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Perspectives: The new energy system
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This episode of HSBC’s Perspectives series features Christine Healy, CEO of Northland Power, in conversation with Julian Wentzel, HSBC’s Group Chief Sustainability Officer. Together, they explore what the new energy system really means in practice, what it will take to build the power infrastructure of the future, and how we can unlock and direct capital towards the projects that matter most.
Watch or listen to find out more.
This episode was recorded on the sidelines of the HSBC Global Investment Summit 2026 in Hong Kong. Find out more https://www.business.hsbc.com/en-gb/campaigns/global-investment-summit
Disclaimer: Views of external guest speakers do not represent those of HSBC.
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Transcript
Introduction to HSBC Global Viewpoint
00:00:01
Speaker
Welcome to HSBC Global Viewpoint, the podcast series that brings together business leaders and industry experts to explore the latest global insights, trends, and opportunities.
00:00:13
Speaker
Make sure you're subscribed to stay up to date with new episodes. Thanks for listening, and now onto to today's show.
Introducing Key Speakers at the Summit
00:00:21
Speaker
Good morning, good afternoon, good evening. I'm Julian Wenzel, the CSO of HSBC. I'm here in Hong Kong at the Global Investment Summit. I'm joined by Christine Healy, President and CEO of Northland Power.
00:00:35
Speaker
Christine, you've had a lifetime in energy. Tell me a bit about your story in energy and where we are today.
Christine Healy's Passion and Northland Power's Projects
00:00:42
Speaker
It's a fascinating nexus in the world, and I think this is really your time. You've got three gigawatts under construction, you've got another seven to 10 in the pipeline. So this is exciting time for you and I'm really excited to be here with you today.
00:00:58
Speaker
Well, thanks, Julian. I'm excited to be here as well. And there's a lot of energy in the room here at the conference. It's ah hard to not be excited about the future of energy around the world. And you're right. I have spent most of my adult life working in energy. I have a lot of passion for it. It is, you know, not to be too pedantic. It is literally what makes everything else happen without energy. We just can't have the lifestyle and the progress that we want in society. So I have a lot of passion for that. And within Northland Power, it's a bit of a gem of a company, honestly. So we're publicly traded, we're listed on the Toronto Stock Exchange.
00:01:31
Speaker
We are active in a number of technologies. We do onshore wind and solar, we do offshore wind. We do grid-scale battery storage and we do gas-fired power. And we're active in Canada, in Europe, and here in Asia. And we have two very large offshore projects in construction right now. One offshore Poland, which was supposed to be Poland's second offshore wind project. It will be the first.
00:01:55
Speaker
and one offshore Taiwan, which we're very excited about, the Hylang project.
Complex Energy Needs and National Security
00:01:59
Speaker
We also just last year delivered Canada's first grid scale battery storage project and Canada's largest at the time. It was first of its kind and demonstrated that we can deliver on battery storage projects as well. So exciting days ahead for Northland, but it's a key part of just delivering the energy the world needs.
00:02:17
Speaker
Talking me about the energy the world needs, Before the events in the Middle East, there was a huge sense that we are on the cusp of an energy explosion. AI data centers requiring huge amounts of new energy.
00:02:33
Speaker
And the question was where that energy was going to come from. and Now we've got this significant choke point. How do you see the wall impacting your business, how people see renewable energy, how people see the multiple factors of energy that you can provide?
00:02:49
Speaker
How does this redefine your view of the energy system? I think when you look at the big picture, almost every country, every government is struggling with how do you solve for a number of things at the same time.
00:03:01
Speaker
We want reliable, affordable, secure, clean energy. So we used to say the trilemma, and that was hard enough, but it's at least four things that we're trying to solve for at the same time.
00:03:12
Speaker
And the answer is going to be different depending on where you are. In some countries, there's a lot of resource under the ground, be it in the form of natural gas or oil. There's a lot of energy under the ground that can be exploited to that country's benefit.
00:03:24
Speaker
Not every country has that. Some countries have excellent solar resources. Others don't. Some have wind resources. Others don't. So it's an energy mix that's different everywhere.
Adapting Energy Systems to Current Demands
00:03:33
Speaker
The one common thread, though, and it's interesting how all the old tunes come back again, but early in my career, we spent a lot of time talking about energy security as being so closely linked to national security. And for a while, that fell out of fashion. And now it seems to be right back at the front of everyone's thinking again.
