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TC Energy eyes investments in wind energy in bid to decarbonize U.S. pipeline assets

The push into renewable power ‘could be a significant investment opportunity’

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CALGARY – Pipeline company TC Energy Corp. is considering wind power investments to electrify its pipelines in the United States, where the company’s assets have been subjected to environmental scrutiny for years.

Calgary-based TC Energy announced Monday it is seeking ideas from 100 power generation companies for potential contracts or investment opportunities in “wind energy projects that could generate up to 2,500,000 megawatt hours per year or 620 megawatts of zero-carbon energy” to power its pipeline assets in the U.S.

“Ultimately, our goal is to leverage our existing asset base to add more renewable power generation to our portfolio and the broader market, resulting in a net reduction of emissions across our North American footprint,” Corey Hessen, TC Energy senior vice-president and president of the company’s power and storage business, said in a press release.

TC Energy plans to create a shortlist from the information it receives, and then pursue proposals for wind power investments.

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Hessen said the company wants to use the plan “as a platform for future growth and diversification.”

TC Energy owns a network of oil and natural gas pipelines in Canada and the U.S. and has attracted controversy in recent years over its planned Keystone XL pipeline, which would have carried 830,000 barrels of heavy oil per day from Alberta to refineries in Louisiana and Texas. That project was cancelled earlier this year and analysts have been looking for TC Energy to redeploy its capital in other growth projects.

The push into renewable power “could be a significant investment opportunity,” BMO Capital Markets analyst Ben Pham wrote in a Monday research note.

Members of the Cowboy and Indian Alliance (CIA), a group of ranchers, farmers and indigenous leaders hold signs during a protest against the Keystone XL pipeline on the National Mall in Washington, D.C., U.S., on Tuesday, April 22, 2014.
TC Energy’s planned Keystone XL pipeline was cancelled earlier this year after years of controversy. Photo by Pete Marovich/Bloomberg files

Pham said TC Energy’s renewable plans could add up to US$1 billion in investments and would reduce the company’s energy costs as well as its carbon footprint, which amount to roughly two million tonnes of CO2 per year.

“This is consistent with (TC Energy’s) previous signal that it saw significant capital investment opportunity in electrifying its fleet, supporting its long-term 5-7 per cent growth while lowering its overall greenhouse gas emissions,” Pham wrote.

A growing number of companies are using power purchase agreements for renewable power to offset their emissions from the electricity they use, including an announcement from Shell Canada Ltd. last week that it intended to purchase wind power from BluEarth Renewables, said Vincent Morales, a clean energy analyst with the Pembina Institute.

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In 2019, TC Energy announced it would purchase solar power from a project in southern Alberta for a portion of its electricity needs.

“In most regions, wind is the most cost competitive power source for new projects,” Morales said, noting that TC Energy’s announcement Monday includes a call for projects in Texas, which generates 20 per cent of its electricity from wind power.

TC Energy did not respond to a request for comment to identify which U.S. pipelines the company wanted to electrify with wind power.

The company’s push into renewable power has previously been telegraphed in investor calls, including a plan to power its controversial Keystone XL pipeline project with renewable power and a commitment to making the heavy oil conduit the first net-zero pipeline in North America. Those plans were not enough to save the Keystone XL pipeline, which was cancelled by U.S. President Joe Biden on his first day in office in January to follow through on climate change promises from his presidential campaign.

TC Energy owns and operates the Keystone pipeline system, which brings Canadian heavy oil to U.S. Gulf Coast refineries, as well as a large network of natural gas pipelines in the U.S. Midwest, Northeast and South that were purchased as part of its US$13-billion deal for Columbia Gas Transmission in 2016.

In its power business, TC Energy currently owns and operates seven power plants in Canada, including the Bruce Power nuclear plant in Ontario and multiple natural gas cogeneration facilities in Alberta.

Financial Post

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