Capital Power Corporation · TSX:CPX
Capital Power — Investor Presentation (September 2024)
30 slides from Capital Power's investor presentation, September 2024
Slide 1: Building the leading power producer in North America
Reliable Affordable Clean Building the leading power producer in North America September 2024
Slide 2: Capital Power is the 5th largest gas IPP in North America
Capital Power is the 5th ~14% largest gas IPP in North 10-year total shareholder return1 America and has a track record for growth and 40% BBB- / decarbonization BBB (low) reduction in emission intensity Investment grade credit rating 4x increase total (S&P, DBRS) capacity ~40% / ~60% $6 B U.S. / Ca
Slide 3: Our core businesses uniquely position us to excel in the North American power industry
Our core businesses uniquely position us to excel in the North American power industry Flexible Generation Renewables Trading & Origination • Critical, dispatchable supply • Affordable and clean • Actively trade in North American power, • Reliable and affordable • Carbon market opportunities gas and
Slide 4: We have a diverse portfolio anchored in our core markets
We have a diverse portfolio anchored in our core markets Geography | Capacity Canada | ~50% US | ~50% 4
Slide 5: A focus on renewables growth has created a need for firm supply
A focus on Energy transition Energy expansion renewables growth has created a need for firm supply expansion Unmet firm power demand Today 5
Slide 6: North American power demand will double by 2050
North American power Annual energy consumption from electricity in North America (QBTU1) demand will double 90 by 2050 80 78 70 60 51 50 38 40 30 20 10 0 2025 2035 2050 1. Quadrillion British Thermal Units Source: EIA, BCG Analysis 6
Slide 7: Generative AI is accelerating data center power demand growth
From 2.5% to 6-7.5% Data centre share of U.S. electricity consumption Data centre electricity consumption in the U.S., TWh (2022-30) Generative AI is 2.5x 3.1x accelerating data 390 center power demand 320 growth in the U.S. 126 2022 2030 original 2030 with estimate GenAI max BCG est. 2.5% 6% 7.5% S
Slide 8: Data centres need firm supply and will challenge the supply mix
Renewables + battery resources required to replicate an efficient 1,000 MW gas plant: Data centres need firm supply and will challenge ~10x ~9x ~1,000x the supply mix Capital Capacity Land Source: National Renewable Energy Lab (NREL) 8
Slide 9: Our Strategy
Our Strategy DELIVER BUILD CREATE Established business Greenfield & brownfield Commercial solutions for We have a Description with cash flow expansion wholesale customers clear strategy 1 FLEXIBLE GENERATION Optimize current fleet, acquire new Flexible Generation Expand firm capacity, build utility-
Slide 10: Balanced energy solutions: Flexible Generation, Renewable Power, Trading & Origination
Physical + Firm Power + + = Trading & Balanced Flexible Renewable Origination Energy Generation Power Solutions Virtual Power + Financial Solutions 10
Slide 11: Our balanced energy solutions create a market-ready strategy
Our balanced energy solutions create a market-ready strategy Resources • Superior fleet • Access to capital Market opportunity Market-ready strategy • Long-term and growing need for • Delivering balanced grid-firming supply from Flexible energy solutions through Capabilities Generation deliver-build
Slide 12: Operational excellence: Execute high standards for asset planning, performance and safety
Operational excellence: Execute high standards for asset planning, performance and safety 450+ years of experience across 22 plant managers with integrated Engineering, HSSE and Supply Chain People functions within Operations Optimized turnaround 93% average planning and execution, availability ove
Slide 13: Building on our successful history: Genesee Repowering
Building on our successful history: Genesee Repowering Most efficient natural gas 512 MW Up to 3.4 Mt combined cycle plant in Additional net Annual emission Canada capacity reduction Value creation through increased efficiency, higher capacity and decarbonization 13
Slide 14: We have a proven track record of M&A value creation
6-9% AFFO per share accretion We have a proven track record of M&A value creation 3-10 years PPA extension 14
Slide 15: We are focused on markets we understand and with the right fundamentals
Our core businesses We are focused Flexible Generation Renewables Trading & on markets we Origination understand and Our core markets today Alberta, Ontario, MISO, WECC Alberta, Ontario, MISO with the right In key North American markets to support our fundamentals Growth generation fleet Southeast,
