Capital Power Corporation · TSX:CPX
Capital Power — Investor Day (December 2021)
112 slides from Capital Power's investor day presentation, Dec 2, 2021
Slide 1: Investor Day 2021
Investor Day 2021 Powering a sustainable future for people and planet December 2, 2021 1
Slide 2: Forward-looking information
Forward-looking information Cautionary statement Certain information in today’s presentations and in responses to questions contains forward-looking information. Actual results could differ materially from conclusions, forecasts or projections in the forward-looking information, and certain material
Slide 3: Executive Leadership Team
Executive Leadership Team Brian Sandra Kate Bryan Chris Jacquie Steve Vaasjo Haskins Chisholm DeNeve Kopecky Pylypiuk Owens President and SVP, Finance SVP, Planning, SVP, Operations SVP, Chief Legal, SVP, People, SVP, Construction Chief Executive and Chief Stakeholder Development and Culture and and
Slide 4: Agenda
Agenda Introduction Optimizing operations to Randy Mah / Director, Investor Relations deliver long term value Bryan DeNeve / SVP, Operations Increasing our velocity Brian Vaasjo / President & CEO Building on success Steve Owens / SVP, Construction Powering a sustainable future and Engineering for pe
Slide 5: Increasing our velocity
Increasing our velocity • Resilient strategy • Optimizing our operations • Investing in innovation Brian Vaasjo President & CEO 5
Slide 6: Our strategy – driving to the future
Our strategy – driving to the future To develop, acquire and optimize renewable power We create value generation assets through resiliency, • Wind optimization • Solar and innovation • Storage To acquire and/or optimize natural gas assets • Well positioned in their respective markets • Over time re
Slide 7: Renewable and storage acceleration
Renewable and storage acceleration Whitla Wind Phases Halkirk Wind Phase 2 Secured 1,298 MW of U.S. solar 2 and 3 completed commencing sites with battery potential Strathmore and Enchant North Carolina solar projects Long-term contracting of renewables Solar projects underway commencing construction
Slide 8: Natural gas assets
Natural gas assets Recontracting Decatur Island Generation Arlington Goreway Extended enhanced Recontracting Island With developments in Developments in Decatur contract by Generation in progress Arizona, confident Ontario very positive 10 years to 2032 in recontracting for recontracting Arlington V
Slide 9: Thriving in the Alberta market
Thriving in the Alberta market Alberta power market back to historical fundamentals post Balancing Pool PPAs Genesee 1 and 2 repowering very well positioned • Optimized and enhanced with 210 MW battery addition CCS studies and development going very well • Enbridge CO2 hub fits our project very well
Slide 10: Growth in adjusted EBITDA and AFFO per share
Growth in adjusted EBITDA and AFFO per share ($M) Adjusted EBITDA AFFO per share 1200 $6.00 We create value through resiliency, 1000 $5.00 optimization and innovation 800 $4.00 600 $3.00 400 $2.00 200 $1.00 0 $0.00 2016 2017 2018 2019 2020 2021E 2016 2017 2018 2019 2020 2021E 10
Slide 11: Our Corporate Purpose
Our Corporate Purpose To power a sustainable future for people and planet 11
Slide 12: Vision Mission Values
Vision Mission Electrifying the world reliably and affordably Implementing and operating innovative while protecting the planet for future generations energy solutions Values • We manage our impact on the environment to leave a healthy planet. • We value equity, diversity and inclusion, listen with
Slide 13: Our commitments
Our commitments To be carbon Greater To implement a To implement neutral by 2050 diversity water management a supply chain strategy strategy • Reduce our carbon • Targeting 30% of new intensity per MWh by hires be women in • Focused on • Committed to “Solar 65% by 2030 2022 optimization and risk Ind
Slide 14: Stable outlook supports dividend growth
Stable outlook supports dividend growth Cash flow from long term contracts remains Partially de-risked medium term strong through the decade We create value • Hedging Alberta power position through resiliency, Strong balance sheet • Have carbon credits to cover optimization Robust Alberta market req
