Future Energy

Canadian Renewables Stocks

                                    

It took a while before I noticed it, but last month, Matthew Brown posted a summary of Canadian renewable energy policies on his Inter Energy Solutions blog (see, Canada Renewable Energy Policy, February 12th).

Looking at both federal and provincial policies, Brown gives a good summary of a growing body of policy support for renewable energy here in Canada.  While much of the policy is federal, driven by the government's halting attempts to address climate change, Brown suggests:

" ... some of the biggest action is happening at the provincial level, and the action there is new — mostly since 2004 and still developing. There, several provinces have adopted renewable energy portfolio standards or renewable energy goals. Manitoba, for example, has committed to 1,000 MW of new wind generation. Quebec has committed to up to 4,000 MW of wind generation. Ontario also has what is essentially a feed-in tariff for renewable energy, a bit along the European model. Through a feed-in tariff, renewable energy generators are guaranteed a market for their power at a certain price and certain terms. Solar photovoltaics can sell their power at 42 cents per kWh, for example. That’s a significant incentive. Beyond this, several provinces have funding mechanisms to support renewable energy."

And its all having an impact.  There is a growing list of renewable companies in Canada, including some that are publicly listed.  I'm providing a list of the publicly listed companies (and not much more right now) below.

    Canadian Renewable Energy Stocks         

Company	Symbol	Focus
Canadian Hydro Developers	TSX: KHD	Hydro, Wind, Biomass
Canadian Solar Inc.	NASDAQ: CSIQ	Solar (Photovoltaic)
Carmanah Technologies Corp.	TSXV: CMH	Solar/ LED Lighting
Finavera Power Corp.	TSXV: FVR	Wind, Wave
Innergex Renewable Energy Inc.	TSX: INE	Wind, Hydro
Maxim Power Corp.	TSX: MXG	Landfill Gas, Waste heat, Flare gas recovery, Cogeneration (and a coal fired power plant)
Naikun Wind Development Inc.	TSXV: NKW	Wind
Plutonic Power Inc.	TSXV: PCC	Hydro
Run of River Inc.	TSXV: ROR	Hydro
Sea Breeze Power Corp.	TSXV: SBX	Wind
Shear Wind Inc.	TSXV: SWX	Wind
Western GeoPower Corp.	TSXV: WGP	Geothermal
Western Wind Energy	TSXV: WND	Wind

Several caveats are in order:

• Finavera is Irish based but listed on the Toronto Stock Exchange and has many or most of its projects in Canada;

• Maxim Power is not just about renewable, it also has a coal-fired power project and several natural gas fired plants.  However, it also has a number of interesting renewable projects including waste heat and land-fill gas.

• Some (or all, depending on your point of view) of these stocks are speculative and none are provided as recommendations.

While all but one of the companies are project developers, rather than technology developers, they range from the well establsihed such as Canadian Hydro Developers to those such as Naikun Wind Development that are striving to develop an initial project.

And these are by no means all of the Canadian renewables industry.  There is still a wide range of private companies and there are a number of income trusts/funds (see Income Trusts: Canadian Green Energy Income Trusts, February 17th).

I don't think I missed too many of the publicly listed companies, but I would appreciate any comments or suggestions for adding to the list.

Are Energy Companies Investing in the Future?

                                         

What Do Oil & Gas Companies Know About Renewable Energy Investment Anyways?

Peter Fusaro, writing yesterday in the Risk Center's Risk Alert newsletter (see Why Energy Companies Are Not Investing in the Future?, March 3rd), laments the lack of energy company investment in renewable energy, cleantech, etc.  In the face of a a future carbon constrained world with potential peaks in conventional oil & gas reserves, Mr. Fusaro points out that the energy industry is "awash in capital but seems content on stock repurchasing and dividend boosting".  He goes on to argue that:

"the major oil companies are now in a liquidation phase of their existence.  Their reserves-to-production ratio is declining and they are now begining to peak as they now produce and monetize their depleatable assets.  Investment in a new energy future is not being pursued by nmany energy companies yet.  I see the energy companies, therefore, as the buyers of new clean energy technology, not the innovators producing them."

His arguments brought to mind last week's announcement by BP, that it was considering divesting its renewables unit, and conversations I have had with a Canadian oil & gas producer about whether they should be investing in renewable energy.

Groups such as Innovest and the SAM (Sustainability Asset Management) Group that would rate oil companies on their sustainability or green image are unequivicable on this point (see past posts, including Which Oil & Gas Companies are the Most Sustainable, February 9th, or Fast Company Looks at Oil, February 4th).  These sustainability ratings give significant marks for those companies such as Shell or BP that have put money into wind, solar or other clean energy.

However, what do oil & gas companies (and even electrical utilities) really know about renewable energy?  What do companies used to investing hundreds of millions and even billions of dollars know about deploying small-scale, distributed energy technologies?

One of the business mantra's of the past two decades has been "stick to your kniitting" and a recognition that no company can be all things to all people.  The worst case for investors and society as a whole may be relying on the existing energy giants to lead the way in iinvesting in our energy future.

Going back to Mr. Fusaro's article, he outlines the growing wave in sustainable energy investment over the past six years, reaching $5.18 billion in 2007.  Much of this is apparently coming from institutional investors, entrepreneurs and others outside of the existing energy sector.  Given the disruptive transformation that needs to take place in our energy economy, perhaps this is as it should be.