Varcoe: New Alberta wind farm deal and gas cleantech fund take off – About Your Online Magazine


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Old energy, find the new energy.

Two new announcements illustrate how Canada’s existing energy system is intersecting with the new energy complex, blurring the line between them.

On Thursday, supermajor Shell struck a long-term deal to buy power from a new $ 200 million wind farm to be built northeast of Drumheller by BluEarth Renewables of Calgary.

Separately, a group of natural gas producers, including Tourmaline Oil, ARC Resources and Birchcliff Energy, have joined forces with other energy companies to establish a new $ 35 million equity fund that will invest in start-up clean technology businesses.

Both movements underscore an important point: as the world needs more energy, more sources will be explored, from traditional oil and natural gas reserves, to growing wind and solar resources, to emerging areas like biofuels and hydrogen.

All of them will play a role in supplying low-carbon energy to Canadians and the world for years to come.

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“We see ourselves as suppliers of energy. I believe that many oil and gas companies believe their primary business is to supply energy, ”said BluEarth CEO Grant Arnold, who previously worked at Suncor Energy, overseeing its Canadian wind energy portfolio.

“We have many conversations with large groups that are in oil and gas and traditional energy. There is a real convergence of minds about how this could work. “

Grant Arnold, CEO of BluEarth Renewables. Thursday, September 13, 2018.
Grant Arnold, CEO of BluEarth Renewables. Thursday, September 13, 2018. Marnie Burkhart photo

The lines between old and new energy participants are increasingly converging, as current participants invest and adapt as the energy transition picks up speed.

“There will be more blurring,” said energy economist Peter Tertzakian, deputy director of the ARC Energy Research Institute.

“It is a diversification and almost a hybridization of energy systems.”

Under Thursday’s agreement, Shell Energy North America – the marketing and trade arm of Royal Dutch Shell – will buy electricity and associated emission offsets for 100 megawatts of BluEarth’s new Hand Hills Wind Project under a long-term contract .

Construction, which will create 175 jobs at its peak, will begin later this year. The wind farm is expected to start operating in late 2022.

For Shell, the deal will assist the company in its broader commitment to achieving zero net emissions by 2050. It also occurs when Royal Dutch Shell expects its total oil production to gradually decline by one to two percent a year.

“Projects like Hand Hills are essential for the energy transition,” said Carolyn Comer, senior vice president at Shell Energy America, in a statement.

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For BluEarth, the Hand Hills project is the fourth venture that was unveiled last year, disbursing around $ 500 million in wind and solar investments in the province.

“It bodes well for Alberta to show that Alberta’s renewable energy and traditional businesses can do well together,” said Arnold.

The deal is also part of a growing trend for corporate customers to sign partnership agreements to buy renewable energy from generators. The Alberta Department of Energy says more than $ 2 billion in renewable energy projects have been announced since July 2019.

These corporate deals have gained popularity in the United States over the past decade and are now gaining ground in the Alberta electricity market, said Sara Hastings-Simon, a researcher at the University of Calgary School of Public Policy.

For buyers, signing an energy purchase agreement brings environmental benefits; it can also act as a hedge, slowing energy prices for companies that have electricity demands.

Sellers can use these long-term contracts to raise financing for their renewable energy projects.

“I hope that we will see energy companies, but also others, doing this kind of business in Alberta in the coming years,” she said.

The demand for renewable energy in the province continues to grow.

Alberta’s wind capacity doubled between 2010 and 2017, and will almost double again in 2023, according to a recent study by Canada’s Energy Regulator. Solar generation will also increase rapidly.

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There are other signs that established energy providers are adapting to a low-carbon future, from oil producers who adopt zero net emissions targets to industry investments in technology to reduce GHG emissions.

Last week, a group of Canadian natural gas producers and energy companies announced that they are creating a clean energy fund.

NGIF Capital Corp., created by the Canadian Gas Association, will launch a new $ 35 million capital fund to invest in clean technology startups that seek to reduce emissions in the production, transmission, distribution and storage of natural gas.

Known as NGIF Cleantech Venture, the fund will also consider investing in companies that are working on the production of hydrogen, renewable natural gas and other emerging fuels.

Partners in the investment fund include ARC Resources, ATCO Gas, Birchcliff Energy, FortisBC Energy, TC Energy, Tidewater Midstream and Infrastructure and Tourmaline Oil.

Birchcliff CEO Jeff Tonken said that the partners will not only provide an investment of $ 5 million each, but will give startups access to experts within their companies and their assets, helping to accelerate their growth.

“We have oil and gas companies along with midstream (companies) together with end users investing in cleaner technologies, which will reduce everyone’s costs and create a better environment,” said Tonken.

“These are real investments with real opportunities to have commercial clean technology companies.”

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Of course, an energy transition will not be easy for the world’s fourth largest oil producer.

There are legitimate concerns about job losses that must be addressed. A report by TD Economics this week warned that the move to a low-carbon economy could displace up to 450,000 Canadian workers employed (directly or indirectly) in the oil and gas sector in three decades.

Governments cannot ignore this critical concern.

It is also worth emphasizing another critical point: Alberta is well positioned for the future, with a number of development opportunities for more oil, natural gas, wind and solar energy. The province has existing infrastructure, a qualified workforce and an in-depth knowledge of the sector.

“There are a number of industry players who are starting to see this as … a great opportunity,” said Tertzakian.

“We have all the right ingredients and when you leave the denial phase and enter the transition phase, things start to click. I think these are the signs of the initial phases of the click – and I think it’s gaining momentum. “

Chris Varcoe is a columnist for the Calgary Herald.

cvarcoe@postmedia.com

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