Slide 1: Investor Presentation May 2023
Investor Presentation May 2023
Slide 2: Disclaimer and Forward-Looking Statements
Disclaimer and Forward-Looking Statements This presentation includes "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 Securitie
Slide 3: Who We Are
Our Vision A in clean electricity – committed to a Our Strategy Our Values Customer Needs Safety Operational Excellence Innovation Who We Are People Sustainability Shareholder Value Respect Integrity A Customer-Centred 3
Slide 4: TransAlta's Core Businesses
TransAlta’s Core Businesses Merchant Thermal Energy Marketing Business Hydro Generation and Trading Development Diversified and reliable generation with world-class trading and business development teams 4
Slide 5: Fleet Overview
Fleet Overview Wind, Solar and Storage 29 Facilities Hydro 25 Facilities Natural Gas 17 Facilities Coal 1 Facility Technology Wind Solar Hydro Battery Natural gas Coal Wind Under Solar Under Battery Under Construction Construction Construction 5
Slide 6: TransAlta at a Glance
TransAlta at a Glance ~6,600 MW $9.1 billion Diversified Portfolio 111 Years 72 generating facilities in Canada, the United States and Australia Enterprise Value Generation Experience Strong balance sheet and The foundation of our capital discipline focused strategy $650 - $750 million 2023 expected
Slide 7: Strategic Priorities to 2025
Strategic Clean Electricity Growth Plan Priorities to 2025 1 Accelerate growth into customer-centred renewables and storage 2 Targeted approach to diversification 3 Maintain financial strength and capital allocation discipline 4 Define next generation of power solutions 5 Lead in ESG policy developm
Slide 8: Accelerating Renewables Growth 2021 to 2030
Accelerating Renewables Growth 2021 to 2030 2021 2025 2 GW $3.6 billion $315 million Of Renewables Of Growth CapEx New Annual EBITDA Growth 2025 2030 5 GW Of Growth Pipeline 2X Increase in Renewables Fleet 8
Slide 9: Our Clean Energy Evolution
Our Clean Energy Evolution EBITDA 2020 EBITDA 2025 1 30% 25% 35% 5% 24% 11% 70% Legend Renewables Energy Marketing Natural Gas Coal EBITDA attributable to renewables will reach by end of 2025 1 Post-Centralia retirement 9
Slide 10: 2023 Outlook
2023 Outlook Adjusted EBITDA 1 ($millions) FCF 1 ($millions) 2023 2023 Outlook Outlook $1,450 to $1,550 $650 to $750 $961 $1,634 $1,286 $585 $917 $348 2020 2021 2022 2023 Outlook 2020 2021 2022 2023 Outlook Continued strong cash flow generation 10 1 Adjusted EBITDA and FCF are non-IFRS measures. Cer
Slide 11: Clean Electricity Growth Plan Execution
Clean Electricity Growth Plan Execution Capital EBITDA MW Location PPA Term Customer COD ($millions) ($millions) North Carolina Solar 122 North Carolina US$99 11 years Duke US$9 In service Pembina and Garden Plain Wind 130 Hanna, AB $190 - $200 17 years1 investment-grade $14 - $15 H1 2023 customer N
Slide 12: Sustainability Target Highlights
Sustainability Target Highlights Environmental Governance Goals Goals • End coal generation by 2025 in US • Support Indigenous communities • 50% female representation on the Board by 2030 • Reduce GHG emissions by 75% • Maintain excellent safety • 40% female employment across from 2015 levels by 202
Slide 13: 2023 Performance
2023 Performance
Slide 14: Q1 2023 At A Glance
Q1 2023 At Transaction Achievements A Glance Q1 2023 Results and Strategic Financial Position Initiatives Adjusted EBITDA1 of Returned to of advanced stage development projects shareholders through NCIB FCF1 of or per share Entered into Added to renewables Operational availability of development pip
Slide 15: TransAlta Segmented Results
