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 component in the way clean energy is produced.
From moving water and natural gas to solar, geothermal and ocean energy, renewable energy is defined by Natural Resources Canada (NRA) as “energy obtained from natural resources that can be naturally replenished or renewed within a human lifespan.”
In Canada, the NRA states that renewable energy provides 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, Canada is the second largest producer of hydroelectricity worldwide.
Despite this, according to the Canadian Centre for Policy Alternatives (CCPA), climate policy in Canada is less ambitious than it has been in the past. The CCPA identified core roadblocks to renewable energy policy developments, including Canada’s reliance on fossil fuels such as oil, and the absence of supply-side energy policies.
Since 2005, Canada has reduced its greenhouse gas emissions by 2 percent. However, the CCPA says that Canada will likely fall short of reaching its 2030 targets.
With that in mind, here the Investing News Network (INN) looks at publicly traded renewable energy stocks on the Toronto Stock Exchange (TSX) for investors interested in learning more about the renewable energy sector. The list below is according to the TSX’s most recently updated list of 37 stocks in the cleantech sector.
The companies below fall under the subsectors of renewable energy equipment manufacturing and tech, energy efficiency and renewable energy production and distribution, and have market caps between C$50 million and C$500 million. Companies are listed in order of market cap size from largest to smallest. All data is current as of market close on November 12, 2019.
1. Westport Fuel Systems (TSX:WPRT)
Market cap: C$471.92 million; current share price: C$3.53
Westport Fuel Systems supplies renewable energy systems for the transportation industry. Through its four core divisions — light original equipment manufacturing, heavy duty original equipment manufacturing, aftermarket systems and Cummins Westport — Westport develops energy efficient fuel components systems.
For example, it builds natural gas injectors and fuel tank systems. In North America, there are currently 225,000 natural gas vehicles in service. Putting this in perspective, around the world there are a total of 22.5 million natural gas vehicles in operation, indicating that natural gas output is showing few signs of diminishing growth. Additionally, natural gas prices tend to be more stable than diesel. According to the NRA, Canada can maintain its annual natural gas production output for the next 300 years.
2. Atlantic Power (TSX:ATP)
Market cap: C$347.67 million; current share price: C$3.18
Atlantic Power operates 26 power generation assets in 11 US states and two Canadian provinces. The projects sell electricity to utilities and other commercial customers that are mostly under long-term power purchase agreements.
The company’s portfolio of assets include hydro, natural gas, biomass and coal. Although it operates 262 megawatts (MW) of power, its New Jersey Chambers Cogeneration coal project is the company’s only coal project in operation.
3. Polaris Infrastructure (TSX:PIF)
Market cap: C$189.1 million; current share price: C$12.04
Based in Toronto, Ontario, Polaris Infrastructure is principally engaged in geothermal and hydroelectric projects in Latin America. With 77 MW produced in its geothermal project in Nicaragua, Polaris is among the top renewable energy producers in the country. Through the company’s subsidiary, Polaris Energy Nicaragua, Polaris operates and owns the San Jacinto-Tizate geothermal project. The company also operates the Casita project in Nicaragua.
On the other hand, Polaris operates hydroelectric power plants in Peru. It currently has one project, the Canchayllo Hydroelectric Power Plant, which has 5 MW of power. Two projects, the El Carmen and 8 de Agosto, are under construction and are slated to provide a combined 17.4 MW of hydroelectric power in the future.
4. 5N Plus (TSX:VNP)
Market cap: C$166.8 million; current share price: C$2
5N Plus produces sustainable metal and chemical products. In addition, it manufactures critical precursors and key enablers in industries such as clean energy, electronics, pharmaceutical, medical imaging, paint pigments, security and surveillance. Precursors are the chemicals used to manufacture pharmaceutical drugs, for example.
More specifically, 5N’s portfolio of sustainable products includes pure metals such as zinc that are used for semiconductors and chemicals such as cobalt nitrate that are used in batteries. It also operates recycling plants to aid in the extraction of these materials.The plants are located in Canada, Germany, Laos and Malaysia.
5. Etrion (TSX:ETX)
Market cap: C$73.50 million; current share price: C$0.22
With projects across Japan and Chile, Etrion has developed over 750 MW of solar power since 2012. It has launched solar sites in Mito, Misawa, Shizukuishi and Komatsu in Japan.
Its Chilean operations are located in Salvador, where it runs a 70 MW project.
The largest shareholders of Etrion are the Lundin family, who have an estimated 36 percent stake in the company. The Lundin Group has its headquarters in Vancouver, British Columbia.
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This is an update to an article originally published in 2017.
Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.