Dividend Ramp Up In Canadian Utilities
As IÂ’ve pointed out on numerous occasions, oil sands development is at its core not a drilling operation but a mining and chemical refining process. That requires an enormous amount of electricity to carry through.
On the other hand, the Canadian government has also been very aggressive setting targets for use of renewable energy and reducing carbon dioxide emissions from power generation.
A year ago the country set tough new standards for fostering biofuels development. That matches renewable energy standards set in nine Canadian provinces that require power companies to generate a set percentage of their electricity from wind, solar and hydro.
As the major utilities are primarily provincial power authorities, that amounts to guaranteed contracts for renewable energy developers and generators. And not only are contracts backed by the full support of taxpayers, but they typically guarantee premium rates and recovery of any change in costs. Some - particularly in solar and wind - actually guarantee payment even if conditions inhibit a full generation.
After it completes its acquisition of Capital Power LP, Atlantic Power Corp. AT will hold several valuable projects. Management plans to follow up with more, particularly in hydro-rich British Columbia.
Meanwhile, Innergex Renewable Energy INGXF.PK, which I first profiled in this February 2010 InvestingDaily.com article, already has substantial holdings, and is in the process of building more capacity. Innergex has aggressive plans with new wind and water projects in development that will nearly double current capacity in the next few years. And it has prospective projects that would potentially add another 2,800 megawatts, or nearly seven times current output of 401 megawatts.
Getting all that up and running is just a matter of executing, and Innergex has been very effective getting such deals done in the past. Even a partial success will result in a big ramping up of dividends in coming years, even as the current payout remains secure despite what happens in the economy.
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Tariff Threats Boost Support for Canadian Energy Projects
TORONTO - In recent months, the Canadian energy sector has experienced a shift in public and political attitudes toward infrastructure projects, particularly those related to oil and gas production. This shift has been largely influenced by the threat of tariffs from the United States, as well as growing concerns about energy independence and trade relations.
Scott Burrows, the CEO of Pembina Pipeline Corp., noted in a conference call that the potential for U.S. tariffs on Canadian energy imports has spurred a renewed sense of urgency and receptiveness toward energy infrastructure projects in Canada. With U.S. President Donald Trump’s proposed tariffs…