Slide 15: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet • Environmental responsibility • Reliability • Affordability Kate Chisholm Senior Vice President, Planning, Stakeholder Relations and Chief Sustainability Officer 15
Slide 16: Our Corporate Purpose
Our Corporate Purpose To power a sustainable future for people and planet 16
Slide 17: Climate change in Canada
Climate change in Canada Governments are taking action globally – faster than ever before 17
Slide 18: Advancing our technology strategy
Advancing our technology strategy Planning & Implementation & Optimization & development execution innovation 18
Slide 19: Natural Gas: necessary long-term role in power
Natural Gas: necessary long-term role in power • Natural gas essential to maintain system reliability and integrate renewables • Decarbonization will be essential to long term resiliency • Role of natural gas will transition from serving baseload energy requirements to serving capacity • Responsible
Slide 20: Electricity generation by fuel type and share of coal in STEPS
Electricity generation by fuel type and share of coal in STEPS(1) Advanced economies Emerging market and developing economies 30 60% Thousand TWh 20 40% 10 20% 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 Coal Oil Natural gas Nuclear Renewables Share of coal (right axis) Emerging market and dev
Slide 21: Our major carbon capture initiatives
Our major carbon capture initiatives Participated with Canadian Clean Power Coalition (CCPC) studies on carbon capture options Confidential project for hydrogen/power production from coal feed stock with carbon capture Design, engineering and cost estimate for Genesee 4; 200 MW coal-fired power plan
Slide 22: 2030 versus 2050
2030 versus 2050 Annual CO2 emissions savings in the net zero pathway, relative to 2020 2030 2050 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Behaviour changes Technologies in the market Technologies under development Source: Net Zero by 2050, International Energy Agency @ p.16 22
Slide 23: Our contribution to Alberta's share of Canada's targets
Our contribution to Alberta’s share of Canada’s targets Alberta electricity sector emissions (megatonnes) 31 11 7.5 3.5 9 2019 Retirements, Mothballs & Growth Genesee Repowering & CCS Other Emissions Reductions 2030 Target* We'll deliver ~70% of the remaining targeted emissions reductions in the Alb
Slide 24: Priority of emissions reductions
Priority of emissions reductions Pre-2030 Post-2030 Optimization to improve efficiency & Broad decarbonization of natural gas Core technologies reduce emissions; select deployment & storage to reduce intermittency of of decarbonization technologies renewables Direct physical reductions Genesee CCS E
Slide 25: Our (R)Evolution
Our (R)Evolution 2009–Today Today–2024 2024–2030 2030–2050 2050–2070 • Genesee efficiency • Complete repowering • Genesee CCS • Net carbon neutral • Physical program - 12% and off coal project via physical decarbonization decrease in GHG by • Genesee Battery • Expand CCU solutions on natural 2021 En
Slide 26: Accelerating social and governance initiatives
Accelerating social and governance initiatives Working together, turning ambition into action • Diversity, Equity and Inclusion - Increased leadership and workforce diversity - Committed to "Equal by 30" and "30 by 30“ - Inclusive and equitable programs that foster an inclusive workplace culture • D
Slide 27: Putting our money where our mouths are
Putting our money where our mouths are Incentive pay linked to delivering on ESG targets • 2022 Executive short-term objectives include 25% ESG elements - HSE Index - Implement sustainable sourcing and water management plans - Employee retention - Diversity of external candidate pool - 30% new hires
Slide 28: Our disclosure strategy
Our disclosure strategy We're among the leaders in Canada adopting integrated annual reporting Integrated Annual Alignment with CDP Climate Change Rating Agencies Reporting Reporting and Water Frameworks Disclosures Transparency in reporting Aligning our integrated Continued commitment to the Increa
