Preheat oven to 200°F. Place 2 nonstick baking sheets in oven.

Using a box grater or a food processor fitted with a grating disc, coarsely grate the onion. Transfer the grated onion to a colander and set the colander in a sink to drain.

Next, use the grater or food processor to coarsely grate the potatoes. Add the potatoes to the colander with the onion, and leave the colander in the sink to drain for a few minutes.

In large bowl, whisk together egg, flour, salt, pepper and baking powder.

Using a dish towel, gently squeeze excess liquid from the potatoes and onion. Add potato mixture to the bowl with the egg. Use your hands to gently combine the ingredients.

Heat 1 tablespoon of oil and 1 tablespoon of butter in a large skillet over medium-high heat. Scoop about ¼ cup of the potato mixture at a time, and place it in the skillet. Use a spatula to gently flatten the potato mixture into a pancake. Repeat with the remaining potatoes.

Fry the potato pancakes until golden brown on each side (about 3-4 minutes per side). Then use a spatula to remove the pancakes from the skillet and drain on paper towels. Once drained, place the pancakes on the warm baking sheets in the oven to keep them warm while you finish frying the rest of the pancakes in batches.

Use paper towels to carefully wipe out the skillet in between each batch of pancakes, adding 1 tablespoon of oil and 1 tablespoon of butter to the skillet with each new batch. Continue frying 3-4 pancakes at a time until you have used all of the potato mixture.

Serve the pancakes warm with applesauce, maple syrup or sour cream.