The importance of a "green" electrical grid for large investors: the case of Canada and investments by Volkswagen Group and Honda
Modern large investors are increasingly focused on ensuring their investments align with environmental standards, particularly in industries where energy consumption is a key factor. A green electrical grid has become a strategic aspect of attracting large-scale investments, which not only stimulate economic growth but also help countries achieve ambitious climate goals.
Why is green energy important for investors?
Investors, especially multinational corporations, are increasingly guided by Environmental, Social, and Governance (ESG) policies due to growing pressure from consumers, regulators, and partners who expect responsible environmental practices.
A green electrical grid powered by renewable energy sources such as solar, wind, and hydro offers several advantages to investors:
- Reducing carbon footprint: Using green energy allows companies to lower CO₂ emissions and improve their reputation.
- Stable energy prices: Renewable energy is less susceptible to fluctuations in fossil fuel prices, enabling better cost planning.
- Brand support: Leveraging eco-friendly energy meets consumer expectations and helps build a positive company image.
Example: Volkswagen and Canada
One notable example of the importance of a green electrical grid is Volkswagen’s investment in Canada. In 2024, the German automotive giant announced significant investments in electric vehicle battery production in Ontario. One of Volkswagen’s key requirements was access to clean electricity for factory operations.
One of Volkswagen’s key requirements
was access to clean electricity for factory operations.
Canada, which actively develops green energy, was able to provide the necessary conditions. The province is home to numerous wind and solar power plants as well as hydroelectric facilities that account for a substantial share of electricity generation. Additionally, the Canadian government actively supports environmental initiatives through subsidies and tax benefits, making the country attractive to investors.
Volkswagen not only secured access to green energy but also signed agreements with local suppliers committed to sustainable development principles. This sent a strong signal to other investors considering Canada as a promising market for eco-oriented projects. For instance, Honda has also announced plans to invest in Ontario.
The Ukrainian Context
Rebuilding and modernizing Ukraine’s industrial sector is a priority for economic growth. Achieving this requires substantial foreign investment, particularly in constructing new factories and facilities. However, modern industrial giants set clear requirements for energy infrastructure, where access to green energy plays a critical role.
Why is green energy important for industrial investors?
- Cost reduction: Using renewable energy sources (RES) lowers electricity costs, which is vital for energy-intensive industries.
- Competitiveness: Companies using green energy gain a competitive edge in the global market, where environmental standards are increasingly significant.
- Responsible production: RES minimizes environmental impact, aligning with principles of sustainable development and corporate social responsibility.
- Stability and independence: Ensuring production with green energy reduces dependence on fluctuating prices for traditional energy resources and guarantees stable operations.
How to attract industrial investments through green energy?
- Guaranteed access to grids with high RES content: Investors must be confident in reliable access to green energy for their operations.
- Development of green industrial parks: Establishing specialized zones with guaranteed green energy supply will serve as a strong draw for investors.
- Simplifying grid connection procedures: Bureaucratic obstacles can deter investors, so it’s essential to ensure transparent and efficient connection mechanisms.
Dima Nechyporenko
Strategy & Business Development Director
