Canadian power companies poised to profit from Biden's clean energy plans

Canada's power companies are looking south for profits as the Biden administration's clean energy ambitions signal strong growth in the renewables sector.

Even after warning that financial losses resulting from the mid-February cold snap in Texas could lead to the foreclosure of two of its power plants, Innergex Renewable Energy Inc. President and CEO Michel Letellier sounded a bullish renewables note on a conference call to review a quarter he said "we would rather forget." The Quebec-based company has projects underway to help it reach a goal of 600 MW of solar power capacity outside of Texas and increased wind development with prospects from the U.S. East Coast to Hawaii.

Algonquin Power & Utilities Corp. also anticipates large-scale growth in the U.S., so much so that it could swamp suppliers and regulators as companies rush to fill the demand.

"We are obviously very excited now of all of the tailwinds we're seeing from this Biden administration," Arun Banskota, president and CEO of Ontario-based Algonquin, said on a May 7 conference call. "With the scaling, the challenges are going to be across the board in terms of supply chain, in terms of permitting, speed in terms of the interconnection access, how fast that can move. So it's really going to be felt throughout the different parts of the value chain, but again, we have been very good at managing that."

In his first 100 days in office U.S. President Joe Biden has committed to transitioning the nation to net-zero emissions by 2050 and decarbonizing its electricity sector by 2035. Biden's infrastructure plan proposed $100 billion to "reenergize" the country's electricity grid and sought 10-year extensions on production and investment tax credits for clean energy projects. As those initiatives are expected to spur a transition to green power in the utility sector, companies such as Brookfield Renewable Partners LP are also focused on corporate demand for nonemitting power. The affiliate of Canadian conglomerate Brookfield Asset Management Inc. has sought out and signed a number of corporate contracts to help underpin its project pipeline of about 27 GW.

"In the last quarter, we signed 29 agreements for approximately 2,300 GWh of renewable generation with corporate off-takers across all major industries, including many of the largest counterparties by market capitalization in the world," Brookfield Renewable CEO Connor Teskey said on the company's first-quarter conference call. The agreements included an agreement to supply almost 100 MW of solar capacity to power data centers in the U.S. Northeast and an agreement to supply power to a large U.S. manufacturer.

Carbon capture

At Alberta-headquartered Capital Power Corp., President and CEO Brian Vaasjo said he sees expansion not only in providing low-emitting power but also in associated emissions-reduction technologies such as carbon capture, utilization and storage, or CCUS. Capital Power operates renewable generators in several states including Illinois and North Carolina and owns natural gas-fired facilities in the U.S. The company is developing technology at a coal-fired plant near Edmonton, Alberta, that would see emissions buried or converted to carbon nanotubes that could be applied to facilities such as its 865-MW Decatur gas-fired facility in Alabama.

"What we see, particularly with large facilities like the ones we have like Decatur, is technologies are evolving and will evolve in time where there's a high possibility or probability that one of these technologies can be associated with our facilities and reduce carbon from that perspective," Vaasjo said April 30. "When we look at new opportunities, certainly, we'll be thinking about the potential for carbon capture and storage and carbon utilization."

Generating cleaner electricity is only part of the equation for reaching decarbonization goals in the U.S., Fortis Inc. CEO David Hutchens said May 5. The Newfoundland and Labrador-based utility operator owns Michigan's ITC Holdings Corp., an independent electricity transmission company. Amid the electrification of the manufacturing and transportation sectors, a major overhaul of the transmission network will be needed to handle increased loads. That will require incentives for companies such as ITC to invest in infrastructure.

"Everybody is in alignment on the need for additional transmission infrastructure for us ... even to have a prayer of coming close to meeting the clean energy transition targets that we are putting out in the United States," Hutchens said. "We are trying to figure out how much of this is out there, but it will take some time."