More than 145,000 solar panels snake in rows across 210 acres in rural Alberta, stark black against the fields, representing a new trend in Canada as large companies scramble to meet the pollution-reduction targets they have promised their investors and customers.
In this case, the two fields of panels near Burdett – a small hamlet about 300 kilometres southeast of Calgary – were bankrolled by Royal Bank of Canada through a corporate renewable power purchase agreement (PPA). The solar farms are expected to come online this week, providing roughly 80,000 megawatt hours of renewable energy to the province’s grid each year.
Under a corporate renewable PPA, a company or institution agrees to purchase electricity directly from a green energy generator. Power generated on the site feeds back into the grid, offsetting the amount of electricity consumed by that company.
For the Burdett project, RBC partnered with two Calgary-based companies – BluEarth Renewables Inc., which built the solar farm, and green energy supplier Bullfrog Power – as it moves toward its goal of sourcing all of its electricity from renewable and non-emitting sources by 2025.
Corporate PPAs for renewable electricity have been growing at a rapid clip in the United States, said Rebecca Nadel, director of the Business Renewables Centre (BRC) Canada, a non-profit working to accelerate large-scale renewable energy use across the country.
Ms. Nadel cited two major market developments that have fuelled that growth: A surge in companies setting ambitious emission-reduction goals, and the precipitous drop in the cost of solar-power technology, which has fallen by more than 80 per cent over the past decade.
Despite numerous economic challenges wrought by the COVID-19 pandemic, the U.S. saw 98 new deals in 2020 – a 17-per-cent increase from 2019, according to the Renewable Energy Buyers Alliance (REBA), which tracks agreements in that country. Of those, nearly half were made by corporations new to the market.
Corporate renewable PPAs are used in the Americas, Europe and across the Asia-Pacific. In the U.S., they have been embraced by power-hog tech sector giants like Google, Facebook and Amazon, and by major players in various other industries, including General Motors, Estee Lauder, Nestle and Nike.
A recent report by Deloitte concluded that corporate PPAs now rival government policy as a driver of growth in the renewable energy sector.
The BRC will release its first corporate PPA tracking tool for Canada later this month. And while Ms. Nadel acknowledges Canada doesn’t yet have the same depth and scale of deals as the U.S., she said it’s a fast follower.
“We expect 2021 to be a real banner year for corporate renewables,” she told The Globe and Mail.
The growth will, for the most part, be confined to Alberta, which has a unique deregulated power market that allows a direct connection between buyer and seller – an attractive prospect in a province that was economically ravaged last year by the pandemic and oil price collapse.
RBC estimates construction of the Burdett solar farm created about 300 jobs. A separate corporate PPA inked recently by BluEarth and Shell Canada for a new wind farm northeast of Drumheller is projected to create another 175 jobs.
BluEarth president and chief executive officer Grant Arnold said between employment and economic diversification, corporate PPAs are “very positive” for the province, where wind and sunshine are plentiful.
“Most people recognize that Alberta has oil and gas resources – and we’re lucky to have them – but we have wind and solar resources, and we’re also lucky to have those,” he said.
Mr. Arnold, Ms. Nadel and others involved in the corporate PPA space – including Bullfrog Power president Sean Drygas – expect to see many more deals signed in Alberta in the next few years.
“There are so many companies these days with net-zero targets,” but many make commitments without necessarily having a concrete plan to meet their green goals, Mr. Drygas said. “So they’re looking for, ‘Well, how do I actually do it?’”
He’s also keeping his eye on how the transition away from coal incentivizes renewables in the province.
“On an ongoing basis, wind and solar is very competitive,” he said. “I think an interesting dynamic can operate over the next few years to see how much of that coal is replaced by gas, and how much is replaced by renewables. A lot of that will depend on whether corporations step up and say, ‘We want renewable power.’”
Over at RBC, senior director of sustainability Andrew Craig said the bank will likely need multiple PPAs to achieve its lofty green goals, and will combine them with various other strategies, such as installing solar panels on its branches in the Caribbean.
“One power purchase agreement isn’t going to get us to those targets,” he said.
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