TransAlta Segmented Results 3 Months Ended March 31, 2023 ($millions) Q1 2023 Adjusted EBITDA1 Q1 2022 106 Hydro 61 88 Wind and Solar 89 240 Gas 105 54 Energy Transition 5 39 Energy Marketing 17 (24) Corporate (18) 503 Total 259 Strong performance across entire company 1 Adjusted EBITDA and FCF are
Slide 16: TransAlta Renewables Q1 2023 Highlights
TransAlta Renewables Q1 2023 Highlights 3 Months Ended March 31, 2023 Q1 2023 Q1 2022 128 Adjusted EBITDA1 139 71 CAFD1 90 0.27 CAFD per share1 0.34 0.23 Dividends per share 0.23 1 Adjusted EBITDA, CAFD, and CAFD per share are non-IFRS measures. Certain additional disclosure for these specified fina
Slide 17: 2023 Outlook Update
2023 Outlook Update Revised Outlook Previous Outlook as of Change from Previous ($ millions) Q1 2023 Q4 2022 Midpoint Adjusted EBITDA1 $1,450 to $1,550 $1,200 to $1,320 + 19% FCF1 $650 to $750 $560 to $660 + 15% Energy Marketing $130 to $150 $90 to $110 + 40% Gross Margin Power and Gas Prices Power
Slide 18: 2023 Outlook – TransAlta Renewables
2023 Outlook – TransAlta Renewables ($ millions) 2023 Outlook 2022 Adjusted EBITDA1 $495 to $535 $487 FCF1 $340 to $380 $347 CAFD1 $230 to $270 $243 Resilient Cash Flow Expectations 1 Adjusted EBITDA, CAFD, and CAFD per share are non-IFRS measures. Certain additional disclosure for these specified f
Slide 19: Development Pipeline
Development Pipeline Changes to Development Pipeline (MW) ~4.3 GW Currently in development in our 3 core geographies 1 Development pipeline expansion on track to meet 2025 target 19 1 Net of projects removed from pipeline in 2021.
Slide 20: Advanced-Stage Projects
Advanced-Stage Projects Target Estimated Spend EBITDA MW Location Type Completion ($millions) ($millions) Date Tempest 100 Warner County, AB Wind $210 – $230 $20 – $23 2025 SCE Capacity Expansion 94 Western Australia Gas AU$180 – AU$200 AU$24 – AU$28 2025 Battery WaterCharger 180 Cochrane, AB $195 –
Slide 21: 2023 In-year priorities
2023 In-year priorities
Slide 22: 2023 Priorities
2023 Priorities Safety, Reliability Strategic Initiatives and Availability Secure 500 MW of growth Accelerate CO2 emissions reduction to Achieve strong safety performance 75% from 2015 levels by 2026 Complete Garden Plain, Northern Achieve strong fleet availability of Goldfields Solar, White Rock, H
Slide 23: Update on Corporate Strategy
Update on Corporate Strategy TransAlta Corporation TransAlta Renewables Continuing supports TransAlta's Current rising interest rate environment and strategy of increasing shareholder value through increasingly competitive landscape makes pursing significant capital allocation to contracted accretiv
Slide 24: Optimizing and Maintaining Competitive Advantage in Alberta
Optimizing and Maintaining Competitive Advantage in Alberta
Slide 25: Alberta Business
Alberta Business Maximize shareholder returns through active management of our diversified merchant portfolio Provide dynamic, cost-effective and low carbon solutions to meet customer power demand and ESG goals Identify and evaluate market and technological sources for long-term growth Technology Wi
Slide 26: Customer Competition: Our Advantage
Customer Competition: Our Advantage Ancillary Service Leader 111–year extensive operating expertise Over 1,200 Trusted C&I MW Peaking Supplier Capacity Exceptional in-house forecasting and analytical capabilities Optimization Integrated asset optimization and operations Expertise to ensure portfolio
Slide 27: Alberta Merchant Market is Evolving
Alberta Merchant Market is Evolving • Load growth moderating • Significant supply additions • Strong customer demand for renewables and • ~8,500 MW of gas, wind and solar storage planned or under construction • Cost of carbon emissions increasing • ~2,500 MW of storage planned or • CCS/CCUS solution
