Energy giants take aim at renewables
Several of Canada’s largest energy and resource companies are quietly staking out positions in a sector that seems at odds with their usual extractive activities: the renewable power business.
Oil sands, pipeline and coal-power firms are now among the biggest players in renewables, with portfolios of wind, solar, small hydro power and ethanol production that in some cases outpace the holdings of most “pure” green companies.
Environmentalists and small companies in the sector are sanguine about the competitors; they welcome the big firms as a significant source of clout and capital that can add momentum to the shift to renewable energy.
“It reflects the reality of energy in the 21st century,” said Ian Bruce, a climate change specialist at the David Suzuki Foundation. “A lot of the innovation is happening at the small company level and then is getting [moved] up to larger businesses that have the capital to invest more.”
TransAlta Corp. has emerged as the biggest green energy player among the large energy firms. The Calgary-based owner of coal mines and coal- and oil-powered electricity plants already had a substantial portfolio of clean energy assets before it bought Canadian Hydro Developers Inc. last year. But with that acquisition, TransAlta became the biggest wind farm operator in Canada with more than a dozen facilities in Alberta, New Brunswick, Quebec and Ontario. These generate about 1,000 megawatts, almost one-third of the total wind power in Canada.
TransAlta also has more than two dozen hydro electric plants, along with a biomass facility and a geothermal project in the United States. Altogether, renewables make up more than 20 per cent of the company’s energy portfolio.
Pipeline company Enbridge Inc. also has a wide-ranging portfolio of wind farms, waste heat power plants, a geothermal project, and it owns one of the largest operating solar farms in the world, just outside Sarnia, Ont.
Meanwhile, Calgary pipeline operator Fort Chicago Energy Partners recently bought up three small-hydro operations – Swift Power Corp., Pristine Power Inc., and the B.C. hydro assets of Enmax Corp.
Oil sands developer Suncor Energy Inc. has been in the renewable game longer than most of the others, having built its first wind farm almost a decade ago. It now has four operating wind projects, and a fifth in the works, along with a large ethanol plant in Sarnia.
“We think of this as a parallel path to future growth,” said Gordon Lambert, Suncor’s vice-president of sustainability. “We saw renewables starting to emerge as an important part of the energy mix, [and] we viewed our step into the space as an early entry into a diversification of the energy supply system.” Wind and biofuels were chosen because they seemed to be the most commercially viable technologies, he said.
While Suncor plans to add one wind farm a year to its holdings, Mr. Lambert is loath to predict how large a proportion of its business renewables will make up. So much depends on access to power grids, provincial energy rules, and the shape of the still-undefined federal energy strategy.
It makes sense to have a diverse range of companies in the renewable business, he said. “You need to have those entrepreneurial players who are creating new ideas and innovating, then you need the big players for the growth stages of many of these technologies where access to capital is important.”
Small green energy companies agree. “The more that gets done, the better, whether it is by a pure play or by a traditional fossil fuel generator,” said Kent Brown, the former chief executive officer of Canadian Hydro who is now running a startup firm called BluEarth Renewables Inc. “We want to see projects get done and get done successfully.”
Tim Weis, director of renewable energy policy at the Pembina Institute, said the fact that large companies have the resources to shift “big money” into the renewable sector can be very helpful, and if they use their political clout to support it, that’s even better. One concern, however, is that companies may use their clean energy holdings as a token to show they are in game, but not take it seriously. And if government support policies shift to favour big companies – who prefer tax breaks over financial aid – that won’t help, he added.
Some traditional resource firms are just now dipping their toes into the renewable sector. Mining giant Teck Resources Ltd. recently signed a joint venture with Suncor to develop the Wintering Hills wind power project under construction near Drumheller, Alta.
John Thompson, vice-president of technology and development at Teck, said the company is interested in getting involved with clean energy projects in jurisdictions where it has mines – and consequently consumes a lot of power. The power projects may also generate renewable energy “credits” that could offset carbon penalties Teck might face in those jurisdictions.
Teck isn’t completely new to the electricity business, however, Mr. Thompson said. the company has owned a hydro dam in British Columbia since 1954 – it provides power to the company’s smelter in Trail.
Teck will continue to look at possible further renewable projects in British Columbia, Alberta, the United States and Chile, he said, although there aren’t any specific projects on the immediate horizon.
Mr. Thompson said his firm has received no criticism for moving into the renewable power sector, but has been welcomed as a new player and source of investment. “No one has phoned me up and said ‘You’re butting your nose in the wrong place,’” he said.
