TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
TransAlta Corporation (TSX: TA) (NYSE: TAC) (TransAlta or the Company) held its Annual and Special Meeting of Shareholders (the Meeting) on April 28, 2022. The total number of common shares represented by shareholders at the Meeting and by proxy was 189,079,207, representing 69.60 per cent of the Company’s outstanding common shares.
The following resolutions were considered by shareholders:
1. Election of Directors
The twelve director nominees proposed by management were elected. The votes by ballot were received as follows:
Nominee
Votes For
Per cent
Withheld
Per cent
Rona H. Ambrose
180,301,403
96.83%
5,896,534
3.17%
John P. Dielwart
185,581,642
99.67%
616,295
0.33%
Alan J. Fohrer
185,205,109
99.47%
992,828
0.53%
Laura W. Folse
185,582,150
99.67%
615,786
0.33%
Harry A. Goldgut
185,689,018
99.73%
508,919
0.27%
John H. Kousinioris
185,681,285
99.72%
516,652
0.28%
Thomas M. O’Flynn
185,248,610
99.49%
949,327
0.51%
Beverlee F. Park
185,159,327
99.44%
1,038,609
0.56%
Bryan D. Pinney
182,248,274
97.88%
3,949,663
2.12%
James Reid
185,693,600
99.73%
504,337
0.27%
Sandra R. Sharman
184,134,222
98.89%
2,063,714
1.11%
Sarah A. Slusser
185,641,558
99.70%
556,378
0.30%
2. Appointment of Auditors
The appointment of Ernst & Young LLP to serve as the auditors for 2022 was approved. The votes by ballot were received as follows:
Votes For
Per cent
Withheld
Per cent
181,978,731
96.24%
7,100,475
3.76%
3. Advisory Vote on Executive Compensation (also known as say-on-pay)
The advisory vote on the Company’s approach to executive compensation or say-on-pay was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
163,637,782
87.88%
22,560,153
12.12%
4. Approval of the Company’s Amended and Restated Shareholder Rights Plan
The resolution approving the Company’s Amended and Restated Shareholder Rights Plan was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
178,999,356
96.13%
7,198,580
3.87%
About TransAlta:
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 hydroelectric 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.
For more information about TransAlta, visit its web site at transalta.com.
Media Advisory: TransAlta and TransAlta Renewables First Quarter 2022 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its first quarter 2022 results before markets open on Friday, May 6, 2022. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) will release its first quarter 2022 results before markets on Wednesday, May 4, 2022. Any questions regarding TransAlta Renewables may be asked on the TransAlta conference call.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company.
First Quarter 2022 Conference Call:
Toll-free North American participants call: 1-888-664-6392
Related materials will be available on the Investor Centre section of TransAlta’s website at http://www.transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 261631 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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 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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta and Meta Announce 200 MW Renewable Power Purchase Agreement and Launch of the Horizon Hill Wind Project
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has entered into a long-term renewable energy purchase agreement with Meta, formerly known as the Facebook company, for the offtake of 100 per cent of the generation from its 200 MW Horizon Hill Wind Power Project (“Horizon Hill” or “facility”), to be located in Logan County, Oklahoma. Under this agreement, Meta will receive both renewable electricity and environmental attributes. This long-term contract with Meta enables TransAlta to add the 200 MW Horizon Hill Wind Project to its growing US wind generation fleet.
“Since 2020, Meta has supported its global operations with 100 per cent wind and solar energy. As our footprint grows, it’s key that we find strong partners who can help us continue to meet that goal by bringing new renewable energy to the grid,”- said Urvi Parekh, head of renewable energy at Meta. “We are excited to partner with TransAlta to make this 200 MW project a reality.”
“TransAlta is excited to partner with Meta to make Horizon Hill a reality. The delivery of clean, low-cost, reliable energy from Horizon Hill supports Meta’s sustainability goals and provides another excellent opportunity to expand our wind fleet in the United States,”- said John Kousinioris, President and Chief Executive Officer of TransAlta. “Horizon Hill brings us to 40 per cent of our target of adding 2 GW of new renewables to our fleet by 2025 under our Clean Electricity Growth Plan.”
The facility will consist of a total of 34 Vestas turbines with construction expected to begin in Q4 2022 and a target commercial operation date in the second half of 2023. TransAlta will construct, operate and own the facility. Total project capital is estimated at approximately US$290 million to US$310 million and is expected to be financed with existing liquidity and tax equity. Over 90 per cent of the project costs are captured under executed fixed price turbine supply agreements with Vestas and executed engineering, procurement, and construction agreement with Infrastructure and Energy Alternatives (IEA). The facility is expected to generate total annual earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$27 million to US$30 million including production tax credits. It is expected that Horizon Hill will remain a TransAlta project.
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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plan”, “expected”, “estimated”, “will”, “continue”, “goal”, “target” and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: the timing of turbine construction and commercial operation of the Horizon Hill Wind project; the Company’s Clean Electricity Growth Plan and achieving the target of 2 GW of new generation by 2025; the estimated construction capital for the Horizon Hill project; the expected project costs and annual EBITDA generation; the financing of the construction capital and ability to secure tax equity financing; the Horizon Hill project qualifying for production tax credit; and the Horizon Hill project remaining a TransAlta project. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to the extent of regulations pertaining to COVID-19 not becoming significantly more onerous. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: the effects of weather, catastrophes and public health crises, including COVID-19; labour availability; disruptions to the Company’s supply chains; changes to regulatory environment, including interpretation of production tax credits; armed hostilities and geopolitical conflicts; failure to obtain necessary regulatory approvals in a timely fashion, or at all; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2021. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-IFRS Measures
This news release contains references to financial measures that are calculated and presented using methodologies other than in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board, including EBITDA, and such measures may not be comparable to similar measures presented by other entities. These non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found in TransAlta’s Management’s Discussion and Analysis for the year ended December 31, 2021, available on SEDAR at www.sedar.com, on the U.S. Securities and Exchange Commission website at www.sec.gov, and on TransAlta’s website under the Investor Centre section. TransAlta utilizes these measures in managing the business, including for performance measurement, capital allocation and valuation purposes and believes that providing these performance measures on a supplemental basis to its IFRS results is helpful to investors in assessing the overall performance of TransAlta’s businesses. TransAlta cautions readers that these non-IFRS financial measures or other financial metrics may differ from the calculations disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Reports Fourth Quarter and Full Year Results
Fourth Quarter 2021 Financial Highlights
Adjusted EBITDA(1),(2) of $270 million, an increase of 15% over the same period in 2020
Free Cash Flow (FCF)(1) of $106 million, or $0.39 per share, an increase of 105% on a per-share basis from the same period in 2020
Loss before income taxes of $32 million, an improvement of $136 million from the same period in 2020
Cash flow from operating activities of $54 million, a decrease of 51% from the same period in 2020
Full Year 2021 Financial Highlights
Adjusted EBITDA(1),(2) of $1.263 billion, an increase of 36% from the same period in 2020
FCF(1) of $562 million, or $2.07 per share, an increase of 59% on a per-share basis from the same period in 2020
Loss before income taxes of $380 million, an increase of $77 million from the same period in 2020
Cash flow from operating activities of $1.0 billion, an increase of 43% from the same period in 2020
Other Business and ESG Highlights
Announced 600 MW of renewables growth projects, securing 30% of our 5-year 2 GW growth target
Achieved full phase-out of coal in Canada, with completed coal-to-gas conversions at Sundance Unit 6 and Keephills Units 2 and 3, and ceased mining activities at the Highvale mine
Reduced annual carbon emissions by 3.9 million tonnes, a 24% reduction compared to 2020
Acquired a fully contracted 122 MW portfolio of solar assets in North Carolina
Achieved commercial operations at the 206 MW Windrise wind facility
Joined the Powering Past Coal Alliance, a global organization of governmental and private sector organizations working to take action on reducing greenhouse gas emissions from coal-fired electricity generation and accelerating the energy transition
Enhanced and accelerated our near term GHG emissions target to a 75% reduction over 2015 levels
Reduced our operational waste by 55% compared to 2020 levels
Reduced our SO2 and NOx emissions by 42% and 29%, respectively, compared to 2020 levels
Increased our common share dividend by 11% to an annualized dividend of 20 cents per share
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the fourth quarter and full year ended Dec. 31, 2021.
“2021 was a record year for TransAlta. We achieved outstanding financial results, with exceptional performance from our Alberta Hydro and Gas fleets, as well as our Energy Marketing business. On the growth front, we secured 600 MW of renewables growth projects, a great first year for our Clean Electricity Growth Plan, with growth in each of our core geographies. We also reached an important milestone with the completion of the final coal-to-gas conversion, and are now fully off coal in Canada”, – said John Kousinioris, President and Chief Executive Officer.