00:03:50
Speaker
So to your question about what does that do for energy as a whole or for electricity generally, I think for a company like Northland, it is where we shine because we can bring different solutions depending on what the jurisdiction is looking for. So if you only have a hammer, everything's a nail. But when you can actually adapt to what different jurisdictions need, then I think you can really start to create some interesting solutions.
00:04:15
Speaker
Christine, let's double click a bit on the energy security and national security theme. um How do you see the energy architecture changing as a result? You know, the old system was a unified system.
00:04:28
Speaker
How do you see the new system that will address both the requirement for new power, the security of that power and the protection of that power grid from AI and and from potentially cyber attack?
00:04:39
Speaker
I think we have layered on top of this sort of resurgence of focus. no Many people kept focus on national security. I don't want to misframe that. But in terms of sort of the general zeitgeist, we were not thinking of it seemed top of mind.
00:04:53
Speaker
We are kind of entering, i think, a global super cycle in terms of electricity demand, though, because for many decades, we've had relatively flat demand sort of globally. And what increase in demand we had, we were meeting with energy efficiency, you know, better uses of electricity.
00:05:10
Speaker
But now, as you mentioned, we have a lot more demand for electricity. And just as we, you know, become more urbanized, as we move to more electrification, and there are more data demands for electricity, then we do see that there's you know there's the beginning of a very different cycle. And the question is, you know are we ready to tackle that and layer on top of it this element of national security and electricity and power security within your own borders?
00:05:35
Speaker
I think that's where renewables is actually a key part of the equation for many countries, because almost everywhere has some amount of renewable resource that you can tap into. And this can tend to be diverse, ah diffuse energy sources that help to create your own electrons that will power your own grid and don't leave so many vulnerabilities for future and And those disruptions are going to continue, like I say, over the course of our lives. We've seen many disruptions. And everyone feels like a shock, but we continue to have them. So I think we should probably expect they will continue in the future too.
00:06:09
Speaker
Some facts that are widely quoted, people talk about $5 trillion dollars per annum on the transition economy. People talk about $5 to $8 trillion dollars in the next five to eight years on AI expenditure.
00:06:21
Speaker
to really put us in play. Tell me a bit about where you see the choke points and the constraints to this new energy system. Is it technology? Is it capital? Is it regulation?
00:06:32
Speaker
Where do you think the world's going to pivot to so we can actually deliver this at pace and really meet the demand that's in front of us? I think the answer to
Challenges in Project Execution and Collaboration Needs
00:06:41
Speaker
that, in my experience, is different depending on where you are. When we talk about what governments are trying to achieve and the policy goals that they're trying to get to, i think that there are lots of very smart people who are on that.
00:06:52
Speaker
From Northland's perspective, we build things, we operate things. And to use the, to paraphrase the late, great Elvis Presley, we need a little less conversation, little more action.
00:07:03
Speaker
In other jurisdictions, we're seeing a tightening supply chain with this increase in demand. And you see a lot of potential projects moving forward. There are only a certain number of suppliers for those projects, a certain number of technologies available. So we do see some tightening on the supply chain.
00:07:18
Speaker
I think overall, there's a great willingness to move things forward. There's a risk that when it starts to feel like it's a a mad rush, then you get some undisciplined capital. That remains a risk. I think we've seen cycles of that in in energy generally.
00:07:33
Speaker
And I think we all have to stay disciplined through the cycle. And that's how we make sure the best projects get built and they get built in the best way. So for me, ah you have to maintain discipline even when things are moving moving fast.
00:07:46
Speaker
The scale of capital required is going to require coordination between private capital, banks like ourselves, and governments. So where do you think that capital is going to come from? And what do we need to do differently to get the capital flow to support innovative companies like yours?
00:08:01
Speaker
I think that where you have solid foundations for these projects and you can execute on them well, as long as we can price the risk collectively, be that private capital, public capital, governments, if we can price the risk appropriately, then I think capital will flow. And certainly in my experience at Northland,
00:08:20
Speaker
Good projects. we We have lots of interest in good projects. And so the world needs electricity. The world needs what we do. So I think the differentiator then is you have to be able to execute on these projects. That's where I think our special sauce is, frankly. And I think we don't see a big hurdle. Now, when you start talking about trillions and trillions of dollars and where is that money going to come from, sort of a global ecosystem perspective. It's a good question, but the answer is almost like that old parable, you know, how do you eat an elephant one bite at a time? It's literally project by project. And if we're bringing forward the best projects and we're executing on them in a disciplined way, then the capital will flow because people will get return on their investment from that, that they will deploy into
Strategic Project Selection and Consumer Challenges
00:09:03
Speaker
more projects. So fundamentally, I think if you try to approach it as ah as a gargantuan task,
00:09:09
Speaker
you're probably not gonna find a solution, but if you approach it project by project incrementally, it will get done. And we will look back 10 years from now and be astonished at what we've all accomplished. Talking project by project, obviously you're in a sweet spot, yeah you're in demand.
