Action on Climate Change
We understand the risk and we’re adapting to meet the challenge
We recognize the impact and challenge climate change presents society and our business today and into the future. We have been at the forefront of open and transparent dialogue regarding climate change since the early 1990’s when we supported development of Canada’s Climate Change Voluntary Challenge and Registry Program. The following highlights how we have transitioned our business to manage climate change risk and opportunity, how we have demonstrated leadership through action on climate-change-related issues and how we are positioned for climate resiliency in regards to our business, sector and customers into the future:
- We have reduced 21 million tonnes of CO2e since 2005, which is a 50 per cent reduction over the time period. On a percentage basis (not absolute), this is more than any country has achieved during the same period;
- Our strategy involves moving away from GHG-intensive coal and achieving 100 per cent clean energy by 2025, represented by renewables and gas;
- We have established ourselves as one of the leading renewable energy companies in North America and we are well positioned to build renewable energy facilities and lower-carbon gas facilities to support customer sustainability goals to decarbonize;
- Our transition plan has been established to reduce GHG for both TransAlta and our customers, while generating profit for our company. In 2019 revenues from renewable energy were $451 million and annual revenue generation from the sale of environmental attributes (Alberta carbon offsets and RECs) in 2019 was $28 million;
- Our business is showing resilience to two degrees of global warming by reducing GHG emissions – we have a target to reduce 19.7 million tonnes of CO2e by 2030 over 2015 levels. To date we have achieved 59 per cent of this target. TransAlta has aligned its corporate climate change goal with UN Sustainable Development Goal, Goal 13, Climate Action;
- The highest level of oversight on climate-change-related business impacts is at our Board through our Governance, Safety and Sustainability Committee and the Audit, Finance and Risk Committee.
The following provides further information on how we manage climate change. Information is presented in four categories below: Governance, Strategy, Risk Management, and Metrics and Targets, which aligns with the Task Force on Climate-related Financial Disclosure recommendations.
The highest level of oversight on climate change related business impacts is at our Board level, specifically by our Governance Environment, Safety and Sustainability Committee (“GSSC”) of the Board and the Audit, Finance and Risk Committee (“AFRC”) of the Board. Business impacts related to climate change are assessed by our executive team quarterly and reported to the Board GSSC and ARC, as applicable.
Our corporate vision is to be a leading clean power company by 2025. To support this vision our strategic goals include growth in renewable energy and gas, while reducing a significant amount of emissions from our coal fleet by way of coal-to-gas conversions and coal retirements.
Our corporate goal is to reduce 19.7 million tonnes of GHG emissions by 2030, while we grow renewable energy and gas. Our modeling shows that our target aligns us, under many scenarios, with science based target setting, which highlights the resilience of our business to 2 degrees of global warming. We have not officially validated a science based target, but continue to monitor and model our future performance with the Sectoral Decarbonization Approach from the Science Based Target Initiative.
Aligned with our corporate strategy, our business units or operations consistently seek energy-efficiency improvements, development of emissions offset portfolios to achieve emissions reductions at competitive costs, and development of clean combustion technologies.
We seek investment in climate-change-related mitigation solutions, such as renewable energy development, where we can maximize value creation for our shareholders, local communities, and the environment. Conversion of our large coal fleet to gas-fired generation highlights this approach, which will allow us to run our assets longer than the federally mandated coal retirement schedule. Our goals for undertaking such actions are to enhance value for our shareholders, ensure low-cost and reliable power for Albertans, and reduce the environmental impact from coal-fired generation.
Our investment and growth in renewable energy is highlighted by our diverse portfolio of renewable energy generating assets. We currently operate over 2,200 MW of hydro, wind and solar power. We are one of the largest producers of wind power in Canada and the largest producer of hydro power in Alberta. Production from renewable energy in 2018 resulted in avoidance of approximately 2.9 million tonnes of CO2e, which is equivalent to removing over 620,000 vehicles from North American roads over the same year.
We integrate risk into our risk management process, including both physical and transition-related risks. For further information please refer to our climate disclosure, which is located on the right hand side of this page.
Metrics and Targets
In 2019, we estimate that 20.6 million tonnes of GHGs were emitted as a result of normal operating activities. We have reduced 9.3 million tonnes of GHGs since 2017, which is equivalent to removing approximately 2 million cars from the road for one year. Our reduction in GHG emissions are primarily the result of coal retirements, co-firing with gas and lower production volumes at our merchant Alberta coal facilities. Since 2005, we have reduced our CO2e emissions by 21 million tonnes, which is a 50 per cent reduction over that time period. On a percentage basis (not absolute), this is more than any country has achieved during the same period.
We have a target to reduce 60 per cent or 19.7 million tonnes of GHG emissions by 2030 over 2015 levels, which is line with UN Sustainable Development Goal Goal 13, Climate Action. Since 2015 we have reduced 11.6 million tonnes, which represents a reduction of 36 per cent. By 2030, we expect to have reduced close to 30 million tonnes over 2005 levels, after adjusting for any new growth over this period.
The following graph portrays our total GHG emissions in 2005, 2015 and 2019, showing a decreasing trend over time.