Set out below are additional highlights from the quarter on TransAlta’s business activities, including the Company’s progress on advancing its Clean Electricity Growth Plan as well as details regarding the Company’s financial performance and liquidity.
Key Business Developments
Announced 300 MW White Rock Wind Project and Fully Executed Corporate PPAs
On Dec. 22, 2021, TransAlta executed two long-term Power Purchase Agreements (PPAs) with a new customer at its 300 MW White Rock East and White Rock West Wind Power Projects located in Caddo County, Oklahoma. The PPA is with a new customer with an AA credit rating from S&P Global Ratings. The White Rock Wind Projects will consist of 51 Vestas turbines. Construction is expected to begin in late 2022 with a target commercial operation date in the second half of 2023. TransAlta will construct, operate and own the facility. Total construction capital is estimated at approximately US$460 million to US$470 million and is expected to be financed with a combination of existing liquidity and tax equity financing. Over 90 per cent of the project costs are captured under executed fixed price turbine supply agreements and fixed price engineering, procurement, and construction agreements. The project is expected to generate average annual EBITDA(1) of approximately US$42 million to US$46 million including production tax credits.
Acquired 122MW North Carolina Solar Portfolio
On Nov. 5, 2021, the Company closed its previously announced acquisition of a 122 MW portfolio of 20 solar photovoltaic sites located in North Carolina (collectively, “North Carolina Solar”) for approximately US$99 million (including working capital adjustments) and the assumption of existing tax equity obligations. The acquisition was funded using existing liquidity.
At the closing of the acquisition, TransAlta Renewables Inc. acquired a 100 per cent economic interest in North Carolina Solar from a wholly owned subsidiary of TransAlta through a tracking share structure for aggregate consideration of approximately US$102 million.
The sites are all operational and were commissioned between November 2019 and May 2021. The facilities are secured by long-term PPAs with Duke Energy, which have an average remaining term of 12 years. Under the PPAs, Duke Energy receives the renewable electricity, capacity, and environmental attributes from each facility. North Carolina Solar is expected to generate an average annual EBITDA(1) of approximately US$9 million.
Construction Commenced on Northern Goldfields Solar and Battery Storage Project
On July 29, 2021, TransAlta Renewables announced that Southern Cross Energy (SCE), a subsidiary of the Company and an entity in which TransAlta Renewables owns an indirect economic interest, had reached an agreement to provide BHP Nickel West Pty Ltd. (BHP) with renewable electricity to its Goldfields-based operations through the construction of the Northern Goldfields Solar Project. The project consists of the 27 MW Mount Keith Solar Farm, 11 MW Leinster Solar Farm, 10 MW/5MWh Leinster Battery Energy Storage System and interconnecting transmission infrastructure, all of which will be integrated into our existing 169 MW Southern Cross Energy North remote network in Western Australia. Construction activities began in the first quarter of 2022, with target completion of the projects expected in the second half of 2022. Total construction capital for the project is estimated at approximately AU$69 million to AU$73 million. The project is expected to generate average annual EBITDA(1) of approximately AU$9 million to AU$10 million.
Executed Long-term PPA with Pembina and Commenced Construction on Garden Plain Wind
On May 3, 2021, the Company announced that it entered into a long-term PPA with Pembina Pipeline Corporation (Pembina) pursuant to which Pembina has contracted for the renewable electricity and environmental attributes for 100 MW of the 130 MW Garden Plain project. Garden Plain will be located approximately 30 km north of Hanna, Alberta. Construction activities started in the fall of 2021 with target completion of the project expected in the second half of 2022. Total construction capital for the project is estimated at approximately $190 million to $200 million. The project is expected to contribute between $14 million and $18 million of average annual EBITDA(1).
Alberta Electricity Portfolio
On Dec. 31, 2020, the Alberta Power Purchase Arrangements (Alberta PPAs) expired and, effective Jan. 1, 2021, the applicable facilities began operating on a fully merchant basis in the Alberta market, forming a core part of the Alberta electricity portfolio optimization activities.
The Alberta electricity portfolio generated gross margin of $864 million, an increase of $405 million compared to the same period in 2020. This performance was driven by strengthened power prices in the province, optimization of production during periods of favourable pricing, partially offset by higher natural gas and carbon pricing and higher transmission costs. Optimization of facilities is driven by the diversity in fuel types, which enables portfolio management and allows for maximization of operating margins. A portion of the baseload generation in the portfolio is hedged to provide cash flow certainty.
Alberta’s annual demand for electricity expanded by approximately 3% from 2020 to 2021. Electricity demand was supported by the economic recovery following the impacts of the COVID-19 pandemic and due to stronger market conditions for energy commodities. The average pool price increased from $47/MWh in 2020 to $102/MWh in 2021. Pool prices were higher in each quarter compared to 2020, generally as a result of competition among generators, higher demand in the province, tighter supply conditions due to higher planned outages, and higher natural gas and carbon prices. In addition, in 2021, Alberta experienced very strong weather-driven demand in February, June, July and December.
For the year ended Dec. 31, 2021, the Alberta Electricity Portfolio achieved a realized power price of $109 per MWh, compared to the Alberta spot pool price which averaged $102 per MWh. The Company was able to benefit during higher-priced periods by optimizing dispatch of each of the Alberta Hydro, Gas and Energy Transition fleet, ensuring high availability during peak demand, while hedged positions at Alberta Gas and Energy Transition minimized unfavourable market pricing during lower-priced hours in the quarter.
Hedged production for the fiscal year 2022 is 6,278 GWh at an average price of $75 per MWh.
Kent Hills Wind Facility Outage and Rehabilitation of Foundations
On Sept. 27, 2021, the Company’s subsidiary, Kent Hills Wind LP, experienced a single tower failure at its 167 MW Kent Hills wind facility in Kent Hills, New Brunswick. Following extensive independent engineering assessments, the root cause failure analysis indicated that deficiencies in the original design of the foundations at Kent Hills 1 and 2 had led to crack propagation within the foundations and that all 50 turbine foundations must be replaced. Foundation replacements will require expenditures of approximately $75 million to $100 million. The remediation plan is expected to commence mid-year and be implemented though 2022 and 2023. The plan is to return turbines to service as each foundation is completed.
TransAlta and New Brunswick Power Corporation continue discussions to enable the safe return to service of the facilities.
The Company has also provided notice to BNY Trust Company of Canada (the “Trustee”) that events of default may have occurred under the trust indenture governing the terms of the non-recourse project bonds (the “Bonds”). The Company is in discussions with the Trustee and holders of the Bonds to negotiate required waivers and amendments while the Company works to remedy the matters described in the notice. Although the Company expects that it will reach agreement with the Trustee and holders of the Bonds with respect to terms of an acceptable waiver and amendment, there can be no assurance that the Company will receive such waivers and amendments.
Achieved Phase-Out of Coal in Canada
During the year, the Company completed the full conversion of Keephills Unit 2, Keephills Unit 3 and Sundance Unit 6 from thermal coal to natural gas. Keephills Unit 2, Keephills Unit 3 and Sundance Unit 6 retained the same generator nameplate capacity of 395 MW, 463 MW and 401 MW, respectively. Conversion to gas reduces our CO2 emissions intensity by more than half, contributing to the 3.9 million tonnes of annual emissions reductions achieved in 2021 and advancing us toward our target of 75 per cent emissions reduction over 2015 levels by 2026. This also resulted in the end of mining activities at the Highvale mine and, effective Dec. 31, 2021, the mine entered its reclamation phase. As of Dec. 31, 2021, the Company has fully transitioned to natural gas in Canada.
Fortescue Metals Group Ltd. Dispute at South Hedland Power Station
The Company has been engaged in a dispute with Fortescue Metals Group Ltd. (FMG) as a result of FMG’s purported termination of the South Hedland PPA. On May 2, 2021, the Company entered into a conditional settlement with FMG. The settlement was concluded and the actions were formally dismissed in the Supreme Court of Western Australia on Dec. 7, 2021. The settlement amount has been recorded as revenue in the fourth quarter of 2021, while all other balances previously provided for have been reversed. The settlement has resulted in FMG continuing as a customer of the South Hedland facility.
Liquidity and Financial Position
The Company continues to maintain a strong financial position in part due to long-term contracts and hedged positions. At the end of the fourth quarter, TransAlta had access to $2.2 billion in liquidity, including $947 million in cash and cash equivalents.
