Talen Energy Corporation · NASDAQ:TLN
Talen Energy — Investor Day (October 2023)
27 slides from Talen Energy's investor day presentation, Oct 24, 2023
Slide 1: Investor Site Visit Day
Investor Site Visit Day SUSQUEHANNA & CUMULUS | OCTOBER 24, 2023
Slide 2: Disclaimers
Disclaimers The information contained herein, as well as any information that has been supplied orally in connection herewith, speaks only as of the date of this presentation. Talen Energy Corporation (“Talen,” “TEC,” the “Company,” “we,” “our,” or “us”) and our affiliates and representatives expres
Slide 3: Today’s Agenda
Today’s Agenda 1 Welcome & Safe Harbor Ellen Liu | Sr. Director, Investor Relations 2 Introduction Mac McFarland | President & Chief Executive Officer 3 Capital Allocation Update Terry Nutt | Chief Financial Officer 4 Susquehanna: Zero-Carbon Nuclear Power Brad Berryman | Sr. Vice President & Chief
Slide 4: Introduction
Introduction Susquehanna: Zero-Carbon Cumulus: Zero-Carbon Nuclear Power Digital Infrastructure The cornerstone of our low-carbon intensity fleet, with a The first 24x7 carbon-free, direct-connect digital highly experienced team and top-quartile cost efficiency1 infrastructure campus 2.2 GW2 o
Slide 5: Susquehanna + Cumulus: Multiple Paths to Cash Flow Generation
Power Sales Supported by PTC Illustrative Susquehanna Cash Flow Generation (2024 – 2025) Power Sold to Wholesale Market1 ~17.2 – 17.5 TWh All-in Price (with PTC) for Wholesale Market2 ~$44 – $45/MWh Less: All-in Cost3 ~$23 – $24/MWh Susquehanna + Cumulus: Implied Cash Flow Margin ~$20 – $22/MWh Cash
Slide 6: Announcing $300mm Share Repurchase Program
Given our modest leverage (<2.0x net leverage1 as of Q2 2023) and projected cash flow generation, the Board has authorized a $300mm share repurchase program Announcing $300mm Share Talen is committed to returning capital to our shareholders Repurchase and intends to execute repurchases on an opportu
Slide 7: Susquehanna: Zero-Carbon Nuclear Power
Susquehanna: Zero-Carbon Nuclear Power BRAD BERRYMAN | CHIEF NUCLEAR OFFICER 7
Slide 8: Susquehanna: 24x7 Carbon-Free Power
Susquehanna: 24x7 Carbon-Free Power 6th largest U.S. nuclear facility, with dual units and 2.5 GW gross capacity Licensed through 2042/2044, and beginning work on additional 20-year extensions Top-quartile cost efficiency Supported by up to $15/MWh Production Tax Credit1 Nuclear fuel fully contracte
Slide 9: Susquehanna: By the Numbers
Susquehanna: By the Numbers Full Name Susquehanna Steam Electric Station (SSES) Gross: ~2.5 GW Capacity Net to Talen’s 90%: ~2.2 GW Nuclear Technology Dual-Unit Boiling Water Reactor Operating Structure Single Operator (Talen) Commercial Operation Date 1983 (Unit 1) / 1985 (Unit 2) 2042 / 2044 Licen
Slide 10: Susquehanna’s Journey: Today and Beyond
Susquehanna’s Journey: Journey to Today Our Future Today and Beyond Engaged workforce at all Continue to identify and levels to focus on safety, eliminate risk through reliability and cost proactive maintenance / Improved cost structure upgrades without damaging culture Continue our focus on
Slide 11: Nuclear Fuel Update
2024 Fuel Reload Cost Breakdown % Price Contracted by Fuel Reload Year Nuclear Fuel 16% 23% 13% Update Uranium (U3O8) 39% Conversion 8% 100% 100% • Nuclear fuel procurement is a 84% 77% 87% Enrichment 24% four-phase process • We contract fuel years in Fabrication 28% advance to avoid near-term cost
Slide 12: Video: Unit Refueling
Video: Unit 2 Refueling
Slide 13: Cumulus: Zero-Carbon Digital Infrastructure
Cumulus: Zero-Carbon Digital Infrastructure COLE MULLER | GENERAL MANAGER, CUMULUS KEVIN DALTON | CHIEF DATA CENTER OFFICER, CUMULUS 13
Slide 14: 24x7 Zero-Carbon Digital Infrastructure Campus
Current Campus 24x7 Zero-Carbon Digital Infrastructure Campus Substation 1 1,200-acre campus directly connected to Susquehanna nuclear facility 4 substations with up to 950 MW Substation 2 potential redundant capacity1 240 MW redundant capacity for data Substation 3 centers expected to be ready in 2
Slide 15: Favorable Market Dynamics
Favorable Market Dynamics Open capacity and Demand growth Customers available power driven by AI & making 24x7 at record lows machine learning carbon-free commitments 15
Slide 16: Digital Campus Optimally Positioned for Unlocking Value
Digital Campus Optimally Positioned for Unlocking Value Immediacy Powered shell complete, allowing operations to commence as soon as 2024 Scalability Near-term potential for 240 MW of redundant power; can ultimately scale to 950 MW of redundant power Comprehensive Redundancy At least two sources for
Slide 17: Cumulus Ownership Summary
Cumulus Ownership Summary Other Key ~95% equity Cumulus Stakeholder Digital Orion Energy Partners ~4% equity | $193mm term loan 12.4 GW generation portfolio Cumulus Cumulus Data Coin Other growth assets (largely renewables & battery storage) ~75% equity1 Nautilus Cryptomine (150 MW of active mining
Slide 18: Substation Electrical Operations
Full-Time Staff The Substation Electrical Operations Team is 12 Operations Professionals with over 130 years of combined experience in Substation utility operations and substation maintenance. Electrical They are dedicated to maintaining the highest rigor and reliability at our Operations 4 substati
Slide 19: Campus takes advantage of existing fiber routes
Campus takes advantage of existing fiber routes As AI & machine learning drive data center demand growth, latency is Toronto less of a concern Latency 7-15 ms Boston Latency 4-8 ms Susquehanna Pittsburgh New York City Latency 6.5 ms Latency 3-5 ms Columbus Latency 11.7 ms Philadelphia Latency 5.2 ms
Slide 20: Robust on-campus fiber network with comprehensive provider coverage
Potential Entry from North Robust on-campus Entry fiber network with Entry from from West comprehensive East provider coverage Provider 1 Provider 2 Provider 3 Provider 4 Provider 5 Entry from Note: Illustrative and not to scale; doesn’t represent exact fiber entry points. South 20
Slide 21: Video: Data Center Rendering
Video: Data Center 1 Rendering
Slide 22: Campus Potential
Data Center 1 Campus Potential Current State: Data Center 1 | 65+ MW 22
Slide 23: Campus Potential
Phase 1 Campus Potential Phase 1: 3 Data Centers | 200-240 MW 23
Slide 24: Campus Potential
Phase 1 Phase 2 Campus Potential Phases 1 & 2: 6 Data Centers | 400-480 MW 24
Slide 25: Campus Potential
Future Expansion Phase 1 Phase 2 Campus Potential Full Campus: Up to 950 MW1 1. Includes 200 MW currently associated with existing coin facility. 25
Slide 26: Unlocking Value from the Cumulus Data Assets
Unlocking Value from the Cumulus Data Assets Discussions ongoing with counterparties capable of scaling the campus to 950 MW Significant initial value capture through potential monetization; long-term value driven by CAGR of incremental revenues from scaling campus Phase 1 involves fitting out
Slide 27: Thank You
Thank You 27