Driving toward net-zero in the Canadian energy industry: A conversation with Avik Dey, CEO of Capital Power

Avik Dey, the CEO of Capital Power, sits down with Heidrick & Struggles’ Sean McLean to discuss Dey’s journey leading the company in its growth and expansion plans across Canada and the United States, as well as accelerating its current strategic drive to net zero. Dey, who has seen the energy industry from multiple viewpoints, including in board, executive, operational, investing, and senior advisory roles, shares what he thinks are Canadian leaders’ areas of expertise as well as areas of growth and offers advice for other Canadian leaders looking to compete internationally for the best talent against that backdrop. Finally, he discusses how he and his team prioritize where to focus, what to learn, and which expertise to bring onto the team regarding the drive to net zero.

Below is a full transcript of the episode, which has been lightly edited for clarity. 

Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation. 

Sean McLean: Hello. I’m Sean McLean, partner in charge in Heidrick & Struggles’ Calgary office and a member of the global Industrial and Financial Officers practices. In today’s podcast, I’m joined by Avik Dey, the president and CEO of Capital Power, an independent power-generation company based in Alberta, Canada.

Avik leads the company in its growth and expansion plans across Canada and the US and champions the team in accelerating its current strategic drive to net zero. Avik is a seasoned global executive and transformational leader with over two decades in the energy business, in roles spanning operations, entrepreneurial ventures, investment banking, and corporate advisory services.

He’s invested over $12 billion in growing long-term value for energy and energy-transition companies. Before joining Capital Power, Avik was managing director, partner, and co-head of Carlyle International Energy Partners. He was also the CFO and chief transformation officer for NOVA Chemicals, a leading global polyethylene producer.

Previously, Avik served as managing director and head of energy and resources at the Canada Pension Plan Investment Board (CPPIB) and was a member of the global leadership team, chair of the energy and resources investment committee, and a member of the real assets management committee. Under his leadership, the energy and resources group grew from an idea to a leading global investor focused on energy transition.

Avik strongly believes in fostering the next generation of entrepreneurs and currently serves as the director of Enactus Canada, an international nonprofit helping university students solve the world’s biggest problems through social innovation. He has previously served on the boards of Calpine Corporation, Seven Generations Energy, Teine Energy, Wolf Midstream, and Crestone Peak Resources.

Avik, thanks for joining us today. 

Avik Dey: My pleasure, Sean. Excited to be here with you. 

Sean McLean: You’ve had this fascinating international career. You could have continued to work anywhere in the world, but we managed to attract you back to Alberta. Tell us a little about your journey to becoming CEO of Capital Power and what excited you most about taking on the role. 

Avik Dey: Thanks, Sean. My journey has been a fascinating one, and one of the most important parts of it is that I’ve been able to surround myself with exceptional people, amazing mentors and leaders, and, more importantly, people who owned my outcome, if not as much as I did, which allowed me to have these incredible experiences across different industries and to take on different roles, which is really what has brought me home.

The most exciting part about coming home is the agency being associated with where I grew up. Being able to come and lead an organization in a business community that I grew up looking up to, where there are some of the most exceptional leaders of our generation, in a community that is a world leader in the energy sector, is a huge honor. But beyond that, in Alberta, particularly, and in many parts of Western Canada, there’s always been this spirit of entrepreneurism that’s reigned here and that dates back more than a century.

In addition, I’ve spent the better part of the past decade focused pretty heavily on industrial decarbonization. And the energy industry here in Alberta has been at the forefront of innovation, leaning in on policy, establishing a framework for decarbonization and energy transition, and I think we’ve established ourselves as a leader in the space globally. And so the opportunity to come home and be part of a company that is at the forefront of that change is a once-in-a-lifetime opportunity.

Sean McLean: We’ve followed your story with interest for many years. It was pretty exciting for me, as a third-generation Albertan, to play a role in bringing you back to Alberta and such a great company like Capital Power. Specific to the energy industry, you’ve obviously seen it from multiple viewpoints: board, executive, operational, investing, and senior advisory roles. What are we doing well and what must we do better in Canada? 

Avik Dey: In Canada, we’ve always had this spirit of innovation and entrepreneurism. I think that’s what has made our country special on a world stage, and that dates back decades. When you look at some of our most impressive contributions to society or the world at large, whether it’s the Canada arm of athleisure wear or building some of the greatest energy companies on the planet, it’s always been on a foundation of innovation and expertise. And part of that’s been created by the strategic moat that we have around our country that allows for these companies to groom and prosper and grow. But part of it is just the fabric of who we are. We all grew up in a very cold place with a harsh climate, so there’s a resilience factor that we all grow up with, and I think that’s enabled a lot of success in Canada and part of why we’ve thrived historically.

