Canada has one of the highest per-capita energy consumption rates in the world due to its climate and widely dispersed population. According to a 2023 report from the Public Policy Forum, Canada will need to increase supply by two to three times its current volume in order to meet demand and also reduce reliance on fossil fuels[3].
As Canada looks to increase its supply, it must also face the additional challenge of phasing out fossil fuels, which still comprise a significant portion of Canada’s energy mix. Government and private corporations have begun to look at alternative energy sources such as solar and biogas. These clean energy sources have the potential to directly address some of the major challenges faced by the current energy grid. For example, they can keep supply in balance with demand by storing energy via batteries during off-peak hours and redistributing it to the grid when demand is at its peak.
As part of Canada’s goal to reach Net Zero by 2050, the Federal government is aiming to create low- or zero-emission electricity grids across Canada by 2035. Reaching these ambitious targets will require a collective effort from all the provinces as well as the private sector. Private alternative investment funds based in clean energy, like Skyline Clean Energy Fund (SCEF), have a critical role to play in helping Canada meet its net-zero goal and address the growing energy demand.
Skyline’s Strategic Response
Skyline Clean Energy Fund (SCEF) strategically focuses on acquiring and optimizing infrastructure assets, such as solar and biogas, backed by long-term government contracts. SCEF’s solar assets contribute to renewable energy generation by harnessing the power of the sun to create electricity, and its biogas plants convert organic waste into electricity or Renewable Natural Gas (RNG). In addition, SCEF’s portfolio includes the opportunity to continue to produce energy well past the expiration of its current offtake contracts and to increase the production of the assets due to advancements in technology and a developing private market.
For more information on how solar assets generate electricity, read this article.
For information on how biogas assets generate electricity, read this article.
Portfolio Overview
Skyline Clean Energy Fund’s portfolio of 83 clean energy assets, offers a diversified approach to renewable energy. In total, the portfolio represents $412.74 million in asset value, 68.74% allocated to solar and 29.86% to biogas[5]. The projected revenue streams from SCEF’s top ten assets is distributed between 38.63% stemming from biogas and 61.37% from solar[6].
From an investment perspective, SCEF reinvests its cash flows to optimize clean energy production and drive further investment growth for its unitholders. Redeploying all capital into new accretive opportunities creates a compounding effect, helping grow the Fund’s unit value. This approach not only maximizes returns for investors but also ensures SCEF’s continued expansion and contribution to the renewable energy sector without diluting current unitholders.
SCEF also benefits from diversified revenue streams. Within clean energy infrastructure, SCEF could potentially generate revenue through:
- The monetization of environmental attributes. For example, at SCEF’s Lethbridge biogas facility, the Fund receives carbon credits for processing organic waste that may have otherwise ended up in a landfill, expecting around $1.4M in revenue in 2024 from Carbon Offsets via Alberta TIER and approximately $1M annually from the Federal Clean Fuels Regulation.
- Tipping fees to dispose of waste in landfills that are backed by contracts to divert organic/green bin waste to biogas facilities to be turned into electricity or Renewable Natural Gas.
- Digestate sales. This by-product of biogas facilities can be sold to farmers as an organic fertilizer and is preferable to traditional fertilizers.
Economic and Environmental Impact
SCEF is a privately managed investment fund, focused on investing in renewable and clean energy production. SCEF sells its energy through long-term government or private contracts, providing the Fund with stable and predictable revenue streams and enabling it to withstand various economic environments.
SCEF’s contribution to the clean energy sector is substantial and impactful: its assets have demonstrated year-over-year growth in expected annual energy generation and currently supply 117,415 MWh annually[7]. By capitalizing on opportunities in the renewable sector and aligning its portfolio with the anticipated continuation of high energy demand, SCEF plays a pivotal role in advancing Canada’s transition to a cleaner future.
Skyline Clean Energy Fund: A Resilient Investment with a Bright Future
SCEF’s operations complement the national, and indeed international, objective to expand renewable electricity capacity, which is forecasted to rise by over 60% globally by 2026[8] compared to 2020 levels. As demand increases and the clean energy sector continues to grow, so too will Skyline Clean Energy Fund.
By investing in clean energy solutions like Skyline Clean Energy Fund, investors can enjoy the benefits of the Fund’s growth while having a direct positive impact on Canada’s transition to clean energy.
Visit www.SkylineWealthManagement.com/Advisory to learn more about Skyline’s private alternative investment funds.
[1] Government of Canada, Statistics Canada. (2022, August 22). This report presents the results of ten population projection scenarios by age group and sex up to 2042 for the provinces and territories and up to 2068 for Canada. using the July 1, 2021 population estimate as the starting point, these projections are based on assumptions that take into account the most recent trends relating to the components of population growth, specifically fertility, mortality, immigration, emigration and Interprovincial Migration. https://www150.statcan.gc.ca/n1/pub/91-520-x/91-520-x2022001-eng.htm
[2] Government of Canada, C. E. R. (2023b, November 24). Canada energy regulator / Régie de l’énergie du Canada. CER. https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/2021/key-findings.html#:~:text=Canadians%20use%20more%20electricity%2C%20from,electric%20vehicles%20and%20hydrogen%20production
[3] Public Policy Forum Forum Des Politiques Publiques . (2023, July). Pg. 2, Project of the Century: A Blueprint for Growing Canada’s Clean Electricity Supply – and Fast. ppforum.ca. https://ppforum.ca/wp-content/uploads/2023/07/Canada%E2%80%99sCleanElectricitySupply-PPF-July2023-EN-1.pdf
[4] As at December 31, 2023.
[5] As at March 31, 2024.
[6] As at March 31, 2024. Based on expected revenue numbers that are forward looking.
[7] As at December 31, 2023
[8] United Nations Climate Change. (n.d.). Renewables Growth Must Double to Achieve Paris Goals – IEA. Unfccc.int. https://unfccc.int/news/renewables-growth-must-double-to-achieve-paris-goals-iea#:~:text=The%20report%20forecasts%20that%20by,fossil%20fuels%20and%20nuclear%20combined
About Skyline Wealth Management
Skyline Wealth Management Inc. (“Skyline Wealth Management”) connects portfolio managers and institutional investors to several private alternative investments operating in the Canadian real estate and clean energy sectors and totaling $8.2 billion in assets under management. These private alternative investments are:
- Skyline Apartment REIT (Fundserv code: SKY2006)
- Skyline Industrial REIT (Fundserv code: SKY2012)
- Skyline Retail REIT (Fundserv code: SKY2013)
- Skyline Clean Energy Fund (Fundserv code: SKY2018)
Each investment comprises a portfolio of geographically diverse assets, offering clients strong historical performance and stable distribution, low MERs, and potential diversification solutions with lower relative volatility to the public markets.
Visit www.SkylineWealthManagement.ca for more information.