Statement following Government of Alberta announcement
November 29, 2016
Alberta’s power sector has reached a turning point with the announcement of several impactful and far-reaching agreements that provide clarity about proposed changes to transition Alberta’s electric system to a low carbon economy. We expect these changes to transform our Alberta business strategy. The announcements last week include:
- The Alberta government announced it would move away from the current Alberta Energy Only electricity market and create a Capacity Market in which both energy and capacity will be priced in competitive auctions.
- The government and TransAlta also announced a binding off-coal agreement that provides compensation for the stranded value on the K3, G3 and Sheerness coal plants that had useful lives beyond 2030.
- We signed a Memorandum of Understanding with the Alberta government. Among other things, the MOU will lead to a policy framework that allows us to complete coal-to-gas conversions on many of our existing coal plants. These converted plants will serve Alberta under the new Capacity market. The MOU also acknowledges our commitment to collaborate on transitioning our existing renewable assets so they can operate on a level playing field in the new capacity market. We will also seek to find mechanisms that support larger, long-lived hydro projects here in Alberta.
- And the federal government’s announced its intention to create gas, and coal-to-gas regulations to support the transition to low carbon generation across Canada. These announcements reflect the willingness of both the federal and the provincial governments to listen to our concerns. To reference a strategic theme I’ve mentioned throughout 2016: Balance did — indeed — win.
Our work with both the federal and provincial governments has shown that both governments understand the importance of investor confidence as a foundation for a strong economy. These landmark agreements demonstrate a belief that investor confidence is critical to attracting new investment capital and also for reinvesting existing cash flows into future opportunities. As a package, these agreements have restored investor confidence in Alberta and give us both clarity and confidence needed to achieve a successful transition to a low carbon economy here in the Alberta market.
President and CEO
October 19, 2016
We welcome the clear roadmap emerging with Premier Notley’s announcement today of Alberta’s commitment to support the conversion of coal-fired plants to gas.
It is a timely signal to the market that financial certainty and stability are necessary to attract new investment, and will help generators ensure competitive electricity costs for businesses and customers as Alberta’s economy begins to recover.
TransAlta has already completed a significant amount of work on the logistics and timing of plant conversions.
Accelerating TransAlta’s coal transition, while ramping up our renewables, including hydro, wind and solar, are critical to keeping Alberta competitive. We look forward to being active participants in the transition.
President and CEO