Ontario's Solar Market Boom
This may come as a surprise, but the Canadian province of Ontario ranked second in solar photovoltaic (PV) installed capacity in North America in 2010, trailing only California. With 220 MW installed in 2010 alone, the province is heading for a “bright” renewable energy future. But this hasn’t occurred by chance, and is the result of two very significant factors: a high feed-in tariff and generous investment incentives.
Catharine Gerhard, business development officer with Canada’s Technology Triangle Inc., says, “The rapid growth in solar is a direct result of Ontario’s Green Energy Act, which offered the first feed-in tariff program in North America, modeled after the German system. Solar panel installation owners are offered monetary incentives of 40-80 cents per kilowatt-hour.”
She adds, “Ontario also has some of the most generous research and development incentives for solar in the world, beat out only by Brazil. This is especially true if you partner with a University or research institution, where every dollar invested will return five dollars back to the investor through both tax breaks and market return on investment.”
SEE OTHER TOP STORIES ON THE WDM CONTENT NETWORK
Gerhard claims that by 2012, Ontario will have an installed capacity of 600 MW. The province already boasts the largest solar PV farm in the world, an 80 MW 1.3-million panel installation forged in collaboration between First Solar and Enbridge Inc.
“Ontario is very attractive to solar investment right now, because of corporate tax rates, a wide labor and talent pool and the Green Energy initiatives,” Gerhard adds. “Yet, we are a very early market that’s only been around for about two years.”
Ontario’s solar growth is unprecedented, and will soon have the region competing internationally with solar giants like Germany. Canada’s Technology Triangle Inc. represents 10 key urban communities throughout Ontario and is the Waterloo region’s investment attraction organization. Ontario attracted over $1 billion in private investment in solar energy in 2010
USS pension fund buys 50% stake in Bruc Energy
The Universities Superannuation Scheme (USS) private pension fund has taken a 50% stake in Bruc Energy, a Spain and Portugal renewables-focussed investment vehicle created by OPTrust and Spanish businessman, Juan Béjar.
In the transaction arranged by USS Investment Management, the wholly-owned subsidiary and principal investment manager and advisor to the Scheme, USS has invested €225M (c.£200m) in return for the stake in a major pipeline of 4,000MW of PV farms. Bruc Energy has an ambitious growth plan that goes beyond this to invest in other green energies, such as wind power.
USS, which announced two weeks ago its aim to be net zero by 2050, already has a strong relationship with both OPTrust and Juan Bejar through Globalvia, a specialist infrastructure platform focussed on managing rail and highways assets around the world.
Spain’s sun-drenched climate and national target to reach 100% renewable-based generation by 2050 make it an attractive place to invest in solar energy. In addition, the decades long lifespan of solar PV panels make them well-suited to USS in helping pay members’ pensions long into the future.
USS Investment Management CEO, Simon Pilcher, said: “We are delighted to be committing further finance to renewables and particularly to a major Spanish solar platform like this. We have already invested or committed around £1 billion to renewable energy and demand for this will only increase as more and more countries transition to lower carbon. We know that our members care very much about climate change and ESG and we are convinced that USS playing its part in supporting the transition to a low carbon economy makes good financial sense, too. This announcement closely follows on from our stated ambition to become Net Zero by 2050 so this transaction and others like it will be a key plank of our strategy going forward.”
Gavin Merchant, Co-Head of Direct Equity, said: “We have worked alongside OPTrust and Juan Béjar for many years and are delighted to be making this investment. The long-term nature of solar and the steady returns make renewables attractive to a pension scheme needing to pay pensions for years to come.”
OPTrust’s Morgan McCormick, Managing Director, Private Markets Group UK said: “We are excited to have USS join Bruc Energy building on our strong existing relationship. Their investment will help Bruc become one of the leading renewable energy platforms in Spain. At OPTrust, we believe that investing in renewable energy helps transitions the world to a more sustainable economy. In doing so, we can continue to deliver on our mission of paying pensions today and preserving pensions for tomorrow.”
Béjar said the partnership is a key step to establishing Bruc as one of the more dynamic players in the renewables industry in Spain, because it ensures access to the funds to develop our current portfolio. "All three shareholders of Bruc Energy share a long-term vision, but also the ambition and the social responsibility to counter the effects of climate change in the short-term," he said.
Following the transaction, which remains subject to conditions, including regulatory approval, Bruc Energy will be owned 50% by USS and BROP, a vehicle owned by OPTrust and Béjar. The transaction was advised by Royal Bank of Canada (RBC), Greenhill and Nomura. Juan Béjar will be the president of Bruc Energy and Luis Venero the CEO.