Slide 16: We are committed to growing our dividend per share, as we invest in growth
5-Year historical dividend growth We are committed ~7% growth CAGR Historical to growing our Average payout ratio: 36%1 dividend per Continued dividend growth share, as we invest in growth Near-term 6% growth to 2025 Target payout ratio: 45-55% Long-term 2-4% growth beyond 2025 Target payout ratio:
Slide 17: We have a disciplined approach to capital allocation
Equity hurdle rates We have a Flexible 12-14% Generation disciplined 5-year target growth approach 70% capital allocation (2025 – 2029) 20% Renewables 10-12% to capital allocation Other 15-20% 10% Targeted total shareholder return of 12-14% 17
Slide 18: Capital Power is best positioned to lead the North American energy expansion
Capital Power is best positioned to lead the North American energy expansion Strong Market Market-ready foundation opportunity strategy We are market ready with Demand for grid Grow Flexible Generation a unique competitive advantage firming supply and renewables 18
Slide 19: Appendix I: Power Industry Fundamentals
Reliable Affordable Clean Appendix I Power Industry Fundamentals 19
Slide 20: Renewable energy will play a larger role in the energy supply mix going forward
18% 28% 32% 36% 40% 43% Renewable energy will play a larger role 48% 37% 33% in the energy supply 31% 28% 26% mix going forward 34% 36% 35% 33% 32% 30% 2023 2030 2035 2040 2045 2050 Renewables2 Other sources3 Natural gas Forecasted NAMR1 electricity net generation, by source (TWh, % share) 1. North
Slide 21: Intermittent nature of solar and wind requires Flexible Generation
Firm supply or storage required Power profile (MW) Solar output 40,000 Intermittent nature 20,000 Electricity demand of solar and wind 0 0 2 4 6 8 10 12 14 16 18 20 22 24 requires Flexible Time of day (24 - hour scale) Wind output Generation to Power profile (MW) maintain reliability 5,000 Solar out
Slide 22: Appendix II: Additional CPX Details
Reliable Affordable Clean Appendix II Additional CPX Details 22
Slide 23: We are reliably delivering growth and contracting opportunities
We are reliably delivering growth and contracting opportunities 7.8 GW 1.36 GW 130 MW 19 facilities 10 facilities 3 facilities 63 turbines 540 turbines 350k panels 23
Slide 24: Our high-quality portfolio drives multiple sources of funding
Our high-quality portfolio drives multiple sources of funding 13% • Internally generated cash flows 20% 4% • Corporate and asset level debt • Hybrids and preferred shares 16% • Partnerships • Asset recycling 2% • Common equity 45% Internal Cash Flows Debt1 Hybrids 3 Partnerships Asset Sales4 Common
Slide 25: We deliver superior total shareholder returns and are well positioned to enhance returns
Total shareholder return (10-Year) Updated target range 12-14% We deliver superior ~6.0% ~12.5% total shareholder Historical target range 10-12% returns and are well positioned to ~6.5% enhance returns as we grow Price Compounded Total return appreciation dividend 1. Total shareholder return is comp
Slide 26: Capital investment screening criteria
Capital investment screening criteria 1 Attractive markets Ability to grow, aligned with our competitive advantages 2 Compelling risk-adjusted returns Sound contractual underpinning, exceeds return hurdle rates 3 Optimization and development potential Commercial and operational upside 4 Corporate im
Slide 27: Stable weighted average contract life
Stable weighted average contract life1 Dec 2019 – Whitla Aug 2020 – Decatur Jan 2022 – extended June 2023 - extended Future contracts: Wind begins Energy Center Arlington Valley Goreway and York Halkirk 2 Wind operations with contract extension to contract by 6 years to Energy contracts to Ontario B
Slide 28: Building balanced energy solutions
Building balanced energy solutions: York utility scale battery Goreway utility scale battery 114 MW 22 years 48 MW 22 years Net capacity Contracted cash flow Net capacity Contracted cash flow Maple Leaf Solar 73 MW 2026 25 years Net capacity Expected Contracted completion cashflow 28
Slide 29: Forward-looking information
Reliable Affordable Clean Forward-looking information Forward-looking information or statements included in this presentation are provided to inform our • electricity and other energy and carbon prices; shareholders and potential investors about management’s assessment of Capital Power’s future plan
Slide 30: Investor Relations
Reliable Affordable Clean Investor Relations Roy Arthur VP, Investor Relations capitalpower.com 1-403-736-3315 investor@capitalpower.com 30
Capital Power — Investor Presentation (September 2024) on 6ix