By Arman Kazemi
November 27, 2014
A major purchase by one of Canada’s biggest green energy players – Brookfield Asset Management – shows that portfolio diversity is key to long-term sustainability in the renewable market.
The firm is set to make a $1 billion, 488-megawatt purchase consisting of mixed renewables from Energisa S.A., one of Brazil’s largest private-sector energy distributors.
While hydroelectricity accounts for about 5,700 MW, or 85 per cent, of Brookfield’s current installed capacity, the company has an interest in expanding its energy offerings to other renewable sources.
In June 2014, Brookfield acquired 326 MW of operational wind capacity in Ireland and Northern Ireland for another $1 billion, its first renewable asset in Europe. And with its most recent purchase, the company looks to broaden its portfolio even further.
In addition to 163 MW of installed hydropower, the deal also comes with another 150 MW of installed wind and, more significantly, 175 MW of biomass, a first for the Canadian firm.
Brazil is by far the world’s largest sugarcane producer and one of the top producers of ethanol, a sugarcane-based biofuel. The residue from all that sugarcane also fuels a thriving biomass energy source, as Brazilian generators use the castoff to produce steam and create electricity.
As Brookfield CEO Richard Legault told the Globe and Mail earlier this week, the company may use what it learns from this acquisition to potentially inform biomass purchases elsewhere. But he acknowledged that Brazil is one of the few significant global sugarcane producers and there exist “few similar fuel sources in other countries.”
Although the article notes that hydro will continue to be the company’s key portfolio feature going forward, there’s also an interest in adding solar to its energy profile as well, which Legault confirms is the “fastest growing renewable technology in the world.”
With this and other recent acquisitions, Brookfield has shown that large firms have an appetite for investing in less-traditional renewable sources while diversifying their offerings to reflect an expanding sector. If that’s the case, perhaps the prospects for a Canadian geothermal industry may not be so far off after all.
