Cenovus Energy Inc. CVE entered an agreement to purchase renewable energy from a solar power project in Alberta to obtain carbon neutrality in its operations.

The company will purchase solar-powered electricity and related emission offsets from a partnership between Cold Lake First Nations (“CLFN”) and Elemental Energy Inc. CLFN has been a long-term supplier of services at Cenovus’ projects, whereas Elemental is a privately-held developer, investor and operator of renewable energy projects. Elemental has two operational solar power plants in Alberta.

As part of the agreement, Cenovus agreed to purchase the overall production of the new solar facility to offset Scope 2 emissions, which arise from purchased electricity used in its operations. Once completed, the facility will add 150 megawatts of renewable energy to the province’s electricity grid. The facility is expected to start producing electricity in 2023.

With the agreement, Cenovus is enhancing its emission-reduction strategy by using innovative methods to achieve carbon neutrality by 2050. The project is helping Cenovus to proceed with two of its environmental, social & governance (“ESG”) focus areas by addressing climate change and greenhouse gas emissions. The company cited that the deal would help build more reconciliation with indigenous communities.

Cenovus identified water stewardship, biodiversity, inclusion and diversity as its other significant ESG focus areas. At present, the company sells surplus electricity from cogeneration plants at its Foster Creek and Christina Lake oil sands to Alberta’s electric power systems for use by residents and businesses.

Company Profile & Price Performance

Headquartered in Calgary, AB, Cenovus is a leading integrated energy company.

Shares of the company have outperformed the industry in the past six months. Its stock has gained 39.3% compared with the industry’s 11.1% growth.

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Zacks Rank & Stocks to Consider

Cenovus currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Denbury Inc. DEN, Devon Energy Corporation DVN and Berry Corporation BRY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Denbury’s earnings for 2021 are expected to surge 100.7% year over year.

Devon’s earnings for 2021 are expected to increase 31.4% year over year.

Berry’s earnings for 2021 are expected to surge 1,323.3% year over year.

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