Sean McLean: Avik, I’m glad you mentioned some of the Canadian success stories. You and I recently spoke, though, of the emergency “break glass” situation that we have with Canadian productivity levels continuing to lag. How do we reverse this trend, and what role do Canadian CEOs play?

Avik Dey: What’s been interesting as globalization has proliferated, in particular over the past 30 years, is that we live in a more competitive and more connected world than we ever have. So the impetus is upon us to build companies in this country that are competitive here and abroad. And if we do that, we create greater wealth, we create more profit, we create more jobs, and we recycle more capital back into our country’s coffers, which contribute to GDP growth.

So the “break glass” element of where we are as a country now is that, over the past 30 years, we’ve had a massive reduction in productivity, and that’s been a result fairly directly from the different interventions that we’ve had in terms of policy, taxation, and even just interprovincial relations inside the country that prohibit growth or trade between our provinces. And where we are as a country is that the only ones that lose when we’re not successful is us. The only ones that gain if we are successful are us and everyone else. 

And so how we facilitate companies to do great things and allow for companies to grow and compete globally is systematically allowing for the free exchange of ideas and capital and competition. And I think that has been a foundation of democracies over the past two or three generations. That’s been under fire over the past decade as populism has run rampant. But fundamentally, if we’re competing in a world of free trade and exchange of products and goods and services, we have to encourage our companies to do great things.

And the role that CEOs have in that is that we have to be willing to vocalize and articulate what it is that we need, not just why things are not right or why things aren’t working. So whether it’s advocacy for specific trade policies, advocacy for specific policies regarding taxation, or advocacy for policies encouraging different industry growth mandates, we have to be willing to take positions and advocate for them, not just sit on the fence. 

Sean McLean: That’s well said, and I’ve seen you already doing that in your first year in this mandate. Thank you. That’s important and helpful work to hear CEOs taking a stand or expressing a point of view on these matters. The energy industry has been and will continue to be in an extended period of change and disruption as we drive toward net zero. In this noisy environment, how do you and your team prioritize where to focus, what to learn, and which expertise to bring onto the team? 

Avik Dey: First and foremost, energy transition is not a threat. It’s an opportunity—the opportunity to lead from the front in finding viable economic solutions to addressing climate change, whether it’s on the industrial decarbonization side or all the way downstream to consumer products. It is a multigenerational opportunity for us to lead, and we’ve been there and done that before on the industry side. 

So in terms of how we set our own priorities, it’s been a learning journey for us as well. Our company, in particular, in the early 2010s, prioritized reliability and affordability of electricity as we marched into our own journey on decarbonization or climate action. But the message that we conveyed was that you cannot compromise reliability and affordability for straight clean electricity. You have to do both. And as we’ve collectively progressed on that journey of decarbonization, I think society at large around the world has established that, in fact, you have to have reliability, affordability, and decarbonization to be able to ultimately lead us toward a net-zero future.

In terms of what we’ve learned through the past decade is that you have to prioritize what you’re good at and how you can contribute to the organization. I think we’ve done some incredible work on stakeholder engagement. When you think about the climate conversation, there’s historically always been three stakeholder groups. There’s been government policymakers, there’s been industry, and then there’s been capital markets who fund that growth. And that triangle, at any point in time, one of those nodes has been in front of the other. 

And if I look back to what’s happened in renewables, we’ve seen incredible growth: less than 1% in 2010 to now 14% of the grid here. But why did renewables proliferate? Not because it was cleaner, but because it was better and more efficient, and that allowed for significant renewable penetration. 

So as we sit here today and try and determine the best pathway to reducing emissions across the industrial complex, which is more than half of global emissions, we have to strive to find the economic pathways that get us there. We have to innovate technology to make it more economic. It’s not just going to be a policy imperative that gets us there. So addressing those three nodes of industry players, capital markets, and stakeholders broadly is what ultimately gets us to the next phase of decarbonization, which is the hard-to-abate stuff.

Sean McLean: You and I have talked a bit about the talent market globally, and I’ve shared that we’re continuing to see a war for talent that is really more a barometer of the pace of change and some demographic shifts than it is overall economic conditions. Do you have any advice for other Canadian leaders looking to compete internationally for the best talent against that backdrop?

Avik Dey: The world is an incredibly smaller place than it was 10 or 20 years ago. As I’ve worked around the world, what I have noticed is that in Canada, in particular, we are born from a historically hierarchical system in terms of how corporations typically work, because we’re a smaller place relative to other developed nations and, frankly, we have fewer large companies.

So that system of hierarchy or how you get promoted or how you move up in organizations or how you find new opportunities is still steeped in the historical construct of, Where did you go to school? How long have you been in the role?, and how well you comply within existing corporate dynamics and organizational structures. And I think the world has largely moved on from that. I think today’s best leaders are dynamic but empathetic, creative but analytical, curious but well-informed. So to be able to thrive in an organization today, you have to have a certain amount of agility, but also an ability to thrive in ambiguity. 

