Applying project management and engineering skills honed in the oil and gas industry, Canada's largest petroleum producers also are entering the renewable energy market. While producers continue in their core business to aggressively explore for fossil fuels, they are expanding their portfolios of energy sources to include wind, solar, "run-of-river" or small hydro, landfill gas, biomass, hydrogen fuel cells and geothermal, to name just a few.
Several factors are driving the companies in their race to establish their market share in the renewable energy marketplace, including:
- Naturally occurring, renewable energy sources provide oil companies with a hedge against unpredictable, even volatile, oil and gas commodity prices.
- A small yet growing percentage of investors are demanding that the petroleum industry strive toward sustainable energy sources.
- Under the Kyoto Protocol, Canada is committed to reducing its greenhouse gases (GHG) emissions to 6 percent below 1990 levels by 2008-12.
When BP introduced the new brand name "beyond petroleum" in July 2000, many saw it as a clever marketing ploy -- but BP Solar, the world's largest manufacturer and provider of solar photovoltaic energy, now operates in 160 countries worldwide, and is enjoying annual growth rates that exceed 30 percent.
Calgary-based Suncor Energy Inc. entered the renewable and alternative energy business in January 2000, with an announcement to spend $100 million during the next five years. Two years later, Suncor began generating "green" electricity at the SunBridge Wind Power Project at Gull Lake, Saskatchewan.
The wind farm represents a $22 C million, 50/50 partnership between Suncor and Enbridge Inc. The project involved a 10-year, $12.4 million agreement between the federal government and SaskPower, designed to supply renewable energy to Saskatchewan.
In 2004, Suncor commissioned the $48 C million McGrath Wind Power Project in southern Alberta. At Magrath, 20 turbines produce 30 megawatts of power, and generate projected carbon dioxide offsets of 82,000 tons per year. Suncor's partners are Enbridge and EHN Wind Power Canada.
Suncor's total green generating capacity now stands at 41 megawatts.
In April, Suncor announced that it planned to build its second wind farm in southern Alberta. The 30-megawatt Chin Chute Wind Power Project will include approximately 20 wind turbines built across 1,440 acres of leased private land.
By producing eco-friendly sources of energy that would have otherwise been generated by burning fossil fuels, companies like Suncor can generate GHG emissions credits. Such credits could be used to offset, for example, the amount of GHGs created by Suncor's energy-intensive mining, refining and upgrading of oil sands in Fort McMurray, Alberta.