Fourth Quarter and Year Ended 2021 Highlights
$ millions, unless otherwise stated
3 Months Ended Dec. 31, 2021
3 Months Ended Dec. 31, 2020
Year Ended Dec. 31, 2021
Year Ended Dec. 31, 2020
Adjusted availability (%)
83.8 %
87.1 %
86.6 %
90.7 %
Production (GWh)
5,823
7,704
22,105
24,980
Revenues
610
544
2,721
2,101
Adjusted EBITDA(1),(2)
270
234
1,263
927
Loss before income taxes
(32)
(168)
(380)
(303)
Net loss attributable to common shareholders
(78)
(167)
(576)
(336)
Cash flow from operating activities
54
110
1,001
702
FFO(1)
213
161
971
685
FCF(1)
106
52
562
358
Net loss per share attributable to common shareholders, basic and diluted
$ (0.29)
$ (0.61)
$ (2.13)
$ (1.22)
FFO per share(1),(5)
$ 0.79
$ 0.59
$ 3.58
$ 2.49
FCF per share(1),(5)
$ 0.39
$ 0.19
$ 2.07
$ 1.30
Dividends declared per common share(3)
$ 0.10
$ 0.09
$ 0.19
$ 0.22
Dividends declared per preferred share(4)
$ 0.25
$ 0.50
$ 1.02
$ 1.27
Fourth Quarter Financial Results Summary
Adjusted EBITDA(1),(2) for the three months ended Dec. 31, 2021, was $270 million, an increase of $36 million, or 15 per cent compared to the same period in 2020, largely due to higher adjusted EBITDA in our Hydro and Gas segments, which was driven by higher realized prices in the Alberta market, partially offset by lower production at Centralia Unit 2 within our Energy Transition segment due to a transformer failure that has now been resolved and an unplanned outage at the Kent Hills 1 and 2 wind facilities.
Net loss attributable to common shareholders for the three months ended Dec. 31, 2021, was $78 million compared to a net loss of $167 million in the same period of 2020, an improvement of $89 million. The net loss in 2021 was favourably impacted by lower depreciation and amortization expense related to asset retirements and impairments in our Gas and Energy Transition segments and higher adjusted EBITDA.
Cash flow from operating activities for the three months ended Dec. 31, 2021, was $54 million, a decrease of $56 million compared with 2020, primarily due to changes in non-cash working capital.
FCF(1) for the three months ended Dec. 31, 2021, was $106 million compared to $52 million for 2020, as a result of higher adjusted EBITDA due to higher realized prices in Alberta, settlement of provisions and lower sustaining capital expenditures, partially offset by higher distributions paid to subsidiaries non-controlling interests.
Full Year 2021 Financial Results Summary
Adjusted EBITDA(1),(2) for the full year ended Dec. 31, 2021, was $1.263 billion, an increase of $336 million compared to 2020. Adjusted EBITDA increased largely due to higher gross margin, driven by higher realized prices and dispatch optimization in the Alberta market from our merchant facilities residing in the Alberta Electricity Portfolio across the Hydro, Wind and Solar, Gas, and Energy Transition segments. In addition, the Energy Marketing segment also increased adjusted EBITDA due to favourable short-term trading of both physical and financial power and natural gas products across North American markets. This increase was partially offset by the retirement of Centralia Unit 1, unplanned outages at Centralia Unit 2 in the Energy Transition segment and the extended site outage at the Kent Hills 1 and 2 wind facilities.
Loss before income taxes for the full year ended Dec. 31, 2021, was $380 million, compared to $303 million for 2020, an increase of $77 million. Net loss attributable to common shareholders for 2021 was $576 million compared to a loss of $336 million in 2020. The higher loss before income taxes and the higher net loss attributable to common shareholders in 2021 was largely driven by higher asset impairments related to decisions to shut down the Highvale mine, suspend the Sundance 5 repowering project and planned retirements of Sundance Unit 4 and Keephills Unit 1. These higher asset impairments were partially offset by higher adjusted EBITDA largely resulting from the strong performance of the Alberta Electricity Portfolio across all of our fuel segments, higher gains on sale of assets due to the sale of equipment in the Energy Transition segment, the sale of the Pioneer Pipeline in the Gas segment, and lower depreciation. The higher net loss attributable to common shareholders was also impacted by higher income tax expense in 2021 due to the higher earnings from the Energy Marketing segment and the Alberta Electricity Portfolio.
Cash flow from operating activities for the full year ended Dec. 31, 2021, was $1,001 million, compared to $702 million for 2020, an increase of $299 million, primarily due to higher revenues being realized in Alberta on the merchant assets and changes in non-cash working capital, partially offset by higher fuel and purchased power and OM&A costs as the Company transitioned off coal.
FCF(1) for the full year ended Dec. 31, 2021, was $562 million, an increase of $204 million compared to $358 million for 2020, driven primarily by higher adjusted EBITDA, partially offset by an increase in sustaining capital spending related to higher planned maintenance and facility turnarounds, settlement of provisions and higher distributions paid to subsidiaries non-controlling interests.
Segmented Results For the year ended Dec. 31 ($ millions)
Adjusted EBITDA(1),(2) 2021
Adjusted EBITDA(1),(2) 2020
Hydro
$ 322
$ 105
Wind and Solar
$ 262
$ 248
Gas
$ 494
$ 367
Energy Transition
$ 133
$ 175
Energy Marketing
$ 137
$ 113
Corporate
$ (85)
$ (81)
Total
$ 1,263
$ 927
Hydro:
Adjusted EBITDA(1),(2) for the year ended Dec. 31, 2021, increased by $217 million compared to Effective Jan. 1, 2021, with the expiration of the Alberta PPA for our Alberta Hydro Assets, these facilities began operating on a merchant basis in the Alberta power market. This eliminated the net payment obligations under the Alberta PPA. With strong availability during periods of market volatility, the Company captured higher energy and ancillary service revenue, partially offset by increased costs related to portfolio management services, dam safety staffing, dredging and station services.
Wind and Solar:
Adjusted EBITDA(1),(2) for the year ended Dec. 31, 2021, increased by $14 million compared to 2020, primarily due to higher merchant pricing in Alberta, a full year of operations from the Skookumchuck wind facility and the WindCharger battery storage facility as well as incremental value from the newly commissioned or acquired assets in 2021: consisting of the Windrise wind facility and the North Carolina Solar facility. Also, fuel and purchased power costs were lower in 2021 due to the AESO transmission line loss recorded in 2020. Adjusted EBITDA was negatively impacted by lower wind resources in Eastern Canada and the US, the unplanned outage at the Kent Hills 1 and 2 wind facilities and the weakening US dollar relative to the Canadian dollar
Gas:
Adjusted EBITDA(1),(2) for the year ended Dec. 31, 2021, increased by $127 million compared to 2020, primarily due to higher merchant pricing in the Alberta market, the South Hedland PPA contract settlement and incremental production from a full year of operations at our Ada cogeneration facility, partially offset by an increase in fuel, unplanned short-term steam supply outages at our Sarnia cogeneration facility, higher OM&A costs related to the BHP pass-through projects and legal fees related to the South Hedland PPA contract settlement.
Energy Transition:
Adjusted EBITDA(1),(2) for the year ended Dec. 31, 2021, decreased by $42 million compared to 2020, primarily due the planned retirement of Centralia Unit 1, higher fuel and purchased power due to unplanned outages at Centralia Unit 2, higher carbon compliance costs for the Alberta assets primarily due to an increase in carbon prices and the weakening of the US dollar relative to the Canadian dollar throughout the year, partially offset by dispatch optimization of the Alberta assets and lower OM&A as a result the planned retirement of Centralia Unit 1.
Energy Marketing:
Adjusted EBITDA(1),(2) for the year ended Dec. 31, 2021, increased by $24 million compared to 2020 Results were better primarily due to favourable short-term trading of both physical and financial power and natural gas products across all North American markets. This was partially offset by OM&A increases due to higher incentives related to stronger performance. The Energy Marketing team was able to capitalize on short-term market volatility in the markets in which we trade without materially changing the risk profile of the business unit.
Corporate:
Our Corporate overhead costs for the year ended Dec. 31, 2021, increased by $4 million compared to 2020, primarily due to higher incentive payments, higher employee costs, higher insurance costs, and higher legal fees for settlement of outstanding legal issues, partially offset by the receipt of CEWS funding and realized gains from the total return swap. A portion of the settlement costs of our employee share-based payment plans is hedged by entering into total return swaps, which are cash settled every quarter. Excluding the impact of the total return swap, staffing costs increased due to additional headcount to support growth initiatives. As previously committed, the CEWS funding is being used to support incremental employment within the Company.
Conference call
TransAlta will hold a conference call and webcast at 9:00 a.m. MST (11:00 a.m. EST) today, February 24, 2022, to discuss our fourth quarter and full year 2021 results. The call will begin with a short address by John Kousinioris, President and Chief Executive Officer and Todd Stack, EVP Finance and Chief Financial Officer, followed by a question and answer period for investment analysts and investors. A question and answer period for the media will immediately follow.
