TransCanada Corp. , a major pipeline operator and power producer, has expanded its alternative energy business with a deal to buy nine solar power projects in Ontario for $470-million.
The big Calgary company said Tuesday it had had agreed to buy Ontario solar projects from Canadian Solar Inc. , with a combined capacity of 86 megawatts.
All nine projects have 20-year power purchase agreements with the Ontario Power Authority.
"The addition of these solar projects allows us to expand and add to our diverse power generating portfolio where a third of the power we own, or have interests in, comes from alternative or renewable energy sources," Russ Girling, TransCanada's president and chief executive officer, said before stock markets opened Tuesday.
"Upon close of this acquisition, this low-risk investment is expected to be immediately accretive to earnings and cash flow."
Under the agreement, each of the nine solar projects will be developed and built by Canadian Solar using their photovoltaic panels. TransCanada will buy each project after it begins commercial operation and subject to certain milestones being met.
The energy giant said it expects the projects will come into service between late 2012 and mid-2013 in Ontario, where the company has become the largest independent power producer in the province.
Ontario has been moving to grow its alternative energy business – solar , wind, biomass and other fuels – as it phases out coal-fired power generation.
Though best known for its massive pipeline network that ships Western Canadian gas to markets in Canada and the United States, TransCanada has also come to public attention for its $7-billion proposal to build the Keystone XL oil pipeline .
The controversial megaproject would deliver oil sands crude from northern Alberta and new U.S. supplies from North Dakota to refineries along the Texas Gulf coast. It has come under fire from critics and environmentalists and is still awaiting approval in early 2013.
TransCanada currently operates the largest wind farm in Canada, and the largest wind farm in New England. Its hydroelectric plants span three states in New Hampshire, Massachusetts and Vermont.
The company is also a partner in Canada's first private nuclear generator– the Bruce nuclear power plant on the shores of Lake Huron – which currently produces 4,700 MW of electricity in Ontario.
Canadian Solar is one of the world's largest solar companies, with operations in North America, Europe, Australia and Asia.