Slide 28: Our Evolving Position in the Alberta Market
Our Evolving Position in the Alberta Market 2020 Reported 2025 With Growth 1 and Retirements 265 MW 10 MW 1,724 MW 1,250 MW 2,666 MW 1,967 MW 190 MW LEGEND: Renewables Battery Natural Gas Coal Well-positioned to perform in energy-only market 28 1Growth includes Windrise, Garden Plain, Riplinger, Sun
Slide 29: Alberta Electricity Portfolio
Alberta Electricity Portfolio Alberta Hedging 2023 BOY* 2024 2025 Q1 2023 Realized Prices Price $86 / MWh $80 / MWh $82 / MWh Energy Volume 4,768 GWh 4,192 GWh 2,349 GWh 182% 118% 110% Price $2.30 / GJ $2.55 / GJ - AB Hydro average AB Hydro average Gas average Natural real i z ed en ergy pri ce real
Slide 30: Alberta Hydro Exceeds Expectations
Alberta Hydro Exceeds Expectations Hydro Adjusted EBITDA 1 ($millions) Hydro Volumes (GWh) 900 120 800 100 700 Volume (GWh) 600 80 $ millions 500 60 400 300 40 200 20 100 - 0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2021 Q1 2022 Q1 2023 Ancillary Service Energy TA E
Slide 31: Accelerating Clean Growth Strategy
Accelerating Clean Growth Strategy
Slide 32: Our Investment Focus
Renewables and Storage • Expand core focus of onshore wind in North America with customer-centred greenfield development • Establish position in solar targeting the United States, Canada and Australia markets through acquisition • Establish position in storage, targeting Alberta to meet future grid
Slide 33: Our Competitive Advantage: Foundations for Growth
Our Competitive Advantage: Foundations for Growth ESG Strategy Extensive North American renewables fleet Highly Local Credible Presence Developer Broad full lifecycle development optimization and operational excellence Customer Robust balance sheet Focus Optimization Operational and Trading TransAlt
Slide 34: TAC Development Pipeline: Canada
TAC Development Pipeline: Canada Total All Stages: 2,062 MW – 2,912 MW COD Project MW Type Location Stage Range Garden Plain 130 Wind AB 2023 Tempest 100 Wind AB 2025 WaterCharger 180 Battery AB 2024 Riplinger 300 Wind AB 2026 Red Rock 100 Wind AB 2028 SunHills Solar 115 Solar AB 2025 McNeil Solar 5
Slide 35: TAC Development Pipeline: United States
TAC Development Pipeline: United States Total All Stages: 2,054 MW – 2,304 MW Project MW Type Location Stage COD Range White Rock West 100 Wind OK 2023 White Rock East 200 Wind OK 2023 Horizon Hill 200 Wind OK 2023 Prairie Violet 130 Wind IL 2027 Old Town 185 Wind IL 2025 Monument Road 152 Wind NE 2
Slide 36: RNW Development Pipeline
RNW Development Pipeline Total All Stages: 827 MW COD Project MW Type Location Stage Range Canada Willow Creek 1 70 Wind AB 2027 Willow Creek 2 70 Wind AB 2027 Canadian Battery 10 Battery NB 2025 United States Big Timber 50 Wind PA 2027 Trapper Valley 225 Wind WY 2028 Other US Wind Prospects 40 Wind
Slide 37: North Carolina Solar
Project Highlights Location North Carolina Contracted 100% Size 122 MW Customer Duke Energy Technology Solar PV Term 12 years COD November 5, 2021 EBITDA US$9 million Expected production of ~195,000 MWh per year 20 operating facilities across North Carolina ranging in size from 3.2 MW to 6.7 MW Long
Slide 38: Garden Plain
Project Highlights Location Hanna, Alberta Contracted 100% Size 130 MW Customer Pembina and Investment-grade Technology SiemensGamesa Term 17 years COD H1 2023 EBITDA $14-$15 million Turbine commissioning nearing completion Fully contracted Garden Plain Our wind facility in Alberta – majority of tur
Slide 39: Northern Goldfields