Dial-in numbers Fourth Quarter and Full Year 2021 Results:
Toll-free North American participants call: 1-888-664-6392
A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 983771 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
Notes
(1) These items are not defined and have no standardized meaning under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results.
(2) In the fourth quarter of 2021, Comparable EBITDA was relabelled as adjusted EBITDA to align with industry standard terminology.
(3) No dividends were declared in first quarter of 2021 as the quarterly dividend related to the period covering the first quarter of 2021 was declared in December 2020.
(4) Weighted average of the Series A, B, C, E, and G preferred share dividends declared. Dividends declared vary year over year due to timing of dividend declarations.
(5) Funds from operations per share and free cash flow per share are calculated using the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding at Dec. 31, 2021 was 271 million shares (2020 275 million shares).
Non-IFRS financial measures and other specified financial measures
We use a number of financial measures to evaluate our performance and the performance of our business segments, including measures and ratios that are presented on a non-IFRS basis, as described below. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements prepared in accordance with IFRS. We believe that these non-IFRS amounts, measures and ratios, read together with our IFRS amounts, provide readers with a better understanding of how management assesses results.
Non-IFRS amounts, measures and ratios do not have standardized meanings under IFRS. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as an alternative for, or more meaningful than our IFRS results.
Adjusted EBITDA
In the fourth quarter of 2021, comparable EBITDA was relabelled as adjusted EBITDA to align with industry standard terminology. Each business segment assumes responsibility for its operating results measured to adjusted EBITDA. Adjusted EBITDA is an important metric for management that represents our core business profitability. Interest, taxes, depreciation and amortization are not included, as differences in accounting treatments may distort our core business results. In addition, certain reclassifications and adjustments are made to better assess results excluding those items that may not be reflective of ongoing business performance. This presentation may facilitate the readers analysis of trends. Adjusted EBITDA is a non-IFRS measure.
Average Annual EBITDA
Average annual EBITDA is a non-IFRS financial measure that is forward-looking, used to show the average annual EBITDA that the project currently under construction is expected to generate upon completion.
Funds From Operations (FFO)
FFO is an important metric as it provides a proxy for cash generated from operating activities before changes in working capital and provides the ability to evaluate cash flow trends in comparison with results from prior periods. FFO is a non-IFRS measure.
Free Cash Flow (FCF)
FCF is an important metric as it represents the amount of cash that is available to invest in growth initiatives, make scheduled principal repayments on debt, repay maturing debt, pay common share dividends or repurchase common shares. Changes in working capital are excluded so FFO and FCF are not distorted by changes that we consider temporary in nature, reflecting, among other things, the impact of seasonal factors and timing of receipts and payments. FCF is a non-IFRS measure.
Non-IFRS Ratios
FFO per share, FCF per share, FFO before interest to adjusted interest coverage and adjusted net debt to adjusted EBITDA are non-IFRS ratios that are presented in the MD&A. See the Reconciliation of Cash Flow from Operations to FFO and FCF and Key Non-IFRS Financial Ratios sections of the MD&A for additional information.
FFO per share and FCF per share
FFO per share and FCF per share are calculated using the weighted average number of common shares outstanding during the period. FFO per share and FCF per share is a non-IFRS ratio.
Reconciliation of these non-IFRS financial measures to the most comparable IFRS measure are provided below.
Reconciliation of Non-IFRS Measures on a Consolidated Basis
The following table reflects adjusted EBITDA and provides reconciliation to earnings (loss) before income taxes for the year ended Dec. 31, 2021 and Dec. 31, 2020:
Year ended Dec. 31, 2021 – Attributable to common shareholders
$ millions
Hydro
Wind & Solar(1)
Gas
Energy Transition
Energy Marketing
Corporate
Total
Equity accounted investments(1)
Reclass Adjustments
IFRS Financials
Revenues
383
323
1,109
709
211
4
2,739
(18)
2,721
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
25
(40)
19
(38)
(34)
34
Decrease in finance lease receivable
41
41
(41)
Finance lease income
25
25
(25)
Unrealized foreign exchange gain on commodity
(3)
(3)
3
Adjusted Revenues
383
348
1,132
728
173
4
2,768
(18)
(29)
2,721
Fuel and purchased power
16
17
457
560
4
1,054
1,054
Reclassifications and adjustments:
Australian interest income
(4)
(4)
4
Mine depreciation
(79)
(111)
(190)
190
Coal inventory write-down
(17)
(17)
17
Adjusted fuel and purchased power
16
17
374
432
4
843
211
1,054
Carbon compliance
118
60
178
178
Gross margin
367
331
640
236
173
1,747
(18)
(240)
1,489
OM&A
42
59
175
117
36
84
513
(2)
511
Reclassifications and adjustments:
Parts and materials write-down
(2)
(26)
(28)
28
Curtailment gain
6
6
(6)
Adjusted OM&A
42
59
173
97
36
84
491
(2)
22
511
Taxes, other than income taxes
3
10
13
6
1
33
(1)
32
Net other operating expense (income)
(40)
48
8
8
Reclassifications and adjustments:
Royalty onerous contract and contract termination penalties
(48)
(48)
48
Adjusted net other operating income
(40)
(40)
48
8
Adjusted EBITDA
322
262
494
133
137
(85)
1,263
Equity income
9
Finance lease income
25
Depreciation and amortization
(529)
Asset impairment
(648)
Net interest expense
(245)
Foreign exchange loss
16
Gain on sale of assets and other
54
Loss before income taxes
(380)
(1) Skookumchuck has been included on a proportionate basis in the Wind and Solar segment.
Year ended Dec.31, 2020 – Attributable to common shareholders
$ millions
Hydro
Wind & Solar(1)
Gas
Energy Transition
Energy Marketing
Corporate
Total
Equity accounted investments(1)
Reclass Adjustments
IFRS Financials
Revenues
152
332
787
704
122
7
2104
(3)
2,101
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
2
33
(14)
21
42
(42)
Decrease in finance lease receivable
17
17
(17)
Finance lease income
7
7
(7)
Unrealized foreign exchange gain on commodity
4
4
(4)
Adjusted Revenues
152
334
848
690
143
7
2,174
(3)
(70)
2,101
Fuel and purchased power
8
25
325
435
12
805
805
Reclassifications and adjustments:
Mine depreciation
(100)
(46)
(146)
146
Coal inventory write-down
(37)
(37)
37
Australian interest income
(4)
(4)
4
Adjusted fuel and purchased power
8
25
221
352
12
618
187
805
Carbon compliance
120
48
(5)
163
163
Gross margin
144
309
507
290
143
1,393
(3)
(257)
1,133
OM&A
37
53
166
106
30
80
472
472
Taxes, other than income taxes
2
8
13
9
1
33
33
Net other operating expense (income)
(11)
(11)
(11)
Reclassifications and adjustments:
Impact of Sheerness going off-coal
(28)
(28)
28
Adjusted net other operating income
(39)
(39)
28
(11)
Adjusted EBITDA
105
248
367
175
113
(81)
927
Equity income from associate
1
Finance lease income
7
Depreciation and amortization
(654)
Asset impairment
(84)
Net interest expense
(238)
Foreign exchange loss
17
Gain on sale of assets and other
9
Loss before income taxes
(303)
(1) Skookumchuck has been included on a proportionate basis in the Wind and Solar segment.
The following table reflects adjusted EBITDA by segment and provides reconciliation to earnings (loss) before income taxes for the three months ended Dec. 31, 2021:
Attributable to common shareholders
$ millions
Hydro
Wind & Solar(1)
Gas
Energy Transition
Energy Marketing
Corporate
Total
Equity accounted investments(1)
Reclass Adjustments
IFRS Financials
Revenues
84
98
172
238
26
(2)
616
(6)
610
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
3
82
(8)
(12)
65
(65)
Decrease in finance lease receivable
11
11
(11)
Finance lease income
6
6
(6)
Unrealized foreign exchange (gain) loss on commodity
Adjusted Revenues
84
101
271
230
14
(2)
698
(6)
(82)
610
Fuel and purchased power
9
6
110
149
(2)
272
272
Reclassifications and adjustments:
Australian interest income
(1)
(1)
1
Mine depreciation
(11)
(11)
11
Coal inventory write-down
(1)
(1)
1
Adjusted fuel and purchased power
9
6
109
137
(2)
259
13
272
Carbon compliance
14
25
39
39
Gross margin
75
95
148
68
14
400
(6)
(95)
299
OM&A
7
17
46
20
5
29
124
124
Reclassifications and adjustments:
Parts and materials write-down
3
3
(3)
Curtailment gain
6
6
(6)
Adjusted OM&A
7
17
46
29
5
29
133
(9)
124
Taxes, other than income taxes
1
2
2
1
6
6
Net other operating income
(10)
(8)
(18)
(18)
Reclassifications and adjustments:
Royalty onerous contract and contract termination penalties
9
9
(9)
Adjusted net other operating income
(10)
1
(9)
(9)
(18)
Adjusted EBITDA
67
76
110
37
9
(29)
270
Equity income
4
Finance income from subsidiaries
6
Depreciation and amortization
(134)
Asset impairment
(28)
Net interest expense
(59)
Foreign exchange loss
(6)
Gain on sale of assets and other
(2)
Loss before income taxes
(32)
(1) Skookumchuck has been included on a proportionate basis in the Wind and Solar segment. Includes reclassification adjustments.