00:09:23
Speaker
How are you defining yeah the projects you choose? Obviously there are new technologies. I think people aren't prepared to pay the green premium any longer. I think there's a real commercial rationale why you should use sustainable energy.
00:09:35
Speaker
But how do you see your role in choosing projects? What projects do you choose? How do you see new technologies in that mix? you We have a partnership called Pentagreen Capital with Temasek.
00:09:48
Speaker
It's catalytic capital. We think there's a really important role to play for catalytic capital, but won't be the solution to the large scale projects. North on Power is a relatively small player. We do big projects, but we're a relatively small company. So we have to be very strategic about where we deploy our resources, both ah people and capital. So we choose quite carefully and deliberately. So we have some core markets where we're looking to grow.
00:10:13
Speaker
One of the areas that we're quite interested in is natural gas in Canada, because natural gas fired power in Canada, because Canada's natural gas price is completely dislocated from the rest of the world, as you're probably aware.
00:10:23
Speaker
And we do think that there's a great opportunity there for build out. that's how the company was started, you know, 38 years ago it was natural gas fired power. So it's it's sort of our sweet spot of what we've known how to do for a long time.
00:10:34
Speaker
We do really like offshore wind. We like those projects. We think we're very good at those projects. And I think others in our space would agree that we're good at those projects. So we see an opportunity set there. So when we look sort of holistically about where things are moving in the future,
00:10:49
Speaker
You talk about the green premium. will challenge you back and say, I'm not sure that consumers were ever really willing to pay that. you know I had a great discussion with a leader at a sort of home improvement chain who said, you know they put a bag of fertilizer next to another bag of fertilizer, and one is regular fertilizer, and the other one is a green fertilizer. The green fertilizer is maybe $1 a bag more expensive, and people will not buy it. So, at what point Are consumers willing to pay the green premium when it comes down to scarce dollars? And when we have an affordability crisis, a more and more expensive world, I mean, fundamentally, this is when we call it a trilemma, quadlemma, affordability is part of the equation. And so there is a real question for governments to grapple with as to, you know, what is the right affordable level and how do we balance the fact that we know we need more sustainable forms of energy over the long term? at the same time balance the affordability question.
00:11:44
Speaker
And I think the key is that country by country, even maybe regions within a country, the answers are going to be different because frankly their set of circumstances is going to be different. So the idea that we take one broad brush and apply that same policy and approach everywhere in the world, i think fundamentally just doesn't work.
00:12:03
Speaker
So it's why in Northland, I think it's very important that we can deliver in multiple types of technologies in order to solve the problem in different ways in different jurisdictions.
Impact of Economic Conditions on Projects
00:12:13
Speaker
you I think I'm very sympathetic to your view around the affordability construct. you know I think we're in the cusp of an inflation shock.
00:12:20
Speaker
And so I think we're all going to have to think about what does this inflation shock look like? Is that it going to be sustained? Is it oneself? and What's going to happen to the cost of capital? And with that increase in the cost of capital, what does this mean for the new energy system and how we fund the new energy system?
00:12:35
Speaker
Be interested to get your sense around, do you feel that you're going to have to redefine some of the costings of your projects? Or do you feel that that inflation wave hasn't come through yet? I think it's interesting. i mean, the the context changes, I would say, almost month by month, year by year. You know, a project that we have on the books now that we're thinking about, you know, we put pricing vectors in our estimates for these projects.
00:12:58
Speaker
ah And then it's interesting to look back and say, how often did we get that right versus wrong? I won't tell you the answer to that, but it's you know it's always interesting to look at. you know None of us have perfect crystal balls. Then you have to make the decision at the time, which is where I think the challenge comes from for governments and regulators, because then you might set your terms for an auction three years ago by the time the auction is actually coming to fruition, but the context will have changed in between. So that is a ah ah challenge for policymakers.
00:13:27
Speaker
For us as developers, we we just make our decisions based on what we see in front of us at the time. So we we have, you know, like probably most of our peers, we have decision-gate process. We take the best information that we have at that time and we make a decision, move it forward.
