PwC alumnus Dan Balaban on the future of Alberta and renewable energy
PwC Canada’s Courtney Kolla, senior manager in the Audit and Assurance group in Calgary, sat down to catch up with PwC alumnus Dan Balaban, president and CEO of Greengate Power Corporation. Dan and his team develop wind energy in transmission-rich areas across Alberta. Greengate Power Corporation is currently working on eight projects totalling 1,450 MW on 165,000 acres of private land. Dan worked at PwC from 2001 to 2003 in the e-Business Advisory services practice and here are his thoughts on business and the energy industry in Alberta today.
Kolla: We appreciate you taking time out of a full schedule to catch up with us today. Dan, tell us more about your role with PwC during your three years with the firm.
Balaban: I worked in the e-Business Advisory Services practice which at that time was a stand-alone technology consulting practice that PwC had started.
Kolla: You’re now involved in the energy business, which is completely different. Tell us more about how that transpired.
Balaban: Yes, so to start with my educational background – I have a degree in computer science and I started my career at Ernst & Young. When I joined PwC, I was advising companies on how they could use Internet-based technologies to improve their businesses. Although what I am doing today is very different than what I had started out doing in my career, I actually see a number of similarities between what I was doing with the Internet at that time and now with renewable energy. When I got involved in Internet-based initiatives, it was all very new and we were moving ahead of the curve. The Internet has fundamentally changed the way we do business in a way that is similar to how renewable energy has fundamentally changed the way we produce and consume energy in terms of transformational attributes. I became interested in renewable energy as a kid growing up in the oil and gas industry — my father was always interested in renewable energy as an industry and that curiosity was passed along to me. I eventually started a successful software company called roughneck.ca, a leading provider of software for the oil and gas industry, that I sold in 2005. A key capability of our software was to help oil and gas producers manage and track their greenhouse gas emissions on an annual basis. So, you can see how I carried on my childhood interest professionally through the development software to help with some of the environmental issues that oil and gas producers need to address. I was drawn to renewable energy and when I sold my software company in 2005, I was looking for the next business opportunity.
Kolla: How did you become involved in business as a family? It must be great to have your brothers Jordan and Mike involved, and your father Jack working alongside you on the Board of Directors. How did that all come together?
Balaban: I am fortunate to have a close family. I think we are a rare example of families that get along well in a business context and I guess it’s just a passion that we all share.
Kolla: What opportunities do you see for wind or the renewable sector in Alberta and Canada?
Balaban: I see Alberta having the potential to be North America’s wind energy leader and I’m actually quite involved in advocating for a clean electricity policy in Alberta so we can have the right policy framework in place to meet our potential. Around the world, most jurisdictions have policies that specifically support the development of renewable energy. Alberta has a healthy oil and gas sector and it’s important that we continue investing in that sector as it drives our economy; however we are under increasing pressure to improve our environmental performance. The protest against the Keystone and Gateway pipelines are tangible examples of how the status quo is starting to affect our ability to conduct business. We have great natural gas resources, oil and among the best wind resources in the world. In terms of drivers, taking advantage of our clean energy potential could give us the social licence we need in order to operate traditional fossil fuel businesses and avoid negative situations. I think Alberta needs to look at diversifying its economy away from traditional oil and gas – continue investing in it but recognize clean energy as a tremendous opportunity that provides economic and environmental benefits. It creates jobs, improves our international reputation and cleans our air.
Kolla: What challenges do you see for the renewable energy sector? The topic of transmission capacity has been in the news recently along with talk around systems and upgrades.
Balaban: I think the main challenge that we have in Alberta is primarily policy driven. The transmission issue is more specific to the government planning and approval processes – I don’t think anyone is arguing about the need for new transmission. With the growing population base in this province and the growing economy, we haven’t invested in transmission for decades so the consensus is that we need new transmission. I think transmission will be resolved and that it is not a barrier for realizing our clean energy potential. The barrier is more around policies that are specifically supportive of investments in clean energy as opposed to investments in the status quo, which is the traditional electricity sector. The majority of our electricity in Alberta comes from coal, which is a very carbon, CO2 intensive process. There are viable options and the province could set a policy to choose clean alternatives over traditional ones. A new wind energy project cannot be economically competitive with a 40 year old coal plant. However, wind can be competitive with any new source of power generation if you take into account the environmental costs of doing business. We are not advocating for a policy of government subsidies but we are advocating for a policy that uses our existing free-market for the electricity sector to drive investment. In other words, we are not looking for government subsidies; we are looking policy-driven demand that enables the market to find the most cost efficient way of developing cleaner electricity.