The following table reflects adjusted EBITDA by segment and provides reconciliation to earnings (loss) before income taxes for the three months ended Dec. 31, 2020:
Attributable to common shareholders
$ millions
Hydro
Wind & Solar(1)
Gas
Energy Transition
Energy Marketing
Corporate
Total
Equity accounted investments(1)
Reclass Adjustments
IFRS Financials
Revenues
31
92
167
230
19
8
547
(3)
544
Reclassifications and adjustments:
Unrealized mark-to-market (gain) loss
10
34
(10)
10
44
(44)
Decrease in finance lease receivable
6
6
(6)
Finance lease income
3
3
(3)
Australian interest income
4
4
(4)
Adjusted Revenues
31
102
214
220
29
8
604
(3)
(57)
544
Fuel and purchased power
(1)
11
98
166
8
282
282
Reclassifications and adjustments:
Mine depreciation
(40)
(18)
(58)
58
Coal inventory write-down
(15)
(15)
15
Adjusted fuel and purchased power
(1)
11
57
133
8
208
74
282
Carbon compliance
30
15
45
45
Gross margin
32
91
127
72
29
351
(3)
(131)
217
OM&A
9
13
6
21
118
118
Taxes, other than income taxes
1
1
1
8
8
Net other operating expense (income)
19
19
Adjusted EBITDA
22
77
92
42
23
(22)
234
Equity income
1
Finance income from subsidiaries
4
Depreciation and amortization
(173)
Asset impairment
(17)
Net interest expense
(64)
Foreign exchange loss
2
Gain on sale of assets and other
7
Loss before income taxes
(168)
(1) Skookumchuck has been included on a proportionate basis in the Wind and Solar segment. Includes reclassification adjustments.
Reconciliation of Cash flow from operations to FFO and FCF
The table below reconciles our cash flow from operating activities to our FFO and FCF:
$ millions unless otherwise stated
3 Months Ended Dec. 31, 2021
3 Months Ended Dec. 31, 2020
Year Ended Dec. 31, 2021
Year Ended Dec. 31, 2020
Cash flow from operating activities(1)
54
110
1,001
702
Change in non-cash operating working capital balances
148
25
(174)
(89)
Cash flow from operations before changes in working capital
202
135
827
613
Adjustments
Share of adjusted FFO from joint venture(1)
6
3
13
3
Decrease in finance lease receivable
11
6
41
17
Clean energy transition provisions and adjustments(2)
(6)
15
79
37
Other(3)
2
11
15
FFO(4)
213
161
971
685
Deduct:
Sustaining capital(1)
(55)
(58)
(199)
(157)
Productivity capital
(2)
(3)
(4)
(4)
Dividends paid on preferred shares
(10)
(9)
(39)
(39)
Distributions paid to subsidiaries non-controlling interests
(38)
(29)
(159)
(102)
Principal payments on lease liabilities(1)
(2)
(10)
(8)
(25)
FCF(4)
106
52
562
358
Weighted average number of common shares outstanding in the period
271
273
271
275
FFO per share(4)
0.79
0.59
3.58
2.49
FCF per share(4)
0.39
0.19
2.07
1.30
1) Includes our share of amounts for Skookumchuck, an equity accounted joint venture. (2) Includes write-down on parts and material inventory for our coal operations, write-down on coal inventory to net realizable value and amounts due to contractors for not proceeding with the Sundance Unit 5 repowering project and impairment of a previously recognized deferred asset, as it is no longer likely that we will incur sufficient capital or operating expenditures to utilize the remaining credit. (3) Other consists of production tax credits which is a reduction to tax equity debt. (4) These items are not defined and have no standardized meaning under IFRS. Please refer to the Non-IFRS financial measures and other specified financial measures section of this earnings release.
The table below bridges our adjusted EBITDA to our FFO and FCF for the three months and year ended Dec. 31, 2021 and 2020:
3 Months Ended Dec. 31, 2021
3 Months Ended Dec. 31, 2020
Year ended Dec. 31, 2021
Year ended Dec. 31, 2020
Adjusted EBITDA(1)
270
234
1,263
927
Provisions
(18)
(10)
(43)
7
Interest expense(2)
(51)
(56)
(200)
(192)
Current income tax expense(2)
3
5
(55)
(35)
Realized foreign exchange gain (loss)
(4)
(1)
(2)
8
Decommissioning and restoration costs settled(2)
(5)
(5)
(18)
(18)
Other non-cash items(3)
18
(6)
26
(12)
FFO(4)
213
161
971
685
Deduct:
Sustaining capital(2)
(55)
(58)
(199)
(157)
Productivity capital
(2)
(3)
(4)
(4)
Dividends paid on preferred shares
(10)
(9)
(39)
(39)
Distributions paid to subsidiaries non-controlling interests
(38)
(29)
(159)
(102)
Principal payments on lease liabilities(2)
(2)
(10)
(8)
(25)
FCF(4)
106
52
562
358
1) Adjusted EBITDA is defined in the Non-IFRS financial measures and other specified financial measures section of this earnings release and reconciled to earnings (loss) before income taxes above. (2) Includes our share of amounts for Skookumchuck, an equity accounted joint venture. (3) FFO and FCF are defined in the Non-IFRS financial measures and other specified financial measures section of this earnings release and reconciled to cash flow from operating activities above. (4) Other consists of production tax credits which is a reduction to tax equity debt.
TransAlta is in the process of filing its Annual Information Form, Audited Consolidated Financial Statements and accompanying notes, as well as the associated Management’s Discussion & Analysis (MD&A). These documents will be available today on the Investors section of TransAlta’s website at transalta.com or through SEDAR at www.sedar.com.
TransAlta will also be filing its Form 40-F with the U.S. Securities and Exchange Commission. The form will be available through their website at www.sec.gov. Paper copies of all documents are available to shareholders free of charge upon request.
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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: the construction of the 300 MW White Rock East and White Rock West Wind Power Projects, including timing, amount of construction capital, securing tax equity financing, and expected range of average annual EBITDA; the average annual adjusted EBITDA expected for the North Carolina solar portfolio; the Northern Goldfields solar and battery project, including timing for commercial operation, amount of construction capital and average annual EBITDA; the Garden Plain wind project, including the timing for commercial operation, total construction capital and average annual EBITDA; the Kent Hills facility outage, including the timing and cost of remediation, and ability to reach agreement with the Trustee and holders of Bonds in respect of any related waivers and amendments; the utilization of CEWS funding; and our ability to achieve our sustainability targets.
