Midstream

TC Energy may switch to green energy to run its entire pipeline network

TC Energy trust notes

TC Energy, the Canadian pipeline operator is considering a switch to renewable energy to run its entire pipeline network in North America; as carbon pricing is going to get bigger in coming years; reported Reuters.

Firstly, the Calgary-based company ships oil and natural gas through a 100,000 kilometers network; in fact, it operates one of the biggest pipeline networks in North America. According to Reuters, the company received a better-than-expected response to a request for information on wind and solar for its pipelines in April.

Secondly, the decision to power all of its networks with green energy, also came after a smaller scale project for TC Energy’s liquid pipelines; after the success of the pilot project, TC Energy said it would be possible to pivot quickly the use of green energy for its network.

Thirdly, TC Energy is not the only midstream operator considering the move; Enbridge is also considering ways to meet investor demands in regards to lowering its carbon footprint, specially from its midstream operations.

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TC Energy to heavily invest on its infrastructure

Moreover, according to Reuters, Canada will rise the costs of carbon emissions; due to the country’s pledge to cut emissions 40-45% from 2005 levels, by 2030. Currently, a ton of carbon emissions in Canada has a cost of $40 Canadian dollar; by 2030 it will cost $170 Canadian dollars. This would add a substantial cost to TC Energy if it fails to change its ways.

In addition, TC Energy is still in the process to calculate how much carbon emissions would be avoided if it powers its pipeline network with green energy. However, according to data from its sustainability report, its carbon expenses have been on the rise; from CAD$69 million in 2019; up from $62 million in 2018.

Furthermore, as said above, and as we reported previously; upon closure of KXL, the company wanted to power it with green energy; to do so, TC Energy asked renewable energy developers for information on 620 megawatts of wind and solar electricity. The response was for nearly 14 gigawatts; almost 20 more times than what it needed.

Finally, such response encouraged the company to go even further. According to Reuters, TC Energy would need around 5 to 7 GW to power its entire U.S. and Canadian pipeline network. Company officials declined to discuss the amount of capital needed to achieve such milestone, but declared that the company has invested, and will continue doing so, heavily on its infrastructure.

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