04:05 PM EDT, 05/30/2024 (MT Newswires) -- National Bank on Thursday noted that Hydro-Quebec, a Canadian Crown corporation public utility headquartered in Montreal, Quebec, wants to participate more directly in that province's "growing" wind industry, announcing it will take part in the development of renewable generating capacity.

With the potential for a doubling of power demand in Quebec by 2050, National said it is not surprising that Hydro-Quebec would want to take a more active role in developing, building and even owning wind infrastructure. Although this could reduce the addressable market for the independent power producers (IPPs), the opportunities for growth in Quebec should still be large, the bank added.

Pipelines, National Bank noted, are "large, diversified, and have not historically relied on large projects."

National noted that Boralex ( BRLXF ) and Innergex (INE.TO) have rarely participated in single projects that exceed 350 MW, given typically higher competition for larger projects. Today, BLX and INE have large pipelines at 6.7 GW and 10 GW, respectively, across multiple markets. National believes the experience INE and BLX have in developing and operating medium-size wind farms in Quebec should allow for competitive economics with Hydro-Quebec, which "has not been this involved in developing projects historically".

National noted Hydro-Quebec's participation in the Quebec wind industry could reduce the addressable market of the IPPs, though the bank said it should not come as a surprise given the importance of the wind industry to Quebec. National remains confident that both BLX and INE could be successful in securing medium-sized projects in the province and should also continue to pursue growth outside the province.

National has an Outperform rating and $16 Target on Innergex; and an Outperform rating an $43 Target on Boralex ( BRLXF ),