do you get the sense that in some of these recent bids that you've seen where prices have been really low and you've backed off because of the behavior that those developers are bidding on expectation that levelized costs are going to continue moving lower versus using today's equipment cost to derive the returns? Yeah. To be candid, Ben, for better or for worse, we have not really played that game in the past. To some developers, it has worked in their favor, and some others have been caught out. We generally have not played in that game. You see it in the most pronounced way on solar projects in the last few years. I think some of the movement in commodity prices will, going forward, discipline some of that behavior because it will indicate just how unpredictable supply prices can be overall for equipment for a project. I think in the last couple of years, there's been some fairly big swings in solar panel prices as well. I think all of that together will, I hope, discipline some of the more aggressive bidding and procurements going forward. As you know, we've got some solar projects we're developing in New York State. We'll see how that plays its way out. Okay. That's good to hear. Maybe keying on the Spain side of things, are you more focused on developing that market out first before looking to adjacent markets? Right. I think what we've communicated at Investor Day was that we've communicated our focus on New York State, Colombia, given in terms of what we see as growth in both those markets and renewables. We communicated that we were looking at Eastern Europe, select markets in Eastern Europe, where we see still a lot of coal in the grids. We also take comfort from the fact that a number of those countries are part of the EU, and we see a positive long-term economic trajectory for those countries. We see a near-term need for both at a state level, but also at a corporate level to procure renewable energy in those markets, given the carbon intensity of the grid. That would be the other market that we would be open to in the near term if we found the right opportunity. Given the state that those markets are at in Eastern Europe, it would more than likely, if we did anything, be more of a development play, as opposed to something with operating assets. Very helpful, thank you. Our next question comes from the line of Andrew Kuske with Credit Suisse. Please proceed with your question. Thanks. Good morning. I guess the question's for Mike. When you start to think about just the longer-term nature of returns and the big capital needs for offshore wind, does that really help preserve the competitive advantage for some of the early movers like yourself on a longer-term basis for this industry? Could you just repeat the first part of your question again? Sorry. If we just think about offshore wind and how long it takes to bring a project online, to win a project, to bring it online, and just the capital that's involved, it limits the audience on this. We've seen in other aspects of renewables, a lot of money chasing things. Yeah. Do you see your competitive advantages being preserved, in part because of those realities of offshore wind? I mean, I'm mixing my analogies maybe, or my metaphors, but there's a moat around offshore wind, a greater moat around offshore wind than there is around onshore renewables. In other words, a greater barrier to entry, both in terms of the talent that it requires to both develop and construct the projects, but also, as you say, the length of time that it requires and the development expense that it requires to move the projects forward. As well, there's new markets still opening up for offshore wind. In our view, the way to secure these projects and move them forward successfully is to, in most cases, get a good local partner, like we did in Poland and like we've done in Taiwan and in Japan. Sorry, I got a bit of a beeping in my ear. I'm not sure if it's my headset. I think in all of those, we see ourselves as having a bit of an advantage that we want to leverage moving forward. The two defining characteristics of our sector right now, and I think for the near-term future at least, is the need for a lot of additional renewable energy supply in a lot of markets around the world to meet carbon reduction goals. Number two, just the amount of capital that's coming into the sector, right, to invest in renewable assets. That means, to me, that the best opportunity right now is in developing those projects which can supply the energy and create an investment vehicle for the capital that's coming in to the sector. That's what we're looking to do with offshore wind, where those projects have a scale, too, which allows us to bring in other investors into those projects alongside our own capital. If I may, just as a follow-up to that and really build upon the farm downs that you plan on doing in the future, just given the uniqueness of the offshore environment and the few players, do you think you have greater preservation of returns and farm downs than you would, say, if you were trying to do the same thing with onshore renewables, whether it be solar or wind? I think there's probably a greater lift that you can get on the farm down. To be determined, because I think you're starting off with a better return in offshore wind. Given the scale of the investment on the farm down, you're