CALGARY, Oct. 30, 2019 /PRNewswire/ - TransAlta
Corporation ("TransAlta" or the "Company") (TSX: TA) (NYSE:
TAC) announced today that it has entered into an agreement
with Kineticor Holdings Limited Partnership #2 to indirectly
acquire two 230 MW Siemens F class gas turbines and related
equipment for $84 million. The
transaction also results in the Company assuming long-term non-unit
contingent power purchase agreements starting in late 2023 with
Shell Energy North America (Canada) ("Shell"). TransAlta will redeploy
these assets to its Sundance site
as part of its strategy to repower Sundance Unit 5 to a highly
efficient combined cycle unit by integrating these gas turbines
into the existing steam turbine at Sundance Unit
5.
This transaction has significant benefits, including:
- Advances the Company's strategy of becoming a low cost, low
emissions power generation company;
- Significantly reduces TransAlta's post-2020 merchant risk by
securing between 210 MW and 420 MW of long-term power contracts
with Shell, a strong investment grade company that is committed to
providing more and cleaner energy for Alberta;
- Reduces the time to design and construct the repowered combined
cycle unit by three to six months;
- Results in a lower capital outlay, by approximately
$230 million, for the repowered
combined cycle strategy;
- Provides the Company with more operational flexibility by
integrating two gas turbines into one steam turbine (rather than
two steam turbines); and
- Maintains the option to repower the Keephills 1 unit to a combined cycle unit or
to convert the unit to gas via a boiler conversion at a later date,
depending in each case on market fundamentals.
The Sundance 5 repowered
combined cycle unit will have a capacity of approximately 730 MW
and is expected to cost approximately $760
million, well below a greenfield combined cycle project.
TransAlta expects to achieve commercial operation in 2023.
"The acquisition advances our repowering strategy in
Alberta and increases our
contractedness which will help de-risk our business as we move into
a fully merchant Alberta market
starting in 2021," said Dawn
Farrell, President and Chief Executive Officer of TransAlta.
"We are very pleased for the opportunity to have Shell as a major
customer and look forward to working with them on this opportunity
to provide low cost, clean and reliable power for Albertans."
About TransAlta Corporation:
TransAlta owns,
operates and develops a diverse fleet of electrical power
generation assets in Canada,
the United States and Australia with a focus on long-term
shareholder value. TransAlta provides municipalities, medium and
large industries, businesses and utility customers with clean,
affordable, energy efficient and reliable power. Today, TransAlta
is one of Canada's largest
producers of wind power and Alberta's largest producer of hydro-electric
power. For over 100 years, TransAlta has been a responsible
operator and a proud community-member where its employees work and
live. TransAlta aligns its corporate goals with the UN Sustainable
Development Goals and has been recognized by CDP (formerly
Climate Disclosure Project) as an industry leader on Climate Change
Management. TransAlta is proud to have achieved the Silver
level PAR (Progressive Aboriginal
Relations) designation by the Canadian Council for
Aboriginal Business.
For more information about TransAlta, visit its web site at
transalta.com.
Forward Looking Information
This news release contains certain information that is
forward-looking and is subject to important risks and uncertainties
(such statements are usually accompanied by words such as "may",
"will", "should", "estimate", "intend" or other similar words).
Specifically, this news release contains forward-looking
information with respect to, among other things: the
transaction with Kineticor Holdings Limited Partnership #2,
including the cost and timing to close; the intention to redeploy
the gas turbines to its Sundance
site as part of its strategy to repower Sundance Unit 5 to a highly
efficient combined cycle unit; integrating the gas turbines into
the existing steam turbine; reducing the time to
permit, design and construct the repowered combined cycle unit by
three to six months; the lower capital outlay of approximately
$230 million for the repowered
combined cycle strategy, compared to what was discussed during the
Company's Investor Day; provides the Company with more operational
flexibility; the plans pertaining to repowering the Keephills 1 unit to a combined cycle unit or
the potential conversion of the unit to gas via a boiler conversion
at a later date; the Sundance 5
repowered combined cycle having a capacity of approximately 730 MW
with an expected cost of approximately $760 million; and that
commercial operation will be achieved in 2023. All
forward-looking information reflect the Company's beliefs and
assumptions based on information available at the time the
statements were made and as such are not guarantees of future
performance. The forward-looking statements are subject to a number
of risks and uncertainties that may cause actual performance,
events or results to differ materially from those contemplated by
the forward-looking statements, which include: fluctuations in
demand, market prices and the availability of fuel supplies to
support the conversion of Sundance Unit 5 into highly efficient
combined cycle natural gas units; changes in the current or
anticipated legislative, regulatory and political environments; the
construction and permitting of the repowering of Sundance Unit
5;environmental requirements and changes in, or liabilities under,
these requirements; and other risks and uncertainties contained in
the Company's Management Proxy Circular dated March 26,
2019 and its Annual Information Form and Management's
Discussion and Analysis for the year ended December 31, 2018,
filed under the Company's profile with the Canadian securities
regulators on www.sedar.com and the U.S. Securities and
Exchange Commission on www.sec.gov. Readers are
cautioned not to place undue reliance on this forward-looking
information, which is given as of the date it is expressed in this
press release. TransAlta undertakes no obligation to update or
revise any forward-looking information except as required by law.
For additional information on the assumptions made, and the risks
and uncertainties which could cause actual results to differ from
those in the forward-looking information, refer to the Company's
Annual Report and Management's Discussion and Analysis filed under
the Company's profile on SEDAR at www.sedar.com and with the
U.S. Securities and Exchange Commission at www.sec.gov.
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SOURCE TransAlta Corporation