A Competitive Capital Structure and Growth Plan

Welcome to our Investor page

What makes TransAlta a solid investment?

What should investors expect from the company?

With over 100 years of experience in the power generation industry, TransAlta’s proven expertise has created a company with a diversified asset base — both in fuel type and geography. With our refocused strategy and financial discipline, we expect to grow cash flows from existing assets as well as develop new renewable generation for today, and tomorrow.

Diversified asset base

TransAlta operates over 65 facilities generating approximately 8,700 MW in three countries. Our assets include:

Long-life hydro facilities, some of which have been generating for over 100 years.

Coal units in Alberta and Washington state, providing reliable generation that is required to support the large industrial demand. We plan to convert these plants to gas generation in the future, extending the life and providing cleaner, low-cost energy to consumers.

Wind turbines, which provide clean energy to the grid with minimal impact to the environment.

Solar in Massachusetts, which has provided us with the expertise to operate and develop future solar generation. This knowledge has been helpful as we developed the Goonumbla solar farm, an 80 MW facility in Australia that we expect will be in service by mid-2018.

Gas generation in Alberta, Ontario and Western Australia; including the recently commissioned South Hedland power station which is providing power to the state and industrial consumers in Australia.

Growth potential

Our experience in the industry provides the necessary expertise to efficiently develop new assets, including renewable sources to meet Alberta’s Renewable Electricity Program (REP) target. In addition, we plan to convert our existing coal units to gas, which are expected to be a competitive source of generation to bid into the future capacity market here in Alberta.

In November of 2016, the Alberta Government announced its intention to add 5,000 MW of renewable energy capacity to the grid by 2030 and put Alberta on a path to achieve its target of having 30 per cent of power generation coming from renewable sources. These renewable energy growth projects will be done through a competitive bidding process, which TransAlta is currently participating in. We have two projects (Garden Plains and Cowley Ridge Wind Repower) for a combined total of 150 MW entered into the current round. Selection of successful proponents will be made in December and we are confident that our projects are competitive contenders in the process.

TransAlta’s proposed Brazeau hydro pumped storage project is a potential major hydro project in Alberta that could provide 600 to 900 MW of renewable energy to the grid. The fast-ramping nature of Brazeau would support grid reliability as new intermittent renewable power sources are added to the system. The project works like a rechargeable battery; storing water for renewable generation when demand is low and generating power when there is demand for it. We are currently conducting environmental studies but will require a long-term contract with the Government of Alberta before we go ahead with any large capital allocation plans for the project.

Outside of Alberta, TransAlta is currently anticipating growth in Saskatchewan with our Antelope Coulee Wind project, a 200 MW proposed project that has an in-service date of December 2019 if successfully chosen by the province. We also have an 80 MW solar project in Australia which we anticipate to be in service by mid-2018. This project is permitted and we are currently securing off-take agreements for generation.

 

Ownership in TransAlta Renewables Inc.

We currently own ~64% of TransAlta Renewables Inc. (TSX:RNW), a publicly traded sponsored vehicle, which holds highly contracted assets and pays approximately $150 million of annual dividends to TransAlta Corp. In addition, TransAlta Renewables has significant capacity to grow through both development and third-party acquisitions.

Financial strength and free cash flow growth

The financial strength of the company has improved over the past year through our financing initiatives (~$360 million raised in 2016 through non-recourse debt) and repayment of debt with our free cash flow with further improvement expected by the potential monetization of the off-coal payment (expect to receive ~$350 million). With our near-term debt maturities taken care of, we are confident in our ability to grow free cash flow and are targeting to be in the range of $400 to $440 million in the 2018 to 2020 time frame.

Financial and operational summary