probably attracting a larger pool of investors, so you probably have a bigger spread there. That's to be determined. That's the thesis. I'd say the answer is probably yes. Until something's done, I never like to get too far ahead of myself. Okay. That's great. Thank you. Our next question comes from the line of Mark Jarvi with CIBC Capital Markets. Please proceed with your question. Thanks. Good morning, everyone. Just a continuation of the discussion on procurement and trying to lock in costs. Looks like you've expanded the turbine supply agreement in Taiwan to Hai Long 2B and 3. Are those costs all set for Taiwan? Are there options in the agreement with Siemens in terms of procurement of turbines for Baltic Power or N2, if you do that, in terms of being able to sort of also lock in some indicative pricing on other projects that you're looking at doing? Good question, Mark. On the second part of it, there's no explicit connection to any other projects. As you know, we have different partners on different projects as well already, right? There wouldn't be anything explicit in the contracts on that, on the supply contracts on that. Your best leverage with any supplier is other opportunities for them, right? A pipeline. Having the pipeline of offshore wind projects we have globally coming up, it certainly, in our view, enhances our negotiating position with any turbine supplier and other suppliers to our projects as well, but particularly turbine suppliers. The prices or the costs on those Taiwan projects will not be locked in until we execute the turbine supply agreement and the associated service contract, which we wouldn't anticipate being in a position to, and we have never anticipated being in a position to do until the end of this year or the first quarter of 2022 as we work through the local supply chain and confirm on Hai Long 2A the local supply commitments that we have to make according to the industrial relevance plan that we referred to in the script at the beginning. As well, just working with the regional supply chain on the balance of the procurement for the project. We'd expect to be, as I said, locked in end of this year or early 2022 on the supply prices. Okay. Just coming back to the sell- downs or the farm- downs, continue to see a number of deals get done. When you track some of the deals that have been done, either operating assets like Hornsea sell down in Ørsted or even some of the processes that happened already in Taiwan, have you been able to triangulate what is sort of the difference between the returns and the buyer's IRR at a project at financial close versus COD and how those sort of relative time points in terms of you trying to optimize your returns, how you've seen other transactions play out to inform your view of whether or not the sell down at financial close is, are you leaving money on the table at that point? I'll flip it to Pauline because we had walked through an example at the investor days back in early February. High level, while typically a sell down at financial close would seem optimal, and particularly if you end up guaranteeing some of the construction costs, then arguably you could get the lowest cost capital at financial close on a sell down. There are other reasons to do sell downs earlier, both at the project level, or there can be other reasons both at the project level, but also from a Northland standpoint as we manage how we fund our portfolio globally. There are multiple considerations in terms of when we do the sell-down. We are seeing more interest from investors in coming into offshore wind projects in particular, at earlier stages. That perhaps does change our calculation a bit on it. I know Pauline would. Yeah. Our strategy right now for the most part, is still to sell down in and around financial close and all the transactions, we look at each and every single one, and I think that the metrics that we showed our Investor Day still hold intact, right. In that example, we put out that illustrative 10% of 300 basis point promote, which is going to be lower or higher depending on the market and the specific nuances and risks of each project. Each project is different. In that case, that means the buyer's IRR is 7. I think that still feels reasonable to us, looking at recent transactions. Just to Mike Crawley comment about the number of buyers, the people that would've been there at post COD or operating assets are essentially migrating closer to financial close. Do you still think there's a very strong competitive tension out there at the time of the sell-down at financial close? It's interesting because I think what we're starting to hear more of is interest to come in earlier because it's very competitive to come in at financial close. If there is an avenue to come in earlier, we are hearing more and more interest for that. I think time will tell. Okay. Thanks for the answers. Appreciate it. Thank you. Sure. Mr. Crawley, there are no further questions at this time. I will now turn the call back to you. Well, thanks everyone for joining us today. We will hold our next call following the release of our second quarter 2021 results in August. In the meantime, we thank everybody for your continued confidence and support. Ladies and gentlemen, that does conclude the conference call for today. Thank you for participating, and have a pleasant day.