From a hiring talent perspective, it’s very easy to hire for what you think you need today. It’s a lot harder to hire for what you think you might want for the ambition you want to achieve. Putting yourself into that future lens of where you want to be in three or five years and whether this individual will help you get there is, for me, the most important thing in terms of talent development and hiring.

Sean McLean: It’s great advice, great observations, and very consistent with what we’re seeing and advising our clients on globally. Avik, as one of relatively few diverse CEOs in the industrial landscape in Canada, what can we learn from your journey that we should try to replicate? And how does DE&I factor into your strategic priorities for Capital Power? 

Avik Dey: This has been a real journey for me personally. Part of my own history is having grown up in Alberta and then moving away and working in different countries and different places. If you and I were having this conversation 10 or 15 years ago, I would’ve said, “I leave my identity at the door. It’s about performance. It’s about getting the job done. And who I am as a person is outside of who I am in the office.” And I really tried to live that. I don’t think that was right, but I didn’t know that 10 or 15 years ago. 

About five or seven years ago, a colleague of mine really brought this to light for me as I was coming up to speed on DE&I in the workplace. To be authentic, to create followership, to be able to try and push a movement, today more than at any other point in time in the past 50 years, you can only achieve that through authenticity. So my being able to share and own my own upbringing, my own cultural background, is what actually creates a safe environment to work in. It’s what creates followership. And so, for me, over the past five or six years, it’s been a journey of sharing who I am, where I came from, and what’s important to me, because I didn’t necessarily follow that throughout my career. So that has been a significant learning.

I don’t know that that’s something to replicate—I actually know that it’s not—but it’s part of a very deliberate shift that I’ve had to make. But it’s also been a liberating shift, being able to celebrate that. I’m very fortunate that at Capital Power DE&I has been a foundational tenant to our organization for a very long time. It’s part of the fabric of our organization in terms of how we develop talent, how we engage with stakeholders. I think there’s much more to do on that front, on the stakeholder front. We’re looking to continuously improve, but I think it is a big factor in how we think about partnering, how we think about being good partners in our communities, and how we develop and grow our organization.

Sean McLean: We’ve mentioned a couple times that you’ve worked and invested globally. So let me ask you this: What aspects of Canadian business culture do you think are the most distinctive that more companies would benefit from adopting? And, conversely, what aspects of other countries’ corporate cultures and practices could Canadian companies benefit from? 

Avik Dey: If you look at some of the most successful companies that have been born in this country, I think there’s a common thread between them, which is that we’ve thrived in this space between risk taking and conservatism, between being entrepreneurial but being in a space of discipline and growth. I think it’s partly cultural for us, but partly it’s just the foundational network that we have in a country of less than 40 million people and the ecosystem that supports great ideas and great people.

if you look at the industries in which we lead, whether it’s pensions, formation of AI, energy, or banking, they all have those similar themes of we can invest, test, and incubate technology, but we deliver the goods in terms of reliability, safety, and efficiency. In the banking world, that translates in how we manage our balance sheet and how we manage the risk. In the pension world, it translates in how we take risks and manage capital on behalf of beneficiaries, but still be cutting edge in terms of investment management expertise. And I think, for the large part, that’s been our special sauce. It’s, how do you play in evolving industries? 

Now, unfortunately, that also creates a ceiling and a floor. To be able to play, you need a certain level of scale or to have enough fortitude or market acceptance to be able to gain entry to the arena to play. And scale is a limit because we don’t focus on benefiting and amplifying the outliers because we’re more focused on preserving the ecosystem. So I think that’s what’s always been special. 

I think what’s also very unique about the Canadian capital markets is that we have a long history of incubating and encouraging and building small to midsize enterprises. That doesn’t exist in other places around the world. And I think the most specific example of that is what we’ve done on venture exchanges or the Toronto stock market. What the Canadian capital markets have done in the mining space, in the energy space, over the past 30 or 40 years in encouraging companies from around the world to come to this market to list, attracting investors from around the world, and having the ecosystem to build these companies is unparalleled. Now, as those industries are going through transition and maturing, I think we have an incredible opportunity to apply that to the net-zero future and do the same thing for those industries, but we also have to have the ecosystem that supports those industries.

Sean McLean: That’s so well said. For my part, I would love to see Canadian companies telling their story more on the global stage and to see more CEOs like yourself, with international experience and comfort in and understanding of the capital markets, which could really help Canadian companies continue to grow and thrive on a global scale. Avik, I always enjoy our conversations. This one was no different. Thank you so much for joining us today. 

Avik Dey: It’s my pleasure, and thanks for having me.

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About the interviewer

Sean McLean (smclean@heidrick.com) is the partner in charge of Heidrick & Struggles’ Calgary office and a member of the global Industrial and Financial Officers practices.