Slide 29: On track to meet our sustainability targets
On track to meet our sustainability targets Sustainability Targets Progress Achieve net carbon neutral by 2050 On track Construct all new natural gas generation units to be carbon capture and/or On track hydrogen-ready Reduce CO2 emissions at Genesee by 50% by 2030 from 2005 levels Ahead of schedule
Slide 30: Sustainability in action
Sustainability in action Helping customers meet their needs today without impacting future generations Helping the world reach net zero by 2050, reducing our environmental E footprint (including in our supply chain), using water responsibly Keeping electricity reliable and affordable, increasing div
Slide 31: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet Responsibly Reliably Affordably Implementing and operating Electrifying the world reliably so the Keeping electricity accessible and innovative energy solutions to protect power system has the resilience to affordable today and tomorrow the planet
Slide 32: Delivering reliable growth
Delivering reliable growth • Decarbonization is an immense opportunity for gas and renewables technologies • Our growth pipeline is robust • We are the market leader in Alberta Chris Kopecky Senior Vice President, Chief Legal, Development and Commercial Officer 32
Slide 33: Our growth pillars
Innovative portfolio Our growth pillars optimization Successfully recontracting and securing new PPAs We’re able to pull various levers at correct times • Target $500M/year capital commitment on Transparent growth average pipeline • Stay disciplined and opportunistic A mix of technologies and • Achi
Slide 34: The immense opportunity
The immense opportunity 4 GW 234 GW 19 of coal capacity still needs to GW 22 64 be addressed in North America GW GW 50 8 GW GW 14 53 GW GW 34
Slide 35: The size of the prize
The size of the prize 95 GW EIA forecast for coal generation removed from the U.S. system by 2030 115 GW solar 240 GW EIA forecast for gas, wind and solar built in the U.S. by 2030 10 GW 65 GW wind EIA forecast for large-scale battery storage installations in the U.S. from 2021-2023 59 GW gas Source
Slide 36: Our path to success
Our path to success Investing in emissions Building and acquiring Integration of free renewables facilities in Canada and the storage technologies U.S. Reduce emissions profile Investing in critical Acquiring key facilities through carbon utilization natural gas generation in Canada and the U.S. and
Slide 37: Where our adjusted EBITDA growth has come from since 2012
Where our adjusted EBITDA growth has come from since 2012 800 700 600 43% 500 57% $M 400 300 Natural Gas Renewables 200 100 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E Natural Gas Renewables 37
Slide 38: Growth in renewables
Growth in renewables Increasing carbon free generation to reach net carbon neutral by 2050 Halkirk Whitla Strathmore Enchant Bear Hornet Hunter’s Wind Wind Solar Solar Branch Solar Cove Solar (Phase 2) (Phase 2 & 3) Solar 151 MW 151 MW 40.5 MW 75 MW 35 MW 75 MW 50 MW Contracting 15 Year 25 Year 15 Y
Slide 39: Halkirk Wind – Phase 2 Taking advantage of new technology
Halkirk Wind – Phase 2 Taking advantage of new technology 151 MW Project 4-5 MW machines $274 M Capex 39
Slide 40: Solar sites acquisition
Solar sites acquisition Total: 1,298 MW Total Battery Storage: 1,440 MWh United States Location Project MW Storage (MWh) AR Fairview 100 200 FL Ironwood 340 GA Horse Creek 30 GA Garretta 19.5 IL East Donica Creek 60 120 IL Macomb 15 IL Kepple Creek 100 200 IL Greathouse Creek 85 170 IN Greencastle 1
Slide 41: Growth pipeline: 3,800 MW generation + 3,350 MWh storage
Growth pipeline: 3,800 MW generation + 3,350 MWh storage 900 MW wind 2,100 MW solar 800 295MW MW gas 3,350 MWh battery storage Wind Solar Gas Battery Storage 41
Slide 42: Midlife gas acquisition strategy
Midlife gas acquisition strategy Enhanced value through operational expertise Acquire midlife gas Enhance value Re-contract Leverage site Creative and Significant brownfield Accretive & contracted Upgrade customized solutions advantages Optimize through Advantaged location Actively market Long-term
