912094

Solar Panels

installed since Algonquin's founding in 1988

1

Million Metric Tons

Algonquin has surpasses its goal to reduce greenhouse gas emissions by 1 million metric tons from 2017 levels

3

Gigawatts

of generating capacity

View Our Analysis

The Path to Drawdown: Electrical Utility

Electric utilities play an important role in the path to a world of net-zero emissions. They provide the connective tissue between key Drawdown solutions: renewable energy generation and energy storage. Through long-term power purchase agreements (PPAs), utilities enable renewable energy developers to secure buyers for their power and unlock project finance. Utility companies also often control electrical grids, putting them in the position to prioritize (or deprioritize) the extent to which the grid is outfitted  for the intermittency of solar and wind power generation. They also are key players in greenlighting the development of  large-scale energy storage.

There are dozens of investor-owned utilities traded on the New York stock exchange (such as Duke, NextEra, Dominion, Xcel, PG&E, etc.), and many of them are purchasing or developing renewable power capacities to provide clean electricity to customers across large regions. We use a stringent criteria to determine which utilities are significantly contributing to the low-carbon energy transition.

What We Want to See Improve

Completely Phase Out Fossil Fuels

We commend Algonuin for their commitment to achieve 75% renewable generation by 2023. And they are on track to hit this target! Once they do, we'd like them to go further. The other 25% of energy generation in 2023 (p. 37) consists of natural gas and diesel. Algonquin should phase out these generation sources and replace them with entirely clean or renewable sources.

Measure Scope 3 Emissions

Algonquin is meticulous in reporting their scope 1 and 2 emissions (p. 85) but they have yet to report their scope 3 emissions. Scope 3 emissions account for the vast majority of most companies' emissions, and Algonquin should disclose it so that investors can accurately assess the emissions from their value chain.

Nudge Suppliers to Reduce Emissions

Once scope 3 emissions are measured and reported, we would like to see Algonquin nudging their suppliers and partners in their value chain to also reduce their direct emissions. The first step toward doing this would be to draw up a supplier code of conduct that includes clear language around processes for selecting suppliers who adhere to emissions reductions goals.

Related Green Energy Stocks in the Climate Index

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Allocated Company Description

3.32%

Exelon Corp. (EXC)

Exelon is one of the largest US electric utility and operates nuclear, wind, solar, hydro plants. They’re a key player in decarbonizing the power sector

2.61%

Sempra Energy (SRE)

Sempra Energy develops energy infrastructure and provides electricity and gas. Green utilities are the bedrock for developing more renewable energy

1.53%

Companhia Energética de Minas Gerais (CIG)

CIG is one of the largest power utilities in Brazil that generates its electricity from renewable sources. They’re a model of how utilities should go green

1.48%

PG&E (PCG)

PG&E is a public utility that offers electricity and natural gas to customers and growing their clean energy capacity. Green utilities are key to Drawdown

1.30%

Avangrid, Inc. (AGR)

Avangrid generates most of its electricity through solar, onshore wind, geothermal, hydroelectric and biomass - an exemplar of green utilities

0.71%

Algonquin Power & Utilities Corp. (AQN)

Algonquin Power & Utilities operates renewable and clean energy assets throughout North America. These are key sources of energy in a decarbonized world

0.19%

Enel Chile S.A. (ENIC)

Enel generates electricity from hydroelectric, solar, wind, and geothermal. They’re helping expand clean energy capacity

0.10%

Montauk Renewables, Inc. (MNTK)

Montauk has facilities that generate renewable natural gas, a sustainable fuel. Electric utilities like Montauk are key to expanding clean energy capacity

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