The forward-looking statements contained in this news release are based on many assumptions including, but not limited to, the following material assumptions: impacts arising from COVID-19 not becoming significantly more onerous on the Company, which includes the Company being permitted to continue as an essential service; merchant power prices in Alberta and the Pacific Northwest; our proportionate ownership of TransAlta Renewables not changing materially; no material decline in the dividends expected to be received from TransAlta Renewables; the expected life extension of the coal fleet and anticipated financial results generated on conversion; assumptions regarding the ability of the converted units to successfully compete in the Alberta energy-only market; and assumptions regarding our current strategy and priorities, including as it pertains to our ability to realize the full economic benefit from the capacity, energy and ancillary services from our Alberta hydro assets. Forward-looking statements are subject to a number of significant risks, uncertainties and assumptions that could cause actual plans, performance, results or outcomes to differ materially from current expectations. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this news release include, but are not limited to: the impact of COVID-19, including more restrictive directives of government and public health authorities; increased force majeure claims; reduced labour availability and ability to continue to staff our operations and facilities; disruptions to our supply chains, including our ability to secure necessary equipment and to obtain regulatory approvals on the expected timelines or at all in respect of our growth projects; restricted access to capital and increased borrowing costs; changes in short-term and/or long-term electricity supply and demand; fluctuations in market prices, including lower merchant pricing in Alberta, Ontario or Mid-Columbia; reductions in production; increased costs; a higher rate of losses on our accounts receivables due to credit defaults; impairments and/or write-downs of assets; adverse impacts on our information technology systems and our internal control systems, including increased cyber security threats; commodity risk management and energy trading risks, including the effectiveness of the Company’s risk management tools associated with hedging and trading procedures to protect against significant losses; changes in demand for electricity and capacity and our risk relating to our ability to contract our generation for prices that will provide expected returns and replace contracts as they expire; changes to the legislative, regulatory and political environments in the jurisdictions in which we operate; environmental requirements and changes in, or liabilities under, these requirements; operational risks involving our facilities, including unplanned outages; disruptions in the transmission and distribution of electricity; the effects of weather, including man made or natural disasters and other climate-change related risks; unexpected increases in cost structure; reductions to our generating units relative efficiency or capacity factors; disruptions in the source of fuels, including natural gas, as well as the extent of water, solar or wind resources required to operate our facilities; general economic risks, including deterioration of equity markets, increasing interest rates or rising inflation; failure to meet financial expectations; general domestic and international economic and political developments, including armed hostilities, the threat of terrorism, cyberattacks, diplomatic developments or other similar events; equipment failure and our ability to carry out or have completed the repairs in a cost-effective manner or timely manner, or at all, including if the remediation at the Kent Hills wind facilities is more costly than expected; the holders of the Kent Hills Bonds declaring the principal and interest on the bonds and all other amounts, together with any make-whole amount due thereunder, to be immediately due and payable; industry risk and competition; fluctuations in the value of foreign currencies; structural subordination of securities; counterparty credit risk; changes to our relationship with, or ownership of, TransAlta Renewables; changes in the payment or receipt of future dividends, including from TransAlta Renewables; risks associated with development projects and acquisitions, including capital costs, permitting, labour and engineering risks, and delays in the construction or commissioning of projects; inadequacy or unavailability of insurance coverage; our provision for income taxes; legal, regulatory and contractual disputes and proceedings involving the Company; reliance on key personnel; labour relations matters and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2021. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Announces Early-Stage Hydrogen Investment in Ekona Power Inc.
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has made a $2 million equity investment in Ekona Power Inc’s (Ekona) Series A funding round. The investment will help support the commercialization of Ekona’s novel methane pyrolysis technology platform, which produces cleaner and lower-cost turquoise hydrogen.
The investment will provide TransAlta with a seat on Ekona’s Strategic Committee, whose members will receive project updates, guide development and become priority commercialization partners if the technology is successful. TransAlta believes hydrogen, as a fuel source, is a promising pathway to decarbonize the electricity sector and provide dispatchable, net-zero generation.
We are excited to make this early-stage hydrogen investment. Ekona has taken an innovative approach to its technology development, directly addressing the issues of high production costs and emissions from current conventional hydrogen production methods,- said John Kousinioris, President and Chief Executive Officer of TransAlta. If successful, Ekona’s technology will provide low-cost hydrogen to fuel clean, reliable, and dispatchable electricity generation, added Mr. Kousinioris.
We are very pleased to be working with TransAlta. Electrical power generation is a key market for Ekona’s low-cost clean hydrogen, and our collaboration with TransAlta, a leader in this market, will be instrumental in achieving effective and economical decarbonization of large scale dispatchable electrons,- said Chris Reid, Chief Executive Officer of Ekona.
Ekona’s technology uses the decomposition of natural gas to produce hydrogen and solid carbon and has the potential to offer cost-effective hydrogen production with 90%+ fewer emissions than conventional steam methane reformer technologies. Built on the principles of combustion and high-speed gas dynamics, if successful, the platform would be low-cost, scalable, and could be sited wherever natural gas infrastructure exists.
About Ekona Power Inc.
Ekona is a Vancouver-based venture established by Evok Innovations and Innovative Breakthrough Energy Technology (IBET). Ekona is developing a revolutionary technology that transforms the way we produce clean hydrogen. Ekona’s solution is an innovative and low-cost methane pyrolysis platform that converts natural gas into hydrogen and solid carbon, drastically reducing greenhouse gas emissions. Visit their website at ekonapower.com for more information.
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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-looking Information
This news release contains forward-looking information, within the meaning of applicable Canadian securities laws, and forward-looking statements, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as forward-looking statements). In some cases, forward-looking statements can be identified by terminology such as plan, expected, estimated, will, continue, goal, target and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: the commercialization of Ekona’s novel methane pyrolysis technology platform; that the Ekona technology platform produces cleaner and lower-cost turquoise hydrogen; becoming a priority commercialization partners if Ekona’s technology is successful; and the ability of Ekona’s technology to provide low-cost hydrogen to fuel clean, reliable, and dispatchable electricity generation. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company’s experience and its perception of historical trends and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include technology development risks and risks relating to the commercializing Ekona’s new technology, such asincreasingly intense competition, ability to attract customers, loss of key personnel and securing proprietary technology rights. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
Media Advisory: TransAlta and TransAlta Renewables Fourth Quarter 2021 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its fourth quarter 2021 results before markets open on Thursday, February 24, 2022. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
TransAlta Renewables Inc. (TransAlta Renewables) (TSX: RNW) will release its fourth quarter 2021 results before markets on Thursday, February 24, 2022. Any questions regarding TransAlta Renewables may be asked on the TransAlta conference call.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as the company.
Fourth Quarter 2021 Conference Call:
Toll-free North American participants call: 1-888-664-6392
Related materials will be available on the Investor Centre section of TransAlta’s website at http://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 983771 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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 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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
TransAlta Announces Outlook and Continuing Strong Cash Flow for 2022
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today its financial outlook for 2022.
Highlights
Comparable EBITDA range of $1.065 billion to $1.185 billion
Free Cash Flow (FCF) range of $455 million to $555 million or FCF per share range of $1.68 to $2.05
Sustaining capital range of $150 million to $170 million
Continued delivery of TransAlta’s Clean Electricity Growth Plan by reaching final investment decision on 400 to 500 MW of additional clean energy projects across Alberta, the United States and Australia to deliver $50 million to $70 million of incremental EBITDA
We are pleased to announce that our annual outlook highlights continuing strong cash flow expectations for 2022. Our fleet remains well positioned to capture the ongoing strength we see in the Alberta merchant market. We also remain focused on growth that creates value for our shareholders as we work to deliver on our 2 GW renewables growth target by 2025. In 2021, our team secured 600 MW of new renewables projects demonstrating our competitiveness and capability to deliver our growth strategy across all our geographies,- said John Kousinioris, President and Chief Executive Officer of TransAlta.
2022 marks our transition off coal in Canada. With the completion of all our coal-to-gas conversions, and with our renewables growth plan well underway, we have adopted a more ambitious target of 75 per cent emissions reduction over 2015 levels by 2026. We are also proud to be the first publicly-traded electricity company in Canada to commit to setting a science-based emissions reduction target. We are excited for another great year of execution and ESG performance for TransAlta, added Mr. Kousinioris.
2022 Strategic Priorities
In addition to meeting the financial targets set out in the outlook, the Company is focused on the following key priorities for 2022:
Continue execution of the Clean Electricity Growth Plan for 2022 to 2025 by reaching final investment decision on 400 to 500 MW of additional clean energy projects across Canada, the United States and Australia
Achieve commercial operation of the Garden Plain wind project and Northern Goldfields solar and storage project in 2022
Progress the construction of the White Rock wind facilities for commercial operation in 2023
Expand our development pipeline
Recontract the Sarnia, Pingston and Upper Mamquam facilities
Progress the rehabilitation of Kent Hills targeting a safe return of the wind facility to full operations by 2023
Maintain an effective response to COVID-19 and a safe return to office
ESG Targets
The Company has a comprehensive and ambitious set of environment, social, and governance (ESG) targets which supports the long-term success of our business and highlights our ESG value proposition. These targets include:
Environment
Achieve a company-wide reduction of greenhouse gases emissions (GHG) of 75 per cent over 2015 levels by 2026
Discontinue coal generation in the United States by the end of 2025
Develop new renewable projects and power offerings that support customer sustainability goals by delivering low cost, reliable and clean energy solutions
Social
Achieve at least 40 per cent female employment among all employees by 2030
Maintain equal pay for women in equivalent roles as men
Support equal access to all levels of education for youth and Indigenous peoples through financial support and employment opportunities
Provide Indigenous cultural awareness training to all TransAlta employees by the end of 2023
Governance
Achieve 50 per cent female representation on the board of directors of the Company by 2030
Maintain our position as a leader in integrated ESG disclosure
2022 Financial Outlook
Comparable EBITDA is estimated to be between $1.065 billion to $1.185 billion. The midpoint of the range represents continued strong performance compared to historical levels. The Company expects comparable EBITDA for 2022 to be impacted by a number of factors, including:
Continuing strong merchant pricing levels in Alberta and the Pacific Northwest though at a lowered target price range than 2021 for both regions. Lower year-over-year pricing in Alberta is expected to be driven by fewer planned outages and the expected additions of new wind and solar supply including TransAlta’s new Windrise wind facility and Garden Plain wind facility, expected to achieve commercial operation in late 2022. Lower year-over-year pricing in the Pacific Northwest will be impacted by natural gas prices and hydro generation
Continuing outage of Kent Hills 1 and 2 with remediation efforts for foundations expected to commence during the second quarter of 2022 with the aim of fully returning the wind facility to service by the end of 2023
Adjusted performance expectations from the Energy Marketing segment due to exceptional performance achieved in 2021
Full year of EBITDA contributions from the Windrise and North Carolina solar asset additions
The Company expects sustaining capital to be in the range of $150 million to $170 million. The midpoint for the range represents a 25 per cent decrease from the midpoint of the 2021 outlook. This is driven by fewer planned maintenance outages at the thermal fleet in Alberta due to completion of gas conversions that occurred in 2021, partially offset by increased sustaining capital expenditures at Sarnia for a planned major maintenance, as well as increased dam safety and major maintenance across our Hydro fleet. The Kent Hills foundation rehabilitation capital expenditure has been segregated from our sustaining capital range due to the extraordinary and rare nature of this expenditure. The initial estimate range for the rehabilitation at Kent Hills is between $75 million to $100 million with approximately $40 million to $60 million estimated to be incurred in 2022.
