A Microcosm of the Energy Transition

America is in the midst of an historic energy transition. Concerns about carbon and its role in climate change have spurred action by governments and private sector utilities to set mid-century carbon reduction targets, beginning with the retirement of legacy coal units.

With 42 wind, solar and natural gas generation projects across 16 states, Onward Energy is a microcosm of the energy transition in a single company. Beyond traditional sources of power, Onward Energy is leading development and investment in the next generation of clean, reliable power, including battery storage and hydrogen. Whatever the energy future holds, Onward is poised to be part of it.

Onward was formed through the 2021 merger of Southwest Generation and Novatus Energy, each majority-owned by the same investment vehicle, which represents the retirement monies of over 50 million families worldwide.

Justin Merkowitz, Managing Director, Project Finance, CoBank; John Foster, Executive Chairman, Onward Energy; Pedro Ejzykowicz, SVP, CFO, Onward Energy; Steve Doyon, CEO, Onward Energy

“We’ve reached a size where we can take advantage of our scale and expertise to accelerate our growth, with the support of our investors,” said Steve Doyon, Onward’s CEO. “But it is important that we pursue our growth aspirations in the right manner. We want to conduct our business in a manner that puts people first—with a focus on safety, and being mindful of our place in the communities we serve and the planet we call home.”

With the 2021 merger, Onward reached a critical mass of 4.2 gigawatts under management, which relied in part on a more than $350 million investment supported by CoBank and a syndicate of Farm Credit lenders. The financings include 24 solar projects, two wind farms, a portfolio of five natural gas assets and the company’s revolving credit facility which is used to support long-term capitalization and future merger and acquisition opportunities, several of which are already underway.

“We’re active in the market, and have done at least one major financing every year, as either Onward or one of the two legacy companies,” said Pedro Ejzykowicz, Onward’s CFO. “CoBank has demonstrated its professionalism and skill over multiple transactions as part of our lending group, and selecting CoBank to be part of these financings underscores our trust that CoBank’s team will get the work done efficiently and well.”

Pursuing its acquisition strategy, Onward is on track to double in size over the next five years. The company is focused on delivering reliable clean energy, helping eliminate the rolling brown-out situations that have occurred where renewable energy uptake has stressed the transmission grid.

“The tailwinds and policy drivers right now are all toward decarbonization, and the great progress in lowering costs has fueled a lot of enthusiasm for the energy transition,” said John Foster, Onward’s executive chairman. “Reliability is the remaining critical issue, which Onward is addressing by consistently adding high quality assets to support the country’s energy grid.”

This story was originally published in the CoBank 2021 Annual Report.