Slide 43: Decatur: midlife gas strategy confirmed
Decatur: midlife gas strategy confirmed Acquire Acquired in 2017 midlife gas 3 combustion turbines Enhance upgraded adding 90MW value Increased efficiency and lowered heat rate Re-contract 10-year contract renewal through 2032 43
Slide 44: Arlington Valley: a desert oasis
Arlington Valley: a desert oasis 12% Population growth in Phoenix over last 10 years 3,500 MW Coal retirements by 2032 120 MWh Battery potential on site 60 MW Solar potential on site More bullish on recontracting than when we acquired it 44
Slide 45: Ontario gas fleet: vital reliability and flexibility
Ontario gas fleet: vital reliability and flexibility $27 Billion 30%+ Cost to taxpayers to Percentage of operating replace gas by 2030 reserve market provided by our fleet 10 GW Capacity deficit in 2030 Well situated without existing contracted generators facilities 210 MW / 840 MWh York 456 MW | +1
Slide 46: Island Generation: Keeping Vancouver Island's lights on
Island Generation: Keeping Vancouver Island’s lights on 250,000 100% Transmission Transmission 2019 drought 90% 2021 heat issues 200,000 issues 80% wave Annual Capacity Factor [%] 70% Grid Generation MWh 150,000 60% reliability BC Hydro 50% outages 100,000 40% 30% 50,000 20% 10% 0 0% Nov 2018 Feb 20
Slide 47: Undisputed leader in Alberta
3.4M tonnes of carbon reduction at Undisputed leader in Alberta Genesee 2024+ 2,640 MW of Alberta generation capacity growing to ~3,500 MW 3 long-term renewable PPAs Captured price 15% $3B+ committed in above market since Alberta between inception 2015-2024 47
Slide 48: A trusted supplier in Alberta
A trusted supplier in Alberta Expanding energy marketing and origination presence MW contracted with AB customers 500 • Creates long-term contractual 400 arrangements with 300 creditworthy customers 200 • Supports stability of cashflows • Backs renewables growth 100 • Provides market intelligence, -
Slide 49: Alberta power market
Alberta power market Positive signs of demand recovery • Largest 2020 vs. 2019 yoy decline in Alberta internal load (30-day rolling average) power demand was 7.2% due to (MWh) 11,000 COVID-19 pandemic and low crude 2019 2020 oil prices 10,500 2021 2.0% • Demand started to recover as the 12.1% increa
Slide 50: Alberta power market
Alberta power market Need for reliable, flexible natural gas capacity AESO capacity by technology • Today there is still 4,666MW of inefficient coal, converted coal, or dual fuel capacity 7% 5% • Peak winter and summer load hours in 2021 saw ~85% of load being met with coal and 12% gas 48% • Peak wi
Slide 51: Strong repowering economics
Strong repowering economics Retired Capacity Least Asset (MW) Competitive Battle River 3 149 Sundance 1 280 Sundance 2 280 Sundance 3 368 Sundance 5* 406 Most Competitive *Suspended 51
Slide 52: Strong repowering economics
Strong repowering economics Retired Capacity Least Asset (MW) Competitive Battle River 3 149 Sundance 1 280 Sundance 2 280 Sundance 3 368 Sundance 5* 406 Sundance 4 406 Keephills 1 395 Most Competitive *Suspended 52
Slide 53: Strong repowering economics
Strong repowering economics Retired Capacity Least Asset (MW) Competitive Battle River 3 149 Sundance 1 280 Sundance 2 280 Sundance 3 368 Sundance 5* 406 Sundance 4 406 Keephills 1 395 Sundance 6** 401 Battle River 4** 155 Battle River 5** 385 Sheerness 1** 400 Sheerness 2** 400 Most *Suspended Comp
Slide 54: Alberta TIER program
Alberta TIER(1) program Significantly reducing carbon emissions AB electricity sector emissions (MT)(2) • TIER program driving down carbon emissions in a meaningful way 60 Avoided • Alberta government is supportive 47.7 Emissions of TIER program 50 Current TIER @ • Carbon prices per tonne will rise
Slide 55: Genesee Energy Centre: The heart of Alberta's decarbonized future
Genesee Energy Centre: The heart of Alberta’s decarbonized future Repowering Solar CCUS Fly ash Hydrogen Behind the fence Batteries Technology hub Proximity to Bulk electrical Natural gas Human Trunkline & transmission industrial capital storage 5,000 acres supply Heartland 55
Slide 56: Final configuration of Genesee 1 and 2 repowering