FCF is expected to be between $455 million and $555 million and excludes impact of rehabilitation capital expenditures required at Kent Hills. The midpoint of the range represents a 5 per cent decrease from the 2021 outlook midpoint largely driven by lower Alberta power pricing, a return to normal performance from Energy Marketing, and a step-up in mine reclamation expenditures, partially offset by the contribution from new assets and lower expected sustaining capital.
The following table summarizes and provides additional details pertaining to our 2022 outlook:
Measure (millions)
2022 Target
2021 Target (as at Q3 2021)
Comparable EBITDA(1)
$1,065 to $1,185
$1,200 to $1,300
FCF (1)
$455 to $555
$500 to $560
Range of key power price assumptions:
Market
2022 Power Prices
2021 Power Prices
Alberta Spot ($/MWh)
$80 to $90
$95 to $105
Mid-C Spot ($/MWh)
US$45 to US$55
US$50 to US$60
AECO Gas Price ($/GJ)
$3.60
$3.45
Alberta spot price sensitivity: a +/- $1/MWh change in spot price is expected to have a +/- $10 million annualized impact on Comparable EBITDA.
Other assumptions relevant to 2022 financial outlook (millions):
Sustaining capital(2)(3)
$150 to $170
Energy marketing gross margin
$95 to $115
Alberta Hedging assumptions full year 2022:
Hedged production (GWh) (4)
6,278
Hedge price ($/MWh)
$75
Hedged gas volumes (GJ) (5)
50 million
Hedge gas price ($/GJ)
$2.75
(1) These items are not defined under IFRS. Presenting these items provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Free Cash Flow, Discussion of Segmented Comparable Results, and Earnings and Other Measures on a Comparable Basis sections of TransAlta’s 2021 third quarter management discussion and analysis for additional information. (2) Excludes payments associated with finance leases. (3) Excludes Kent Hills rehabilitation capital. (4) Represents approximately 75 per cent of expected Alberta thermal production. (5) Represents approximately 55 per cent of expected Alberta thermal fuel requirements.
Segmented Financial Reporting
During the fourth quarter of 2021, the Company changed its segmented reporting disclosures to align with the Company’s Clean Electricity Growth Plan. The segment reporting changes reflect a corresponding change in how management and the Chief Executive Officer assess the performance of the Company. The Company’s revised segmentation will take effect with its year-end annual report as follows:
Elimination of the Alberta Thermal and Centralia segments
Reorganization of the North American Gas and Australia Gas segment into a new Gas segment
The Alberta Thermal facilities that have been converted to gas will be included in the redefined Gas segment. This will include the off-coal agreement with the Province of Alberta
The legacy coal assets (not converted to gas) previously included in Alberta Thermal, the Centralia facility, Centralia mine and the Highvale mine will be included in a new Energy Transition segment
No changes will be made to the Hydro, Wind and Solar or Energy Marketing segments.
The new segments to be reported in our year-end financial report are summarized as follows: Hydro, Wind and Solar, Gas, Energy Transition, Energy Marketing, and Corporate.
The full details of the approved ESG targets are now available at transalta.com/sustainability. More information in regard to ESG targets and the Company’s ESG performance will be included in the Company’s integrated annual report for the year-ended December 31, 2021.
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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-looking Information
This news release contains forward-looking information, within the meaning of applicable Canadian securities laws, and forward-looking statements, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as forward-looking statements). In some cases, forward-looking statements can be identified by terminology such as plan, expected, estimated, will, continue, goal, target and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: the Company’s financial outlooks for 2022, including Comparable EBITDA, free cash flow, energy marketing gross margin, and sustaining capital; the sensitivity of Comparable EBITDA to Alberta spot prices; TransAlta’s Clean Electricity Growth Plan, and associated incremental EBITDA; extent of emission reductions and ability to achieve other ESG targets in 2022 and beyond; achieving final investment decisions on 400 to 500 MW of additional development projects across Canada, the United States and Australia; achieving commercial operation of the Garden Plain wind project and Northern Goldfields solar and storage project in 2022; achieving commercial operation for the White Rock wind facilities in 2023; expand the development pipeline; recontracting each of Sarnia, Pingston and Upper Mamquam; and progressing the rehabilitation of Kent Hills to safely return the wind facility back to full operation by 2023, and the cost thereof. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: the Company’s 2022 Alberta hedge price for volume and production of gas and power, respectively; the Alberta and Mid-C spot price; the AECO gas price; that pricing in Alberta will be driven by fewer planned outages and the expected additions of new wind and solar supply; the regulatory environment; and the extent of regulations pertaining to COVID-19 not becoming significantly more onerous and current conditions and expected future developments. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: operational risks involving our facilities; construction risks, including as it pertains to the supply of equipment and labour availability; changes in market prices where we operate; unplanned outages at generating facilities and the capital investments required; equipment failure and our ability to carry out repairs in a cost effective and timely manner; the effects of weather, catastrophes and public health crises; disruptions in the source of thermal fuels, water, solar or wind required to operate our facilities, including the necessary natural gas supply to support the conversion of the coal units; energy trading risks; failure to obtain necessary regulatory approvals in a timely fashion, or at all; negative impact to our credit ratings; legislative or regulatory developments and their impacts; increasingly stringent environmental requirements and their impacts; increased competition; global capital markets activity (including our ability to access financing at a reasonable cost); changes in prevailing interest rates; currency exchange rates; inflation levels and commodity prices; general economic conditions in the geographic areas where TransAlta operates; disputes or claims involving TransAlta or TransAlta Renewables; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended December 31, 2020. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-IFRS Measures
This news release contains references to financial measures that are calculated and presented using methodologies other than in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board, including EBITDA, and such measures may not be comparable to similar measures presented by other entities. These non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found under the Additional IFRS Measures and Non-IFRS Measures and under the Reconciliation of Non-IFRS Measures sections of TransAlta’s Management’s Discussion and Analysis for the nine months ended September 30, 2021, available on SEDAR at www.sedar.com, on the U.S. Securities and Exchange Commission website at www.sec.gov, and on TransAlta’s website under the Investor Centre section. TransAlta utilizes these measures in managing the business, including for performance measurement, capital allocation and valuation purposes and believes that providing these performance measures on a supplemental basis to its IFRS results is helpful to investors in assessing the overall performance of TransAlta’s businesses. TransAlta cautions readers that these non-IFRS financial measures or other financial metrics may differ from the calculations disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Achieves Full Phase-Out of Coal in Canada
TransAlta Corporation (TSX: TA; NYSE: TAC) (TransAlta or the Company) announced today that it has completed the last of three planned coal-to-gas conversions (CTG) at its Alberta Thermal power generation facilities near Wabamun, Alberta.
“The full conversion of Keephills Unit 3 (KH3) from thermal coal to natural gas is a significant milestone for TransAlta in its transition off coal. We are pleased to have completed this important step, nine years ahead of the government target,- said John Kousinioris, President and CEO of TransAlta. “Our coal transition is among the most meaningful carbon emissions reduction achievements in Canadian history.”
