In an effort to boost trade and economic growth, the Canadian government in 2016 launched a spending plan worth C$180 billion ($137 billion; €138 billion) to be invested in economic, social and green infrastructure over the ensuing 12 years.
The first phase of the Investing in Canada Plan was to pump C$26.9 billion into green infrastructure initiatives to reduce greenhouse gas emissions and improve climate resilience and environment quality.
One province leading the charge is Alberta, which legislated in 2016 to increase the amount of green energy produced in the oil-rich province, with a target to generate 30 percent renewable electricity by 2030.
In 2019, the province set itself interim targets to achieve its ‘30 by 30’ goal. At the time, roughly 10 percent of Alberta’s electricity was generated from renewable sources, and its Minister of Energy established targets of 15 percent by 2022, 20 percent by 2025, and 26 percent by 2028.
“Alberta is seeing significant growth in renewables, including the construction of Canada’s largest solar farm,” notes Ben Hawkins, head of infrastructure, renewables and sustainable investing with the Alberta Investment Management Corporation.
“A major contributor to that growth has been the attractive wind and solar resources found in Alberta, as well as a relatively attractive market design for power project developers. In many cases, these developers see renewable projects as providing as much, if not more, value from the green attributes (which increasingly can be monetised as carbon credits) as the electricity that is ultimately produced.”
The solar farm to which Hawkins refers is Travers Solar, jointly invested in by Copenhagen Infrastructure Partners and Canada-based Greengate Power Corporation. The facility is expected to cost C$700 million, be operational by the end of 2022, have approximately 1.3 million solar panels and have a capacity of 465MWac.
According to Josée Guibord – CEO of Evolugen, the Canadian operating business of Brookfield Renewable Partners – the renewables market “is more active than it has been in my recent memory. The only open market in Canada is in Alberta and that continues to develop its renewables and deployment, so we are looking there and developing our first solar farm from greenfield as we speak”.
In February, Evolugen and Scotiabank signed a 15-year power purchase agreement for solar energy from a new, 40MW project near Cardston, Alberta. Once operational, Scotiabank will become the sole proprietor of Spring Coulee Solar, purchasing 100 percent of the emission-free renewable electricity to reduce its greenhouse gas emissions. In its first year, the facility is expected to generate close to 60,000MWh of renewable electricity, enough for 9,000 Alberta homes per year.
Evolugen is also submitting its proposals for capacity storage contracts in Ontario, and is looking to develop batteries at various sites. In July, the firm won support from Sault Sainte Marie city council for its planned battery storage system. The C$300 million project would be located on 10 acres alongside Evolugen’s existing Prince Wind Farm, about 15 kilometres outside Sault Sainte Marie. Both Crown land and privately owned lands are under consideration.
“We see near-term investment opportunity in Alberta and Ontario, stemming from those provinces’ objectives of decarbonising the energy sector”
Renewables in a time of war
Before German Chancellor Olaf Scholz visited Canada this past summer and signed a Canada-Germany hydrogen pact, and well before Russia invaded Ukraine, Evolugen had already been in talks to help provide hydrogen energy to Germany as part of the country’s efforts to rely less on Russian natural gas. The company’s role is to own and build an electrolyser (which uses electricity to break water into hydrogen and oxygen) in Newfoundland, an ammonia synthesis plant, and to store the resultant hydrogen.
“In Newfoundland, we would transfer title to Germany-based Uniper, which would then ship it to Germany,” says Guibord, adding that the company is investing roughly C$2 billion into this particular project via Brookfield Global Transition Fund.
The Canada-Germany hydrogen pact “accelerates [investment opportunity] and puts Canada in a place where they need to act”, says Guibord. “They signed an alliance, but it puts a bit of fire in Canada to deliver on this. We see this as positive.”
At the government level, the Canada Infrastructure Bank is using public money to invest in renewables across the country. Hillary Marshall, group head of communications and public affairs with CIB, says the bank has priority sectors to invest in as identified by government – these currently include public transit, green infrastructure, clean power, broadband, and trade and transport, as well as a C$1 billion target for Indigenous infrastructure across these sectors.
“Our clean power investments include Oneida Energy Storage, Enwave District Energy and Atlin Hydroelectric Expansion with a value of up to C$850 million,” Marshall notes. She says Oneida Energy Storage – a joint venture between NRStor and Six Nations of the Grand River Development Corporation – will provide clean, reliable power capacity by drawing and storing renewable energy during off-peak periods and releasing it to the Ontario grid when energy demand is at its peak.
The bank’s Enwave investment involves expanding and enhancing the efficiency of its existing district energy system in Toronto. The expansion into new areas will allow connected buildings the opportunity to reduce their electricity consumption by up to 80 percent and carbon emissions by up to 60 percent. It is expected that greenhouse gas emissions will be reduced by 67,780 tonnes annually.
CIB’s Atlin Hydroelectric Expansion project comprises a new hydroelectric facility and transmission line to deliver clean power to the Yukon micro-grid. The intention is to sell 100 percent of the power to Yukon Energy Corporation, which will provide energy during cold winter months. “Our investment supports closing an infrastructure gap for 10 First Nation communities and seven municipalities in the Yukon Territory that currently rely on grid-level diesel generators to ensure electricity reliability during the winter,” says Marshall.
Canadian pension fund OMERS is not yet heavily invested in Canadian renewables, but claims to be looking at the opportunities. Gisele Everett, senior managing director and head of Americas, OMERS Infrastructure, says: “To shape our portfolio for the future, we have five global investment themes, one of which is energy transition, which includes renewables.
“We currently have four renewable platforms around the world – in the US, India and Australia – with a fifth to follow shortly, as our investment in Groendus in the Netherlands will close and mark our entry into European renewables. We see significant momentum globally for additional investment in renewable energy and are focused on the sector both by continuing to support our current platforms and seeking additional investment opportunities in new markets.”
Everett has high hopes for the renewables sector in Canada, as the country “strives to meet its net-zero goals. In particular, we see near-term investment opportunity in Alberta and Ontario, stemming from those provinces’ objectives of decarbonising the energy sector”.
If Canada is to meet its goal of generating 90 percent of its electricity from zero-emitting sources by 2030, the government could hold up Alberta as an example of how to get there. Large investors have grasped the opportunity, and, over time, other provinces will be poised to grow the investment opportunities even further.