Final configuration of Genesee 1 and 2 repowering Issue • Most severe single contingency (MSSC) limit Solution Continues • Installing a 210MW / 210MWh battery to be the • Revised capex of $1.19B best-in-class natural gas Result combined cycle technology with • Levered returns remain strong at 20%+ 6
Slide 57: Net zero plans make CCUS a necessity
Net zero plans make CCUS a necessity Large-scale CCUS projects* 1970-1999 COD 2000-2009 COD 2010-2019 COD 2020+ COD * Source: Global CCS Institute 57
Slide 58: New CCUS business models have emerged
New CCUS business models have emerged Industrial hub model • Shared CO2 infrastructure • Economies of scale • Reduced commercial risks Alberta carbon hub • Enabling carbon transportation and storage networks • Jointly evaluate and advance a CCS project with Enbridge • Develop an open access carbon h
Slide 59: The CCUS investment environment has improved
The CCUS investment environment has improved Federal • 2021 Budget announced intent for investment tax credit, earmarking $15 billion • Committed $319 million to improve commercial viability • Canada Infrastructure Bank $10 billion growth plan Provincial • Committed $1.24 billion for two projects •
Slide 60: Initial CCS activities
Initial CCS activities Genesee • Pre-FEED almost complete • FEED study in 2022 • $1.8 - $2.0 billion capex Shepard • Investigating CCS potential 60
Slide 61: Genesee Energy Centre
Genesee Energy Centre The heart of Alberta’s decarbonized future 61
Slide 62: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet Growth Expertise Decarbonization ~4,000 MW transparent growth Long history of operational, We are leading the charge, pipeline with history of commercial and development providing innovative execution expertise solutions 62
Slide 63: Optimizing operations to create long term value
Optimizing operations to create long term value • Operational excellence • Resiliency • Optimization and innovation Bryan DeNeve Senior Vice President, Operations 63
Slide 64: Operational facilities
Operational facilities 6,600 megawatts 25 facilities 93% plant availability In Operation Wind Solar Battery Gas Coal Waste Heat Landfill Gas 64
Slide 65: Resiliency through COVID-19
Resiliency through COVID-19 • Continued deployment of the pandemic plan first activated in March 2020 • Deployed rapid antigen screening at strategic generating sites in Alberta, Alabama and Arizona • Conducted monthly inspections at all sites to ensure adherence to COVID-19 protocols • Announced Va
Slide 66: Net effect of Genesee 2 outage
Net effect of Genesee 2 outage • Accelerated LP Turbine upgrade project previously planned for 2023 • Insurance coverage confirmed for the failure • Rebuilding failed Genesee 2 stator core with upgraded components for installation in Genesee 1 66
Slide 67: Plant availability
Plant availability • Fleet availability has averaged over 93% for 2019-2021 • 2022 target availability has been set at 93% • Maintenance and improvements continue under COVID-19 - Completed planned outages at 7 thermal facilities and at 10 renewables facilities - Successful completion of these plann
Slide 68: Reduction in operating expenses
Reduction in operating expenses • Target O&M costs for 2022 are $20M lower than the 2021 Budget $M 68
Slide 69: Capital program
Capital program $120 $100 Average $89 $80 $60 $40 $20 $- 2021T 2022T 2023T 2024T 2025T Sustaining and Shutdown Capital Average 2021 includes insurance proceeds for Genesee 2 outage 69
Slide 70: Operation excellence in renewables
Operation excellence in renewables Wind fleet Seeing improved results • Renewables Operations Centre • 2020 Vestas Long Term Service Agreement • Blade repair program • Drone inspections 70
Slide 71: Weather resiliency
Weather resiliency • Cold weather standard for Buckthorn required by December 1, 2021 by the Public Utility Commission of Texas • Expect our response will form the basis for the larger NERC Cold Weather Standard for the remainder of renewables fleet • Working to ensure facilities meet new NERC Cold
Slide 72: Advancing water management