00:13:42
Speaker
If you zoom out for what does this mean for electricity systems generally, then cost of course is a big driver for every system operator, for every government, for every consumer. I think everyone pays attention to their electricity bill. And if the electricity bill is quickly doubling, you're going to have a lot of very unhappy people. Governments know that, they're aware of that. So we have to find the right balance because alongside, by the way, more electrons, we also need more transmission capacity, we need more interconnection, we need more robust and resilient systems, we have ah you know we have weather conditions to deal with. There's a lot of things that happen in this system that we plug into the wall. I mean, really, literally millions of people work to make those electrons come to the plug in the wall.
00:14:25
Speaker
The fact that it's a complex system is part of what makes it so fun. Maybe just get your sense on AI. Is AI gonna help you with speed to market? Does it help you with analysis of your projects?
00:14:37
Speaker
How are you using AI to amplify what you do and effectively define your route to market? AI, I guess maybe, Julian, I'm too old, but we used to call AI machine learning. You know, it just had not so nice of an interface, but we've been deploying machine learning and energy infrastructure for decades and using it for preventative maintenance or for taking the mass amount of data that we generate from assets in order to understand how we operate the most effectively. so That's been going on for a long time. Now the AI tools have really matured and can do a lot more. So, we're for instance with our battery storage project in Southern Ontario, we we deploy AI to figure out the best times and the best ways to deploy that battery capability. And certainly at the same time we do have human operators in our Peeker gas plants.
00:15:28
Speaker
And so it's interesting to compare the results of these two and, you know, who is delivering the better results. We will see over time. But certainly the AI tools are much more agile and nimble.
00:15:39
Speaker
I think you can't remove the human component of that, especially when it comes to electricity systems. I mean, Not to put too dramatic a point on it, but lives literally depend on electricity every day. So we can't get that wrong. When you're talking about life safety issues, you need to have a human oversight on that.
00:15:54
Speaker
And it will be some time before I'm satisfied that AI tools are able to make that leap. But in terms of assisting humans in their decisions, I think there's a lot of room for AI and I'm pretty excited about what we see with that. So thinking ahead, the next decade, it's going to be a challenging decade.
00:16:11
Speaker
Talk to me a bit about the opportunities for you this next decade and where do you think the biggest risk is for you? So
Growth Opportunities and Risk Mitigation for Northland Power
00:16:17
Speaker
I think exciting decade ahead. With challenge comes opportunity. And I think that's how almost everyone in the energy sector thinks about it. You know, we've all lived through multiple cycles and this is certainly a big cycle that we're all in the middle of now.
00:16:31
Speaker
So what does it mean for Northland? I mean, we have growth in front of us. We're we're growing in... ah Europe, we're growing in Asia, we're growing in Canada. And for us as a company, that's very exciting.
00:16:43
Speaker
Biggest risk, I would say, first of all, is we have to execute. The difference between the project on paper and the project in real life, the difference is execution. So we are laser focused on executing well, making sure that we have good local partners, that we are that we're good stewards of these resources, that we make sure we engage with our host governments in a good way. We really, we take that very seriously. It's a key part of how we do business.
00:17:07
Speaker
um We really like partnerships where our partners bring other perspectives to the table. We think it makes for better projects, so we intend to do that more in the future. In Canada, we have some indigenous partnerships that have been very fruitful for us, that have helped us understand our communities in a better and different way, so we work on that as we move forward. In Poland, we're partnered with Orlan, which is a Polish company. They understand Poland better than we ever could. Here in Asia, we're we're partnered with two asian Asian-based companies who really understand the dynamics here. So the partnership model is important for us and helps us mitigate this risk. You know, when you talk about greatest risks, it's purely around execution. That's what we do. All the white papers, all the debates, all the policy, we build it.
00:17:49
Speaker
And then we operate it for decades after that. So for us, we really need to understand the jurisdictions that we're in, and we need to make sure that we are delivering exactly as everyone expects.
Conclusion: HSBC's Commitment to Partnerships and Net Zero
00:17:59
Speaker
Christine, as we call close to this wonderful session with you, you spoke about partnerships.
00:18:05
Speaker
At HSBC, we really do believe in partnerships. We have a global footprint. We really are committed to Net Zero 2050. We want to deploy our capital at speed. um It's been fantastic spending time with you. Christine, really insightful, really excited for the next decade for you.
00:18:20
Speaker
And let's hope that yeah we can deliver the system for tomorrow. Excellent. Thanks so much. Thank you for joining us at HSBC Global Viewpoint. We hope you enjoyed the discussion. Make sure you're subscribed to stay up to date with new episodes.