Capital Power Corporation · TSX:CPX
Capital Power — Investor Presentation (November 2024)
25 slides from Capital Power's investor presentation, November 2024
Slide 1: Building the leading power producer in North America
Reliable Affordable Clean Building the leading power producer in North America November 2024
Slide 2: Capital Power is the 5th largest gas IPP in North America
Capital Power is the 5th ~15% largest gas IPP in North 10-year total shareholder return1 America and has a track record for growth and ~50% BBB- / decarbonization BBB (low) reduction in emission intensity Investment grade credit rating 4x increase total (S&P, DBRS) capacity ~50% / ~50% $6 B U.S. / C
Slide 3: Three core lines of business create balanced energy solutions
Three core lines of business allow us to create balanced energy solutions for our customers Flexible Generation Renewables Trading & Origination • Critical, dispatchable supply • Affordable and clean • Actively trade in North American • Reliable and affordable • Carbon market opportunities power, ga
Slide 4: Power Industry Fundamentals
Reliable Affordable Clean Power Industry Fundamentals Unprecedented Demand Outlook 4
Slide 5: North American power demand growth is multi-faceted
North American Annual energy consumption from electricity in North America (QBTU1) power demand growth 90 is multi-faceted: 80 78 70 Data centers 60 Nearshoring 51 50 EVs (retail and commercial) 40 38 Industrial electrification 30 20 10 0 2025 2035 2050 1. Quadrillion British Thermal Units Source: E
Slide 6: Data center demand growth is also multi-faceted
Data center demand growth From 2.5% to 6-7.5% is also multi-faceted: Data centre share of U.S. electricity consumption Data centre electricity consumption in the U.S., TWh (2022-30) Cloud computing 2.5x 3.1x Streaming services 390 Mobile applications 320 Financial transactions 126 Artificial intelli
Slide 7: Power demand growth increases the value of firm power supply
Energy transition Energy expansion Power demand growth increases the value of firm power supply Unmet firm power demand Today 7
Slide 8: Strong natural gas fundamentals
Strong natural gas fundamentals Increasing power demand drives the need for thermal generation U.S. natural gas combined cycle Generation (TWh)(1) Capacity factor (%)(1) 1,482 57% 53% 1,241 2018 2023 2018 2023 1. SNL (S&P Capital IQ), U.S. combined cycle units 8
Slide 9: Capital Power Update
Reliable Affordable Clean Capital Power Update Positioned to succeed amid energy expansion 9
Slide 10: Strong case for re-contracting existing thermal assets
There is a strong case CPX U.S. flexible generation capacity factor1 for re-contracting our existing thermal assets 60% 53% 50% 45% 40% 37% 31% 30% 20% 10% 0% 2021 2022 2023 2024 YTD 1. Historical capacity factors have been re-baselined to include U.S. acquisitions. 10
Slide 11: Disciplined approach to capital allocation
Equity hurdle rates We have a Flexible Generation 12-14% 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% 11
Slide 12: Flexible Generation Project Portfolio Update
Flexible Generation Project Portfolio Update ~ 850 2024 – 2026 Completion Timeline MW 6 Total net incremental generation capacity Projects Alberta & Ontario 170 500 175 ~ ~ ~ MW MW MW BESS capacity Repower capacity Uprate / expansion capacity 12
Slide 13: Renewables Project Portfolio Update
Renewables Project Portfolio Update 305 ~ 2024 – 2027 Completion Timeline MW 4 Total net incremental generation capacity Projects Alberta & North Carolina 125 180 ~ ~ MW MW Wind Capacity Solar Capacity 13
Slide 14: Superior data center value proposition
Superior data center value proposition; speed to market with confidence Existing reliable generation 14 flexible generation sites with ~7.8 GW of capacity Top tier land position with expansion potential ~18,000 acres of developable land In-house operational capabilities Dedicated and highly trained
Slide 15: Best positioned to lead the North American energy expansion
Capital Power is best positioned to lead the North American energy expansion Strong Unprecedented Market-ready foundation opportunity strategy Superior fleet and Power demand will Flexible generation operational capability double by 2050 enables reliability and growth of Access to capital Value of r
Slide 16: Appendix I: Power Industry Fundamentals
Reliable Affordable Clean Appendix I Power Industry Fundamentals 16
Slide 17: 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) 17
Slide 18: Intermittent nature of solar and wind requires Flexible Generation
Firm supply or storage required Power profile (MW) Solar output 40,000 Intermittent nature Electricity 20,000 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) 5,000 maintain reliability 2,500 Sol
Slide 19: Appendix II: Additional CPX Details
Reliable Affordable Clean Appendix II Additional CPX Details 19
Slide 20: 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 20
Slide 21: High-quality portfolio drives multiple sources of funding
Our high-quality portfolio drives multiple sources of funding Internally generated cash flows 13% 20% Corporate and asset level debt 4% Hybrids and preferred shares 16% Partnerships Asset recycling 2% Common equity 45% Internal Cash Flows Debt1 Hybrids 3 Partnerships Asset Sales4 Common Equity 2 1.
Slide 22: 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 23: Committed to growing dividend per share
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 24: Forward-looking information
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 plans and • performance; opera
Slide 25: Investor Relations
Investor Relations Roy Arthur VP, Investor Relations 1-403-736-3315 | investor@capitalpower.com capitalpower.com 25
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