Advancing water management • Enhance measurement and monitoring in our operations • Better manage risks and capture opportunities of water resources • Proactive management Stewardship and Decision-making Transparency and optimization accountability • Establishing consistent • Expanding the considera
Slide 73: Advancing sustainable sourcing
Advancing sustainable sourcing • Increase the long-term resiliency and transparency of our supply chain • Consider social and environmental impacts when sourcing goods and services Environmental Social Governance • Respecting human rights • Increasing supply chain • Decreasing our environmental tran
Slide 74: Ops2030
Ops2030 Leveraging digitalization, technology and other innovations that will transform our fleet to integrated, autonomous, sustainable power generation facilities of the future Integrated Increase data digitalization, availability and connectivity to enable information-based decisions and big data
Slide 75: Ops2030
Ops2030 Accelerating our investments to achieve $50M EBITDA by 2030 Integrated • Advanced Pattern Recognition • WindFAST • Data historian modernization Autonomous • Generator health program • Remote operations • Remote digital worker • Mobility in operator rounds • Drones Sustainable • Water treatme
Slide 76: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet Resiliency Optimization Innovation Proactively investing in our people, Relentlessly striving for continuous Outside the box creativity technology and processes to evolve, improvement and operational and solutions adapt and deliver results excellen
Slide 77: Building on success
Building on success • $1.9B capital investment • Project success through partnership • Committed to further carbon reduction Steve Owens Senior Vice President, Construction and Engineering 77
Slide 78: Genesee units 1 and 2 repowering
Genesee units 1 and 2 repowering [ Replace with • Progressing on time and on-budget appropriate image] - Civil works on schedule We create value through resiliency, - Major procurement activities 84% complete optimization On Time and innovation - CT 1 and 2 shipped ex-works - scheduled on site early
Slide 79: Genesee units 1 and 2 repowering
Genesee units 1 and 2 repowering Construction Simple Cycle Combined Cycle G1 2021 2022 2023 2024 2025 G2 Construction Simple Cycle Combined Cycle 79
Slide 80: Genesee Battery Energy Storage System
Genesee Battery Energy Storage System 210 MW Battery (1hr discharge) • Proven lithium-ion technology We create value through resiliency, • 50-60 battery containers optimization • ~3 football fields in size and innovation • Full 210 MW instantaneous discharge • Largest BESS facility in Canada • Conne
Slide 81: Whitla Wind Phases 2 and 3
Whitla Wind Phases 2 and 3 • Achieved COD on December 1, 2021 - Well ahead of original schedule of December 31, We create 2021 value and under budget through resiliency, optimization • Extensive stakeholder consultation and engagementand innovation throughout planning and construction • Timely procu
Slide 82: Strathmore and Enchant Solar
Strathmore and Enchant Solar • Strathmore COD forecast extended to March 15, 2022; PV module shipments are delayed due to compounding impacts of We international create value shipping backlog and B.C. flooding through resiliency, optimization • Enchant COD December 9, 2022 and innovation • Forecasti
Slide 83: North Carolina Solar
North Carolina Solar • Project consists of three separate sites: - Hornet 75 MW We create value through resiliency, - Hunter’s Cove 50 MW optimization - Bear Branch 35 MW and innovation • Site works in 2022 to optimize pile design program to maximize design efficiencies • Procurement of PV modules a
Slide 84: Beneficial approach to contracting
Beneficial approach to contracting Senior level Collaborative Mutually Cross- relationships approach beneficial functional with based on trust management solution- contractors and respect strategy finding for design and supply challenges Building strategic, long-term partnerships to achieve favorabl
Slide 85: Halkirk Wind Phase 2
Halkirk Wind Phase 2 • 151 MW wind project • Paintearth County – north of Halkirk Wind • Schedule: - AUC Amendment filing June 2022 - Construction Q3 2023 - COD Q4 2024 Project timing will benefit from normalized commodity and shipping costs [ Replace with appropriate icon block from pg 2 ] 85