Oil sands, pipeline and coal-power firms are now among the biggest players in renewables, with portfolios of wind, solar, small hydro power and ethanol production that in some cases outpace the holdings of most “pure” green companies.
Environmentalists and small companies in the sector are sanguine about the competitors; they welcome the big firms as a significant source of clout and capital that can add momentum to the shift to renewable energy.
“It reflects the reality of energy in the 21st century,” said Ian Bruce, a climate change specialist at the David Suzuki Foundation. “A lot of the innovation is happening at the small company level and then is getting [moved] up to larger businesses that have the capital to invest more.”
TransAlta Corp. has emerged as the biggest green energy player among the large energy firms. The Calgary-based owner of coal mines and coal- and oil-powered electricity plants already had a substantial portfolio of clean energy assets before it bought Canadian Hydro Developers Inc. last year. But with that acquisition, TransAlta became the biggest wind farm operator in Canada with more than a dozen facilities in Alberta, New Brunswick, Quebec and Ontario. These generate about 1,000 megawatts, almost one-third of the total wind power in Canada.
TransAlta also has more than two dozen hydro electric plants, along with a biomass facility and a geothermal project in the United States. Altogether, renewables make up more than 20 per cent of the company’s energy portfolio.
Pipeline company Enbridge Inc. also has a wide-ranging portfolio of wind farms, waste heat power plants, a geothermal project, and it owns one of the largest operating solar farms in the world, just outside Sarnia, Ont.
Meanwhile, Calgary pipeline operator Fort Chicago Energy Partners recently bought up three small-hydro operations – Swift Power Corp., Pristine Power Inc., and the B.C. hydro assets of Enmax Corp.
Oil sands developer Suncor Energy Inc. has been in the renewable game longer than most of the others, having built its first wind farm almost a decade ago. It now has four operating wind projects, and a fifth in the works, along with a large ethanol plant in Sarnia.
“We think of this as a parallel path to future growth,” said Gordon Lambert, Suncor’s vice-president of sustainability. “We saw renewables starting to emerge as an important part of the energy mix, [and] we viewed our step into the space as an early entry into a diversification of the energy supply system.” Wind and biofuels were chosen because they seemed to be the most commercially viable technologies, he said.
While Suncor plans to add one wind farm a year to its holdings, Mr. Lambert is loath to predict how large a proportion of its business renewables will make up. So much depends on access to power grids, provincial energy rules, and the shape of the still-undefined federal energy strategy.
It makes sense to have a diverse range of companies in the renewable business, he said. “You need to have those entrepreneurial players who are creating new ideas and innovating, then you need the big players for the growth stages of many of these technologies where access to capital is important.”
Small green energy companies agree. “The more that gets done, the better, whether it is by a pure play or by a traditional fossil fuel generator,” said Kent Brown, the former chief executive officer of Canadian Hydro who is now running a startup firm called BluEarth Renewables Inc. “We want to see projects get done and get done successfully.”
Tim Weis, director of renewable energy policy at the Pembina Institute, said the fact that large companies have the resources to shift “big money” into the renewable sector can be very helpful, and if they use their political clout to support it, that’s even better. One concern, however, is that companies may use their clean energy holdings as a token to show they are in game, but not take it seriously. And if government support policies shift to favour big companies – who prefer tax breaks over financial aid – that won’t help, he added.
Some traditional resource firms are just now dipping their toes into the renewable sector. Mining giant Teck Resources Ltd. recently signed a joint venture with Suncor to develop the Wintering Hills wind power project under construction near Drumheller, Alta.
John Thompson, vice-president of technology and development at Teck, said the company is interested in getting involved with clean energy projects in jurisdictions where it has mines – and consequently consumes a lot of power. The power projects may also generate renewable energy “credits” that could offset carbon penalties Teck might face in those jurisdictions.
Teck isn’t completely new to the electricity business, however, Mr. Thompson said. the company has owned a hydro dam in British Columbia since 1954 – it provides power to the company’s smelter in Trail.
Teck will continue to look at possible further renewable projects in British Columbia, Alberta, the United States and Chile, he said, although there aren’t any specific projects on the immediate horizon.
Mr. Thompson said his firm has received no criticism for moving into the renewable power sector, but has been welcomed as a new player and source of investment. “No one has phoned me up and said ‘You’re butting your nose in the wrong place,’” he said.
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