Canada: M&A Activity In Renewable Power Sector Signals Growing Optimism About Viability Of Renewables

Last Updated: June 19 2014
Article by Lauren Heuser

Most Read Contributor in Canada, December 2017

At the Indo-Canada Chamber of Commerce Awards Gala this past weekend, the High Commissioner of India to Canada, Nirmal Vermal spoke enthusiastically about India's interest in promoting renewable power development, and also indicated that India would draw from the experiences of countries such as Canada to inform its renewable policydecisions. Mr. Vermal's comments are significant for two reasons: first, they highlight the extent to which renewables are no longer just the pet projects of developed economies; and second, they reflect a tacit recognition that the developed economies' initial policy endeavours in this area, while undoubtedly successful in promoting renewables development, were not without their flaws.

Indeed, the recently-released Renewables 2014 Global Status Report (GSR Report), put out by the Renewable Energy Policy Network for the 21st Century, situates India within the context of a broader trend of lesser developed economies—particularly countries throughout Latin America, the Middle East and Africa—starting to focus on the primary development of renewables within their jurisdictions. As the GSR Report notes, the number of countries with renewable energy support policies in place has been steadily increasing in the past decade, rising to 138 countries as of early 2014. Importantly, though, the GSR Report also observed a simultaneous trend of many of these countries undertaking a significant retooling of their policies as they look to retrench from, and in some cases, retroactively revoke, the regulations, subsidies and tax incentives that have caused consumer energy prices to soar and have invited significant political blowback.

This reshaping of renewable energy policy is already having, and will continue to have, a significant impact on the market dynamics of renewables development and use. Promisingly, the decline of public sector investment in renewable projects does not spell the end of renewables development. This is not least because of what the Bloomberg New Energy Finance report, Global Trends in Renewable Energy Investment 2014 (Bloomberg Report), refers to as a "phenomenon of unsubsidised market uptake" by companies and investors that are adopting an increasingly "warm attitude to renewables". This "market uptake" is manifesting itself in numerous ways, including in the form of new investment in the sector—through public market equity offerings, venture capital and private equity investment, and asset financings—as well as the recycling of finance in the sector through M&A activity in the secondary renewables space. With respect to the latter, the Bloomberg Report found that, in 2013 alone, $54 billion was spent on acquisition activity in the form of corporate mergers and takeovers, asset purchases, buy-outs and re-financings.

As reported by PwC in its 2014 deal outlook study (PwC Report), there is a full roster of acquisition-focused companies and funds that are eager to expand into the renewables market being vacated by primary developers—developers who were initially attracted to the sector by generous subsidies or tax incentives, but who are now keen to liquidate their assets as those benefits disappear. The most significant drivers of this M&A activity are "corporate buyers" (a term which includes, but is not limited to, energy and utility companies), who accounted for 75% of renewables deal activity in 2013, but various forms of institutional investment funds, infrastructure funds, banks, venture capitalists and private equity firms are also significant players in this field.

At first blush, this increase in M&A activity seems surprising: governments' policy vacillation and retreat from subsidization would, one would think, undermine investor confidence and deter acquisitions. But this train of thought merely reflects certain embedded assumptions about renewables: mainly, that they are not, on their own, viable business propositions. The fact that companies and institutional investors are taking a bet on renewables is promising precisely because it reflects an implicit market confidence that renewable assets can generate solid yields, even in the known or predicted absence of government supports.

This market signal is noteworthy not least because it represents such a marked change from years past. A number of factors can be identified as having contributed to this shift: for one, renewable power technologies are becoming increasingly cost-competitive; as noted in the Bloomberg Report, the worldwide average cost of electricity has declined by 53% for PV systems and 15% for onshore wind turbines, while the cost per MWh of coal- and gas-fired generation has increased in many countries. There have also been significant reductions in the costs associated with installing, maintaining and operating renewable projects, as well as improvements in grid management practices and infrastructure. Energy storage technologies are also starting to reach a level of commercial maturity that will make them widely-deployable, thereby allowing renewables to be treated as stable suppliers to electricity grids. Additionally, a Deloitte study found that many major companies are using their investment in renewables as a means to "offset their tax liabilities on robust profits, and to fulfill their corporate commitments to developing clean energy". Finally, the recently-announced carbon emissions reduction regulations in the United States, and similar regulations in other countries, are seen as likely to increase demand for renewables as older coal-fired plants are retired.

In short, M&A activity in the secondary renewables space is an indicator of the growing optimism about the continued role for, and viability of, renewables within energy markets. Importantly, this shift in confidence not only stands to benefit investors, but also the countries keen to build or sustain momentum around renewables development that have recognized that governments cannot afford to singularly shoulder the burden of achieving this end. Of course, for newcomers to this game, such as India, it seems clear that sometimes it pays not to be the policy leader.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions