RBC Becomes First Canadian Bank to Sign Renewable Energy Purchase Agreement
The Royal Bank of Canada, the country’s largest chartered bank and one of its biggest boosters for new fossil infrastructure, is dipping its toe in the world of renewable energy finance by buying into two new solar farms producing a combined 39 megawatts of electricity in southeast Alberta.
“We’re proud to be the first Canadian bank to sign a long-term renewable energy power purchase agreement, demonstrating our commitment to clean, sustainable power,” said Senior Vice President Scott Foster, RBC’s global head of corporate real estate. “This agreement will help support our clients and communities in the areas where we live and work with the low-carbon transition, while accelerating clean economic growth.”
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Under the deal with Guelph, Ontario-based BluEarth Renewables, RBC and Bullfrog Power will each buy 31,500 megawatt-hours of electricity from the two solar farms, enough to power nearly 2,600 Canadian homes. The projects “will be two of Canada’s largest solar farms when completed next April, generating 80,000 megawatt-hours annually, and are expected to inject C$70 million into the province’s economy,” BNN Bloomberg writes.
“Bullfrog Power has always aimed to bring major new solar energy generation to the Canadian grid,” said President Sean Drygas. “We’re thrilled to make that a reality with the Burdett and Yellow Lake Solar Project, and we’re proud to show our community how power purchase agreements can help build a renewably-powered future.”
“BluEarth has long believed in the potential of the Alberta market, and we’re thrilled to begin construction of the Burdett and Yellow Lake Solar Project in August 2020,” said President and CEO Grant Arnold. “This is more proof the market works and solar in Alberta is competitive.”
The Pembina Institute says the project will also create 300 construction jobs in Alberta.
Bullfrog says the installations will be Canada’s eighth-largest solar project, and Alberta’s first utility-scale solar venture, when they’re complete. The company’s release points to corporate power purchase agreements as a financing strategy that “enabled well over 9 GW of wind and solar development in the United States last year, and now they’re bringing new renewable opportunities to Canadian businesses.”
The release includes a 100-second video explaining how virtual PPAs work.
“PPAs allow companies to shrink their carbon footprint while enabling a specific renewable project to get off the ground,” Bullfrog writes. “In these contracts, a buyer like Bullfrog or RBC guarantees the developer, BluEarth in this case, a fixed price for energy from a project that has yet to be built. This guarantee gives the developer the financial security they’ll need to get their project approved, secure its funding, and build it.”
“The fact that RBC, Canada’s largest bank, is joining forces with Bullfrog Power and BluEarth Renewables on this solar energy project in Alberta is a testament to renewable energy as a viable investment and energy source,” said Julia-Maria Becker, director of Pembina’s Business Renewables Centre Canada. “Partnerships like these, fostered through BRC-Canada, are invaluable as we work to diversify our economy to withstand future disruptions and to stave off the most destructive impacts of climate change.”
Bloomberg says the deal will contribute to RBC’s plan to reduce greenhouse gas emissions from its operations 70%, and source 100% renewable and non-emitting electricity, by 2025.