Project Highlights Location Western Australia Contracted 100% Size 48 MW Customer BHP Technology Solar PV & Battery Term 16 years COD H1 2023 EBITDA AU$9-$10 million Solar panel installation is complete and interconnection of the facility is underway Construction underway and on track to be complete
Slide 40: White Rock East and West
Project Highlights Location Caddo County, OK Contracted 100% Size 300 MW Customer Amazon Technology Vestas Term Long-term COD H2 2023 EBITDA US$48-$52 million Over half of the foundations have been completed. Turbine erection has commenced Provides a significant step towards 2 GW target Wind turbine
Slide 41: Horizon Hill
Project Highlights Location Logan County, OK Contracted 100% Size 200 MW Customer Meta Technology Vestas Term Long-term COD H2 2023 EBITDA US$30-$33 million All major equipment and EPC agreements executed Provides a significant step towards 2 GW target Wind turbine component deliveries complete and
Slide 42: Mt. Keith Transmission Expansion
Project Highlights Location Western Australia Contracted 100% Term 15 years Customer BHP COD H2 2023 EBITDA AU$6-$7 million Construction activities have commenced Facilitates the connection of additional generating capacity to our network On track to be completed on schedule Mt. Keith Transmission E
Slide 43: Enhancing Value with Energy Marketing
Enhancing Value with Energy Marketing
Slide 44: Energy Marketing Fulfils Key Roles
Energy Marketing Fulfils Key Roles Manages commodity Provides market Generates strong risk for owned assets insights for growth segment free cash flow 44
Slide 45: A Leading Trading Platform
A Leading Trading Platform WESTERN US EASTERN US AND ONTARIO NATURAL GAS EMISSIONS Northwest, CAISO, IESO, ISO-NE, NYISO, PJM, Markets Canada and US Canada and US Southwest, SPP and ERCOT MISO, Southeast and SPP Execution for TransAlta and Third- Party Assets Real Time Trading - Term Trading Congest
Slide 46: Significant EBITDA Contribution
Significant EBITDA Contribution EBITDA Contribution ($millions) • Marketing team positioned to deliver value in various market conditions and $183 is supported by product and market $166 diversification • Recent performance is among strongest $103 delivered since start of the business $89 • Tightly
Slide 47: Financial Strategy and Plan
Financial Strategy and Plan
Slide 48: Disciplined Capital Allocation
Disciplined Capital Allocation Factors Impacting Risk Premium Project Development Technology Economies of Scale Future Business Synergies Future Value Enhancement Operational Synergies Counterparty Quality • Tax Optimization • Operational and Platform Contract Tenor • Commercial Merchant Exposure •
Slide 49: Prudent Capital Allocation
Prudent Capital Allocation Deconsolidated FFO 1 5-Year Trend Improving performance provides increased allocation Amortizing Debt (6-8%) to: Preferred Dividends (8-10%) Common Dividends (10-15%) Growth Sustaining Capital (25-35%) Dividends Growth Capital Debt Reduction Share Buyback Share Buybacks (3
Slide 50: Growth Plan is Fully Funded
Growth Plan is Fully Funded Consolidated Sources and Uses 2021-2025 RNW Equity & Other Return to Shareholders3 RNW Dividend Adjusted FFO 1 Amortizing Debt Growth Capital Project Financing Net Cash 2 2022 Bond Refinance 2022 Bond Maturity Sources Uses 2 GW growth plan fully funded with cash flow and
Slide 51: Our Value Proposition
Diversified and Clean electricity Our resilient fleet leader with ESG focus Value Proposition 4.3+ GW Strong growth pipeline financial position
Slide 52: Questions and Answers
Questions and Answers Visit us at: www.transalta.com Investor_relations@transalta.com