Slide 86: Innovation in action
Innovation in action Target: achieve net carbon neutrality by 2050 Genesee 1 and 2 emissions intensity pathway Scope 1 emissions CO2 Intensity - t/MWhr 65% 1.00 reduction in 0.90 emission 0.80 intensity by Most 2030 0.70 efficient sub 0.60 critical Most PCGS* efficient 0.50 in North NGCC in 0.40 Ame
Slide 87: Applying proven technology for decarbonization
Applying proven technology for decarbonization • Focused on proven amine-based capture technology • Genesee would be only large baseload, dispatchable low-carbon energy on the grid • No new transmission • High efficiency turbines ensure excellent merit order positioning, high CCS capacity factor • S
Slide 88: Genesee units 1 and 2 Repowering and CCS
Genesee units 1 and 2 Repowering and CCS 88
Slide 89: CCS path forward
CCS path forward 2021 2022 2023 2024 2025 2026 2027 2021 Feasibility Study / Pre-FEED 2022 FEED Study 2022 to 2025 Regulatory / Environmental / Detailed Engineering 2024 to 2026 Construction / Commissioning 2026 COD Current Focus: Pre-FEED capex estimating, FEED planning 89
Slide 90: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet Competitive Responsible Innovative Through consistently meeting By developing environmentally Through proven formula of project budgets and timelines friendly assets in support of strategic partnerships and a decarbonized future collaborative contr
Slide 91: Funding a low carbon future
Funding a low carbon future • Deploying capital to advance progress towards our sustainability targets • Resilient cashflows supported by risk mitigation strategies deliver extension of dividend growth • Targeting 10-12% total shareholder return over the long term Sandra Haskins Senior Vice Presiden
Slide 92: Delivering shareholder value through all phases of the cycle
Delivering shareholder value through all phases of the cycle Competitive positioning and risk mitigation in Solid track record of growth the robust Alberta power market • Genesee units will be the most efficient • Completed phase 2 and 3 of Whitla Wind natural gas units in Canada, solidifying • Proc
Slide 93: Overview of financial strategy
Overview of financial strategy Maintain Funding a low Maintain Deliver annual financial stability carbon future investment grade dividend growth and strength • Cost-effective credit rating • Dividend stability • Strong liquidity funding of growth • Access to capital through contracted markets throug
Slide 94: Dividend growth outlook
Dividend growth outlook Annualized dividend per share (1,2) 5% increase per year ~7% CAGR $2.19 $1.26 42% 50% 45% 45% 35% 40% ~40% Average payout of ~46% payout 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E Forecast to be within AFFO payout ratio target range of 45% to 55% thr
Slide 95: 5-year growth in key financial metrics
5-year growth in key financial metrics ~11% CAGR in AFFO from 2017 to 2022 $M Adjusted EBITDA 1200 AFFO $6.00 • 2022 includes EBITDA 1100 AFFO/share $5.00 contributions of $40M from 1000 900 new assets (Whitla Wind $4.00 800 and Strathmore Solar) 700 $3.00 • 2022 excludes financial 600 500 $2.00 con
Slide 96: 2022 adjusted EBITDA compared to 2021 guidance
2022 adjusted EBITDA compared to 2021 guidance $M 2021E1 2021T1 New assets AB Commercial Advancement of Other 2022T emerging technologies 1) 2021E represents the midpoint of the original guidance range of $975M to $1,025M. 2021T represents the midpoint of the revised guidance range of $1,090M to $1,
Slide 97: 2022 AFFO compared to 2021 guidance
2022 AFFO compared to 2021 guidance $M 2021E1 2021T1 Adjusted EBITDA Current tax Capex Financing Line Loss Other 2022T costs proceeding 1) 2021E represents the midpoint of the original guidance range of $500M to $550M. 2021T represents midpoint of the revised guidance range of $570M to $620M. 97
Slide 98: Portfolio optimization
Portfolio optimization AB commercial portfolio positions (All data as of Nov 24/21) 2022 2023 2024 Power % of power position sold forward(1) 64% 41% 26% Contracted power prices(2) ($/MWh) High-$60s High-$50s Mid-$50s Forward power prices ($/MWh) $92 $72 $61 EBITDA sensitivity to a $5/MWh change in s
