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ATCO acquires $713M wind, solar portfolio from Suncor

Engineering and energy firm ATCO has signed a 15-year renewable energy purchase agreement with Microsoft after it acquired a $713 million wind and solar portfolio from Suncor Energy. (Courtesy ATCO)

ATCO has significantly bolstered its renewables focus with a $713-million acquisition of Suncor Energy Inc.'s wind and solar energy portfolio in Alberta and Ontario through its investment in Canadian Utilities Limited.

ATCO (ACO-X-T) also signed a 15-year renewable energy purchase agreement (REPA) with Microsoft Corporation. Microsoft will purchase 150 MW of renewable energy generated by ATCO´s newly acquired 202 MW Forty Mile Wind Phase 1 Project in Alberta.

"Today represents two big steps forward on our commitment to become a leader in decarbonization," said Bob Myles, ATCO’s executive vice president of corporate development in a statement. 

"Firstly, with this transaction ATCO adds 232 MW of operating wind assets and a 1.5-gigawatt renewable development portfolio in Canada. Secondly, with the 15-year REPA with Microsoft, we have enabled another customer to reduce the carbon intensity of their operations."

Calgary-based ATCO has investments in structures and logistics, utilities, energy infrastructure and retail energy. It currently has 6,400 employees and assets of $23 billion. Canadian Utilities (CU-T) has 4,800 employees and $21 billion in assets.

ATCO’s acquisition

Canadian Utilities initially entered into the agreement with Suncor in October.

ATCO has successfully begun operating the Forty Mile Wind facility in southeastern Alberta as well as the 30 MW Adelaide wind facility in Ontario, in which it has a majority interest. The off-take from Adelaide is contracted under a long-term power purchase agreement (PPA). 

A PPA, like a REPA, is a long-term contract between an energy buyer, or buyers, and a renewable energy project developer. The buyer acquires energy from the project for a predetermined rate once the project comes online.

"Achieving Canada's net-zero ambitions without sacrificing affordability and reliability requires that we pursue a range of low-carbon energy solutions, including renewable electricity, hydrogen and natural gas," said Nancy Southern, ATCO’s chair and CEO in a statement at the time.

Originally, the acquisition was priced at $730 million and included 252 MW of capacity. But existing investors in the Chin Chute and Magrath Wind projects – from which ATCO would have controlled 20 MW – opted to acquire the additional interest in these facilities.

ATCO has a goal of owning, developing or managing more than 1,000 MW of renewable energy by 2030, as well as a commitment to achieving net-zero greenhouse gas emissions by 2050.

ATCO and Microsoft

In March, ATCO signed a 15-year REPA for Microsoft (MSFT-Q) to purchase all renewable energy generated by ATCO's 37 MW Deerfoot Solar Project in Calgary, currently under construction and costing approximately $70 million.

"Today we are announcing a new power purchase agreement with ATCO for the Forty Mile Wind Phase 1 Project in Alberta. This agreement, along with one we announced in March 2022, supports our commitment to decarbonization and furthers our goal of being powered by 100 per cent renewable energy by 2025,” Microsoft Canada's president Chris Barry said in a statement.

“We look forward to working with ATCO to help us get one step closer to our carbon negative commitment and bring more renewable energy to the grid.”

Microsoft also signed a 15-year PPA with Potentia Renewables Inc. and Greengate Power Corporation to acquire clean energy from the 198-MW Paintearth Wind Project.

The Suncor acquisition is ATCO’s second this week, after its Structures division acquired Triple M Modular Housing, a manufacturer of factory-built, modular housing based in Lethbridge, Alta.

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