“Converting to natural gas from coal maintains the current generation capacity of KH3 and reduces our CO2 emissions by almost 50 per cent from approximately 0.86 tonnes CO2e per MWh to approximately 0.43 tonnes CO2e per MWh,” Mr. Kousinioris added. “This not only highlights TransAlta’s continued commitment to meet Alberta’s need for safe, reliable and low-cost electricity but also delivers a step-change reduction in the emissions from our converted units.”
The $29 million investment in the KH3 conversion plus another $48 million for gas infrastructure and maintenance projects brought a significant boost to the local economy, and at its peak provided nearly 600 construction jobs. Since 2019, TransAlta has invested $295 million in its CTG program that also included conversion of Sundance Unit 6 (Q1-2021), conversion of Keephills Unit 2 (Q3-2021), conversion of Sheerness Units 1 and 2, plus construction of new high-volume gas delivery infrastructure.
Overall, the converted units generate nearly 50 per cent fewer CO2 emissions fueled by natural gas compared to coal. This project is a significant achievement for TransAlta towards its target to reduce 60 per cent, or 19.7 million tonnes, of annual greenhouse gas emissions by 2030 over 2015 levels and achieve carbon neutrality by 2050. By meeting its 2030 target, TransAlta’s performance will exceed Canada’s national Paris Agreement target of 40-45 per cent reduction by 2030. The completed conversions will also contribute to the goals of the Powering Past Coal Alliance, which TransAlta joined at the 26th UN Climate Change Conference of the Parties (COP26).
With successful completion of the KH3 conversion and the planned closure of the Highvale coal mine effective December 31, 2021, TransAlta’s thermal facilities in Alberta will have been fully transitioned to 100 per cent natural gas operation. In aggregate, TransAlta has retired 3,794 MW of coal-fired generation capacity since 2018 while converting 1,659 MW to cleaner burning natural gas.
This achievement, coupled with TransAlta’s growing and diversified generating portfolio, including hydro, wind, solar and battery assets, helps position TransAlta to be a highly competitive provider of reliable, low and zero-emitting electricity for customers in Canada, the United States, and Australia.
TransAlta Thermal Facility Status Summary (near Wabamun Lake, Alberta)
Unit
Unit MCR (MW net)
Current Status
Sundance Unit 1
280
Retired Dec. 31, 2017
Sundance Unit 2
280
Retired July 31, 2018
Sundance Unit 3
368
Retired July 31, 2020
Sundance Unit 4
406
Fueled only on natural gas Jan. 1 to Mar. 31, 2022. Scheduled to retire April 1, 2022.
Sundance Unit 5
406
Retired Nov. 1, 2021
Sundance Unit 6
401
Converted to natural gas Feb. 1, 2021
Keephills Unit 1
395
Scheduled to retire Dec. 31, 2021
Keephills Unit 2
395
Converted to natural gas July 19, 2021
Keephills Unit 3
463
Converted to natural gas Dec. 29, 2021
Sheerness Unit 1
200
Converted to natural gas March 31, 2021
Sheerness Unit 2
200
Converted to natural gas April 4, 2020
Highvale Mine
Ending mining operations Dec. 31, 2021. Will begin full mine reclamation effective Jan. 1, 2022.
About TransAlta:
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.
For more information about TransAlta, visit its website at transalta.com.
This news release contains “forward-looking information” within the meaning of applicable Canadian securities laws, and “forward-looking statements” within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “continue”, “will”, “develop”, “goal”, “target” and similar expressions suggesting future events or future performance. More particularly, and without limitation, this news release contains forward-looking statements and information relating to: the Company’s target of reducing 60 per cent, or 19.7 million tonnes, of annual greenhouse gas emission by 2030 over 2015 levels and achieving carbon neutrality by 2050, the Company’s expected performance exceeding Canada’s national Paris Agreement target, the planned closure of the Highvale coal mine effective December 31, 2021 and the resulting full transition of the Company’s thermal facilities in Alberta to 100 per cent natural gas operation, and the expected timing of the retirement of Keephills Unit 1 and the full retirement of Sundance Unit 4. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to the extent of regulations pertaining to COVID-19 not becoming significantly more onerous and current conditions and expected future developments. These 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. Some of the factors that could cause such differences include: the effects of weather catastrophes and public health crises, including COVID-19; labour availability; disruptions to the Company’s supply chains; failure to obtain necessary regulatory approvals in a timely fashion, or at all; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2020, 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 these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
TransAlta Announces 300 MW White Rock Wind Project
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has entered into two long-term Power Purchase Agreements (PPAs) for the offtake of 100 per cent of the generation from its 300 MW White Rock East and White Rock West Wind Power Projects (collectively, “White Rock Wind Project” or the “facility”), to be located in Caddo County, Oklahoma. Contracting the renewable electricity and environmental attributes to an outstanding new customer with an AA credit rating from S&P Global Ratings enables TransAlta to move into the construction phase and add the 300 MW White Rock Wind Project to its growing wind generation fleet.
“TransAlta is thrilled to make our White Rock Wind Project a reality. The delivery of low-cost, reliable, and clean energy from White Rock supports our customer’s sustainability goals and provides an excellent opportunity to expand our wind fleet in the United States”,- said John Kousinioris, President and Chief Executive Officer of TransAlta. “This project is another step towards executing our recently announced Clean Electricity Growth Plan of delivering 2 GW of capacity by 2025. White Rock East and West will collectively be the largest wind project we have undertaken and are excellent additions to our Company’s expanding wind portfolio.”
The White Rock Wind Project will consist of a total of 51 Vestas turbines with construction expected to begin in late 2022 and a target commercial operation date in the second half of 2023. TransAlta will construct, operate and own the facility. Total construction capital is estimated at approximately US$460 million to US$470 million and is expected to be financed with existing liquidity and tax equity. Over 90 per cent of the project costs are captured under executed fixed price turbine supply agreements with Vestas and executed fixed price engineering, procurement, and construction agreements with M.A. Mortenson Company. The project is expected to generate total annual earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$44 million including production tax credits. It is expected that the White Rock Wind Project will remain a TransAlta project.
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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
Cautionary Statement Regarding Forward-looking Information
This news release contains “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In some cases, forward-looking statements can be identified by terminology such as “plan”, “expected”, “estimated”, “will”, “continue”, “goal”, “target“ and similar expressions suggesting future events or future performance. In particular, this news release contains, without limitation, statements pertaining to: TransAlta’s Clean Electricity Growth Plan; the timing of turbine construction and commercial operation of the White Rock East and West Projects; the estimated construction capital for the White Rock Wind Project; expected sources of financing for the White Rock Wind Project; the expected project costs and annual EBITDA generation; and the expectation that the White Rock Wind Project will remain TransAlta projects. The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company’s experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to the extent of regulations pertaining to COVID-19 not becoming significantly more onerous and current conditions and expected future developments. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: the effects of weather, catastrophes and public health crises, including COVID-19; labour availability; disruptions to the Company’s supply chains; failure to obtain necessary regulatory approvals in a timely fashion, or at all; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2020. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes and is given as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-IFRS Measures
This news release contains references to financial measures that are calculated and presented using methodologies other than in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board, including EBITDA, and such measures may not be comparable to similar measures presented by other entities. These non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Certain additional disclosures for these non-IFRS financial measures have been incorporated by reference and can be found on page M29 under the “Additional IFRS Measures and Non-IFRS Measures” and page M30 under the “Reconciliation of Non-IFRS Measures” sections of TransAlta’s Management’s Discussion and Analysis for the nine months ended September 30, 2021, available on SEDAR at www.sedar.com, on the U.S. Securities and Exchange Commission website at www.sec.gov, and on TransAlta’s website under the Investor Centre section. TransAlta utilizes these measures in managing the business, including for performance measurement, capital allocation and valuation purposes and believes that providing these performance measures on a supplemental basis to its IFRS results is helpful to investors in assessing the overall performance of TransAlta’s businesses. TransAlta cautions readers that these non-IFRS financial measures or other financial metrics may differ from the calculations disclosed by other businesses and, as a result, may not be comparable to similar measures presented by other issuers and entities.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
Correction Notice to Press Release Regarding Dividend Amount on Preferred Shares, Series B
TransAlta Corporation (TSX: TA) (NYSE: TAC) announced today a correction to its press release issued December 13, 2021 in respect of the dividend amount declared on its Cumulative Redeemable Rate Reset First Preferred Shares, Series B (the Series B shares). In the press release, the dividend amount payable on March 31, 2022 to shareholders of record on March 1, 2022 was misstated as $0.53236 per Series B share. The correct amount is $0.13309 per Series B share.
All currency is expressed in Canadian dollars.
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 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 hydroelectric 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.
For more information about TransAlta, visit our web site at transalta.com.