Slide 99: Managing Alberta carbon exposure
Managing Alberta carbon exposure $/tonne $M $250 $100 CPC Alberta Emissions Expense1 Carbon Offset Savings Carbon Price 2 $200 69 $80 $150 $60 40 $100 $40 164 116 $50 $20 4 3 24 17 $0 $0 2022E 2023E 2024E 2025E Physically reducing emissions supplemented with low-cost offsets protect and enhance asse
Slide 100: Cash flow and financing outlook
Cash flow and financing outlook Strong cash flows to fund growth in 2022 Debt repayments $80 M(3) Net hybrid instrument $200 M(2) $805 M Common dividends $260 M $805 M (1) AFFO $605 M(1) Committed growth/ enhancement capex $465 M (3) Expected Sources Expected Uses 1) AFFO is a non-GAAP financial mea
Slide 101: Executing on ~$1.5 billion of growth capex
Executing on ~$1.5 billion of growth capex Proceeding with phase 2 of Halkirk Wind and Genesee battery storage $M $700 $600 $178 $500 $18 $49 $38 $400 $45 $101 $236 $300 $200 $379 $312 $150 $100 $53 - 2022E 2023E 2024E Genesee 1&2 Repower Genesee battery storage 1 Alberta renewable assets 2 Halkirk
Slide 102: Financial stability and strength
Financial stability and strength Strong balance sheet and commitment to investment grade credit ratings S&P financial metrics Agency Ratings Outlook Adj. FFO/Debt(1-3) Adj. Debt/EBITDA(1-3) 20% 5.0 Maximum S&P BBB- / P-3 Stable Minimum range threshold 4.0 15% DBRS BBB(low) / Pfd-3 (low) Stable 3.0 1
Slide 103: Debt maturity profile
Debt maturity profile(1) Well spread-out debt maturities supported by long asset lives • Longer term debt reflects increased confidence in our business profile • Strong liquidity from cash flow from operations, cash-on-hand, and credit facilities 600 500 USD 65 400 $160 $M 300 $450 200 $350 $300 $27
Slide 104: Powering a sustainable future for people and planet
Powering a sustainable future for people and planet Evolving Well positioned Responsible Significant deployment of capital Preserving strong position Maintain strong balance sheet to on renewables and Genesee in Alberta power market with support investment grade credit repowering Genesee repowering
Slide 105: Capital Power Value Proposition
Capital Power Value Proposition A responsible, sustainability-focused and attractive investment Brian Vaasjo President & CEO 105
Slide 106: 2022 targets
2022 targets Sustaining capex ($M) Adjusted EBITDA ($M) $80 to $90 $105 to $115 $975 to $1,025 $1,090 to $1,140 $1,110 to $1,160 2021 Target 2022 Target Original 2021 Target Revised Guidance 2022 Target Facility availability AFFO ($M) $500 to $550 $570 to $620 $580 to $630 93% 93% 2021 Target 2022 T
Slide 107: Growth targets
Growth targets • Continued progress on renewable projects Budget ($M) Target COD Strathmore Solar (AB) Updated to $57 Early 2022 Enchant Solar (AB) Updated to $119 Q4/22 Hornet Solar (North Carolina) $118 Updated Q4/23 or Q1/24 Hunter’s Cove Solar (North Carolina) $82 Updated Q4/23 or Q1/24 Bear Bra
Slide 108: Powering a Sustainable Future for People and Planet
Powering a Sustainable Future for People and Planet Resiliency Optimization Innovation Delivering on our disciplined, We optimize our operations to Researching and investing in resilient strategy year-over-year to deliver best-in-class service to our critical technologies that will enhance reliably
Slide 109: Attractive investment opportunity
Attractive investment opportunity Resilient strategy drives growth and accelerates net carbon neutral by 2050 Success in renewables Strong long term cashflow from contracted • Contracts for renewable projects affirm assets including natural gas assets competitiveness • Strategy of recontracting natu
Slide 110: Non-GAAP financial measures
Non-GAAP financial measures The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from its joint venture interests, gains or losses on disposals and unrealiz
Slide 111: Forward-looking information
Forward-looking information Forward-looking information or statements included in the presentation are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other
Slide 112: capitalpower.com
Capital C pital capitalpower.com