Enbridge's (NYSE: ENB) dividend has been powered by fossil fuels for decades. Over 69 years, the Canadian pipeline and utility operator has paid dividends. It has increased its payout for 29 years, mostly due to fossil fuel infrastructure cash flows. For at least several years, Enbridge's 7.5% dividend will depend on oil and gas. Renewable energy is another driver that could boost GDP in the next decades. Closer look at this emerging development engine.
Meaningful renewable energy platform building Enbridge has a large renewable energy platform. It operates 5.3 GW across North America and Europe. This provides clean energy to 5.7 million people. The company operates onshore wind and solar energy facilities in the U.S. and Canada and offshore wind farms in Europe.
Enbridge's renewable power platform is minor compared to its other activities. Enbridge will make half its money from liquids pipelines, 25% from gas transport, 22% from gas distribution, and 3% from renewable electricity this year.
The company developed its renewables platform organically and via acquisitions. It extensively funded several European offshore wind farm projects. Tri Global Energy, the third-largest U.S. onshore wind energy developer, and two European offshore wind farms were acquired recently.
Platform with high expansion potential Enbridge believes its North American onshore renewables and European offshore wind platforms can develop significantly. Several projects are under development in both regions, and many more are planned.
In late 2022, Enbridge acquired Tri Global, which had 7 GW of wind and solar projects in development. After completion, operating sponsors would buy 3.9 GW of projects from the corporation. Enbridge might run 3 GW of Tri Global's wholly owned projects in late development.
In addition, Enbridge purchased a 50% stake in the U.S. Fox Squirrel solar project last year. The 150-MW ground-mounted solar facility's first phase is operational. The project includes two further phases that might increase capacity to 577 MW by year's end. Fox Squirrel expands Enbridge's EDF Renewables collaboration. The firms are also building European offshore wind projects.
Offshore France, Enbridge is building Fecamp, Calvados, and Provence Grand Large. The corporation and collaborators developed Dunkirk, Rampion Extension, and Normandy. Four other unsecured development projects are underway.
Enbridge might build 6.2 GW of North American onshore capacity this decade and 5.9 GW of European offshore projects. The corporation may invest $1.5 billion Canadian ($1.1 billion) annually in renewable energy initiatives. These projects will boost its cash flow in the future, allowing it to raise its dividend.
Enbridge may make purchases as opportunities arise due of its financial flexibility. It could buy development platforms, operating project holdings, or other developers' initiatives. Given the massive money needed to construct renewable energy generation, Enbridge should have several investment options.
A promising long-term growth driver Enbridge constructed a massive renewable-energy platform. Although it's not a major revenue driver for the corporation, it may become one in the future. It should propel Enbridge's expansion in the coming decades and let it to raise its high-yielding dividend.
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