Meet Canada's new Big Green Giant...

It took a few months, but Alberta's largest electricity generator, TransAlta, was finally able to finalize its takeover of Canada's largest renewable energy generator, Canadian Hydro Developers (CHD).

This is big. As it stands, the development of renewable energy in Canada has been fairly scattered as a multitude of different companies, utilities and community groups are installing 'green' power, primarily from wind, hydro, solar and biomass. The largest of these companies is CHD, generating nearly 700 MW from 21 wind, solar and biomass projects in B.C., Ontario, Quebec & Alberta. Those in Ontario may be familiar with its largest and most controversial wind project, the Wolfe Island Wind Project.

But today, TransAlta purchased CHD for $1.6B to significantly add to its green portfolio. TransAlta is known for its large coal-fired generation plants that generate nearly 4000MW, although it also dabbles in gas and some renewables. But acquiring CHD will put a lot of money behind renewables in Canada and could lead to a massive influx of grandiose renewable power projects.

This acquisition has several benefits for TransAlta. First, it makes them look greener. Coal is not cool anymore and being known as a coal giant degrades its reputation daily. Being green, however, is cool and people may look more favourably towards it.

Secondly, TransAlta intends to cease expansion of coal-fired generation plants in the next few years. Since energy companies like to grow, it leaves a sizeable (and profitable) gap of potential development. The new renewable projects will fill much of that gap, but more importantly, they will launch TransAlta into a sector that has nowhere to go but up, made especially enticing by considerable government incentives.

Thirdly, it gives TransAlta the right to any 'green credits' that might come along with a large cap-and-trade system. That is, groups creating green power will be given credits -- as opposed to having to purchase credits for GHG emitting behaviour, like coal plants -- that they can sell to other firms, or in TransAlta's case, use to offset some of the damage done by its GHG emitting gas and coal plants.

With the arrival of such a giant in Canada's renewable energy sector, the development of renewable power is hit with a question: What is the best way to go about deploying renewable energy? Is it through large companies like TransAlta that will be able to take advantage of massive economies of scale and significant resources to establish very large generation projects with an increased likelihood of encountering public opposition? Or should governments be focused on deploying them locally, through community-based power projects?

The presence of TransAlta will certainly make things interesting. And with the Green Energy Act coming into place, TransAlta's green future looks even more promising. But if its future projects are anything like Wolfe Island, you can be sure we'll stand witness to a big, windy fight.