How Traditional Energy Companies Are Building a Viable Future for Renewables
Last year was a record-breaker for global investment in renewable energy, and the trend is expected to continue
Four percent growth doesn’t sound like much. But that’s all it took to make 2015 a record-breaking year for global investment in renewable energy, which last year topped $329 billion. And though it may surprise most environmentalists, the oil and gas industry played a significant role in that year-over-year increase—and they’re on track to do it again in 2016. The truth is, however, they’ve been at it for a while.
Let’s rewind for a moment to the 1970s. Exxon is then studying the first lithium-ion battery, an innovation that will drive the solar storage industry, and Chevron is investing in two massive geothermal projects in the Philippines. Today, Chevron is one of the largest producers of geothermal power globally and the company provides clean energy to millions of people in the developing world. The industry continues to invest in renewables despite an abundance of cheap oil. In the fall of 2015, Total announced plans to invest $500 million per year into developing clean energy.
Rick George, former CEO of Suncor
Of course, investing in renewables helps the industry gain social license, but it’s not all about good PR. When you peel back the politics, the relationship between oil and gas companies and renewable energy development is a natural one. The industry has capital to invest and a wealth of technological expertise—not to mention experience with the deployment of huge energy projects, and engagement with the communities where these projects are.
Enbridge and TransCanada, the country’s largest pipeline companies, both invest heavily in renewable energy. Enbridge may be known in the public mind as a pipeline company through-and-through, but the company owns 16 wind farms across North America, making it the second-largest wind power producer in Canada. Along the shores of the Great Lakes and in remote villages in Quebec, Enbridge’s wind turbines are prevalent. Meanwhile, TransCanada’s energy portfolio is far more diverse, comprised of hydro, solar, nuclear and wind power. TransCanada is a joint-owner of the Bruce Nuclear Generating Station in Ontario, and while nuclear is not a renewable energy source, it is a very low carbon emitter. Today, the Bruce nuclear plant provides 30 percent of Ontario’s power and TransCanada recently extended its agreement with the province’s Independent Electricity System Operator to keep the facility running until 2064.
Furthermore, in 2011, TransCanada agreed to purchase nine solar facilities in Ontario from Canadian Solar Solutions for approximately $470 million. Terry Cunha, spokesperson for TransCanada, says that it’s just good business to have such a diverse energy mix. “You need to have a combination of fossil fuels [and] renewables such as hydro, solar [and] wind as part of a total energy mix in order to be successful,” he says.
In spite of these ongoing renewables projects, Canadian oil and gas and midstream companies continue to face the brunt of North American environmental criticism. While filming the Oscar-nominated film The Revenant near Calgary in 2014, Leonardo DiCaprio was mocked by Albertans when he wrongfully mistook a gust of warm air as “scary” evidence of climate change due, at least in part, to Alberta’s oil sands. In actuality, the change in temperature was, as every Albertan knows, a Chinook—the warm wind that blows seasonally down from the Rocky Mountains. While DiCaprio’s remarks were harmless enough and elicited eye-rolls across the province, the comments fueled his growing anti-Canadian oil campaign as exemplified most recently in his speech at the 2016 World Economic Forum in Switzerland. Prime Minister Justin Trudeau responded to DiCaprio’s remarks after the forum, critiquing him for using “inflamed rhetoric.”
But DiCaprio is no one-man show on the environment. He’s one of many celebrities who criticize Alberta’s oil sands yet remain silent on the efforts of the industry to reduce carbon emissions and promote renewables. Currently, Alberta has the third-largest wind market in Canada, with a total wind energy capacity of 1,500 MW, enough to power 625,000 homes per year. Many of these wind farms are owned by oil companies: Nexen jointly owns Soderglen wind farm in Fort Macleod along with TransAlta; Suncor and Acciona are part-owners of the Chin Chute and Magrath wind projects; and Enbridge owns the largest wind farm in Western Canada in Vulcan County. Canada’s first commercial wind farm, which opened in 1993 in Cowley Ridge, Alberta, is still operating today. As the second province in Canada to begin phasing out coal power, Alberta’s wind market is expected to grow by thousands of megawatts over the next 10 years in order to fill some of the void left by coal.
Alberta’s renewable energy influence goes beyond the province’s borders, as well. In 2004, Talisman Energy and Scottish and Southern Energy (SSE) announced plans to build the first deepwater offshore wind turbine east of Scotland to test the feasibility of such a project. The Beatrice wind project was a success and electricity generated from it continues to power the nearby Beatrice oil platform. But, more significantly, the project verified the feasibility of building wind farms in deep water, sparking the development of similar projects, including Statoil’s first floating, deepwater turbine, built 10 kilometers off the southwest coast of Norway. The ground-breaking project now feeds Norway’s power grid and Statoil is in the midst of building five more floating turbines off the coast of Scotland.
Imre Szeman, a Canadian research chair and professor at the University of Alberta, studies fossil fuels and the modern movement toward a renewable energy economy. He says he’s glad to see oil and pipeline companies turn their attention more to renewables. “Overall, it’s a positive thing,” he says. “They are energy companies, and just one of the energy sources that they deal with a lot right now is oil and gas.”
This sentiment is precisely what was behind retired Suncor CEO Rick George’s decision to change the company’s name from Suncor to Suncor Energy. While it took some convincing of investors, George says that the change was vital. “I wanted to say that Suncor had made a difference, and that our focus was on producing energy generally, not oil sands-based petroleum exclusively,” he writes in his memoir Sun Rise. Today, Suncor is involved in six wind farm projects in Canada which produce almost 287 MW, enough to power 100,000 homes. Surely this is a step in the right direction for both the industry and the environment. As Suncor spokesperson Nicole Fisher says, “the renewable energy business plays a critical role in providing lower carbon energy to the grid, while building opportunities for Suncor in a new energy economy.” And she isn’t blowing hot air. In early 2016, Suncor took preliminary steps to develop three new solar projects in Alberta.
While some in the oil industry may see renewables as a threat to the Albertan way of life, Szeman says that investing in renewable energy need not be seen as a cultural threat. “If we think of ourselves as an energy province, then we should be taking the lead in other kinds of energy,” he says. On the other hand, it may always be tough for anti-oil campaigners like DiCaprio to accept the significant role the industry is playing in renewables. But, the fact of the matter remains that traditional energy and pipeline companies are still the most important players in the renewables field in Canada, and have been for a while now.
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