Here’s how to invest in Canadian renewable energy stocks on the TSX as the sector positions itself for accelerated growth.
Renewable energy has become an increasingly important part of how clean energy is produced.
From moving water and natural gas to solar, geothermal and ocean energy, renewable energy is defined by Natural Resources Canada as “energy obtained from natural resources that can be naturally replenished or renewed within a human lifespan.”
The organization states that renewable energy is responsible for roughly 18.9 percent of the country’s energy supply, with moving water — or hydroelectricity — accounting for 59.3 percent of its renewable electricity generation. In fact, the country is the second largest producer of hydroelectricity worldwide.
In early 2021, a Canada Energy Regulator report showed that renewable energy is projected to account for 71.2 percent of the nation’s energy mix by 2023, up from 61.5 percent in 2010. While hydroelectricity remains an important source, wind and solar are expected to drive the most growth in renewable energy production in Canada in the coming years.
Perhaps surprisingly, Saskatchewan and Alberta are expected to lead this transition to renewables. “I know there are people out there, when they think of Alberta and Saskatchewan, they may think of oil and gas production,” said Canada Energy Regulator Chief Economist Darren Christie. “The reality is the Prairies are a place with a lot of wind and sun. So it’s kind of ripe for growth.”
Canada’s TSX is home to a variety of publicly traded renewable energy stocks. In response to growing investor demand, the S&P/TSX Renewable Energy and Clean Technology Index (INDEXTSI:TXCT) was created with a focus on companies in sector; it is screened by Jantzi Sustainalytics, one of the world’s leading providers of environmental, social and governance research and analysis.
The list below of renewable energy stocks on the TSX was created using the index’s most heavily weighted constituents as of July 22, 2021.
1. Northland Power (TSX:NPI)
Market cap: C$8.8 billion; current share price: C$43.46
First on this list of TSX renewable energy stocks is one of Canada’s first independent power producers. Northland Power has vast clean and green global power infrastructure assets in Canada, as well as in Asia, Europe and Latin America. These assets include clean-burning natural gas and renewable resources such as wind, solar and efficient natural gas.
Northland Power’s 13 Canadian solar sites are located across Ontario, hosting around 600,000 solar panels and producing close to 200 GWh annually. The company has more than 200 turbines that operate across four onshore wind farms in Ontario and Saskatchewan and generate 3,787 GWh annually.
2. Brookfield Renewable Partners (TSX:BEP.UN)
Market cap: C$13.17 billion; current share price: C$47.91
This TSX renewable energy stock is one of the world’s largest publicly traded renewable power companies. Brookfield Renewable Partners sells the bulk of its power production under long-term, fixed-rate power purchase agreements.
Brookfield Renewable’s expansive asset portfolio includes hydroelectric, wind and solar generation facilities, as well as energy storage assets. This translates into roughly 21,000 MW of capacity and nearly 6,000 generating facilities across North America, South America, Europe and Asia.
3. Innergex Renewable Energy (TSX:INE)
Market cap: C$3.82 billion; current share price: C$21.25
Third on our list of TSX renewable energy stocks is Innergex Renewable Energy, which develops and operates run-of-river hydroelectric facilities, wind energy operations, solar farms and energy storage facilities in North America, France and Chile.
Some of the company’s most notable Canadian renewable energy assets include: the Viger-Denonville community wind farm in Quebec, which consists of 12 wind turbines with a total gross installed capacity of 24.6 MW; the ECOLOGO-certified Upper Lillooet River hydroelectric project in BC; and the Umbata Falls run-of-river hydroelectric plant located on the White River tributary of Lake Superior in Ontario.
4. Boralex (TSX:BLX)
Market cap: C$3.93 billion; current share price: C$38.25
Quebec-based Boralex produces renewable wind, solar, hydroelectric and thermal energy in Canada, France and the US. The company is France’s largest independent producer of onshore wind power. In Canada, Boralex has: 21 wind projects across Quebec, Alberta, Ontario and BC; nine hydroelectric projects across Quebec, Ontario and BC; one solar project in Ontario; and one thermal project in Quebec.
Boralex recently announced a new five year plan for 2021 to 2025 that will see the company invest US$6 billion to roughly double its capacity by adding 4,400 MW.
5. TransAlta Renewables (TSX:RNW)
Market cap: C$5.83 billion; current share price: C$21.83
Last on our list of TSX renewable energy stocks is one of Canada’s largest producers of wind energy and Alberta’s top producer of hydroelectric power, TransAlta Renewables. In addition to its hydro, wind, solar and energy storage assets, the company is actively working to decommission its coal plants in Alberta and to retrofit some of them to run on natural gas. TransAlta also owns and operates electrical power generation assets in the US and Australia.
The company’s Canadian renewable sources of energy include hydro sites in Alberta, Ontario and BC (where it recently expanded hydro capacity at the 19 MW Bone Creek facility), as well as wind energy with sites in Alberta, Ontario, Quebec and New Brunswick.
This is an updated version of an article originally published by the Investing News Network in 2017.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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