Kolla: What risks and concerns do you see?
Balaban: Alberta has great resources with an open-for-business attitude from land owners to the provincial government, making it a favourable jurisdiction compared to many other parts of the world. However, we do need policy to drive investment in the clean energy opportunities we have, including wind energy. We are involved right now in financing the largest wind energy project in Canada called the Blackspring Ridge I Wind Project. We will be under construction with that project this year and right now, my concern is around the uncertainty in the overall global economy. Europe has been much more progressive with investment in renewable energy than we have in North America. The 2008 financial crisis was tough for everybody. People are concerned that unless the European Union sorts out their issues and the United States sorts out their issues, we’ll go back to a financial crisis.
Kolla: You spoke earlier about your father and the oil and gas business. Who were your mentors growing up?
Balaban: My father was definitely a mentor for me early on. My dad’s been an entrepreneur for almost his entire career, so I grew up in a family with a strong entrepreneurial influence. I was always a curious kid and close with my father who was always free with sharing his entrepreneurial wisdom and advice with me growing up and even to this day. I started my career at Ernst & Young and the first partner that I worked for was a gentleman named Peter Wood. He was among the most entrepreneurial partners and was doing all sorts of really neat things to adopt Internet-based technologies. Peter was amazing at thinking out of the box and innovation. I think this demonstrates that professional services firms can be innovative places to work.
Kolla: Is there one thing that sticks out in your mind from your experience at PwC that you have carried with you today, good or bad?
Balaban: One of the really interesting parts about my experience at PwC was the opportunity to be involved in starting up a new practice within the firm. Obviously, one of the reasons a firm gets a new line of business is by leveraging existing relationships. I had the opportunity to meet every partner in Calgary when I joined the firm so I could understand what their clients were doing, some of the challenges their clients were having, and to try to find a way to apply what we were doing as a way of adding value to PwC’s clients. I thought it was really interesting to have the opportunity to meet all the partners in the firm who are diverse and have a lot of really great business experience.
Kolla: What kinds of things have been helpful as a PwC alumnus?
Balaban: I think having PwC on your resume is always a good thing. I think it gives credibility to have work experience at a firm that has the reputation that PwC has. I think I learned some valuable things from the PwC experience with exposure to a diverse set of companies in many different industries and senior level access. It’s a really great way for me to have started my career and for developing the business skills that I needed in order to be successful as an entrepreneur.
Kolla: In terms of a service provider, what do you look for as distinctive client service?
Balaban: In the professional services industry it’s all about the people. A firm needs to have a good reputation because in our business, we rely on a lot of third-party support and we need to work with companies that are well known and respected to get the credibility. But then in terms of deciding on whom you work with, it’s all about the people.
Kolla: Lastly, what kind of advice can you offer young professionals from the perspective of a successful entrepreneur?
Balaban: Don’t expect things to be easy. I started my first company when I was 24 years old and it was at a time when the dot-com boom was going on and there was this perception that there was a lot of easy money out there to be made. I knew that I would have to work hard, but I thought that there was a high likelihood of being successful in a short period of time. Ultimately, I was successful, but it took much longer and was much harder than I could ever have imagined. So I think that whenever you get into an entrepreneurial initiative, you should expect that it is going to take longer than you think. You should expect that it is going to be a lot harder than you imagine and no matter how much you plan there will always be unforeseen events. I started Greengate Power in 2007 when there was capital all over the world and then we got hit by the financial crisis. It was not the first business that I started up. Greengate Power is the third business that I have started up. Having gone through some difficult times in my previous businesses and ultimately coming through that successfully enabled me to have confidence. So when we got hit by the financial crisis, it was just another bump in the road but I knew that we were going to ultimately get through it and I was not discouraged by adversity. That is ultimately how you need to look at things if you want to be an entrepreneur. You need to like a challenge — it’s often a difficult challenge and you need to find satisfaction in the process of overcoming challenges.