Transalta Corporation · TSX:TA
Transalta — Investor Presentation (April 2021)
15 slides from Transalta's investor presentation, Apr 12, 2021
Slide 1: Powering the Future: A Deep Dive into the Alberta Power Market
Powering the Future A Deep Dive into the Alberta Power Market April 12, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements or information (collectively referred to herein as “forward-looking statements”) within the meaning of applicable securities legislation. All forward-looking statements are based on our beliefs as well as assumptions ba
Slide 3: Evolution of the Alberta Electricity Market
Evolution of the Alberta Electricity Market Energy Creation PPAs Balancing Pool dispatched December 31, and auction returned to terminates Sun through 2020 PPAs of the Balancing B&C and Battle market expire PPAs Pool River 5 PPA offers 1996 2001 2016 2018 2019 2021 Regulated / PPA Fully Cost Recover
Slide 4: Alberta Power Market 101
Alberta Power Market 101 Alberta Government has never owned/operated an electric utility company Energy-only market Competitive markets determine wholesale prices Merchant generators are paid only for the electricity that is produced Prices fluctuate every hour with available/offered suppl
Slide 5: Historical Alberta Energy Prices
Historical Alberta Energy Prices ALBERTA ELECTRICITY PRICES – AVERAGE POOL PRICE ($/MWH) Subdued demand – financial crisis PPAs put back & expanded $100 to Balancing generation Pool PPAs expire – fleet $90 offer control with generation $80 owners $70 $60 $50 $40 $30 $20 $10 $0 Weak oil prices & Shep
Slide 6: 2021 Shift in Offer Control and Market Share
2021 Shift in Offer Control and Market Share 2020 OFFER CONTROL (1) 2021 OFFER CONTROL (2) TransAlta, Other, TransAlta, Other, 5,427 3,268 MW 5,026 MW 3,676 MW MW Capital Power, 1,321 MW Capital Power, 2,083 MW Enmax, 1,446 MW Balancing Pool, Heartland, Enmax, 2,284 MW Heartland, 2,552 MW 1,446 MW 1
Slide 7: Supply Cushion
Supply Cushion Q1 2021 SUPPLY CUSHION – ADJUSTED FOR LONG LEAD-TIME ASSETS 900 800 37.1% 700 27.9% 28.1% 600 Number of Hours 500 400 300 200 6.1% 100 0.8% 0 >2,000 1,500-2,000 1,000-1,500 500-1,000 <500 MW of Supply Cushion Supply cushion tighter than current supply conditions indicate 7
Slide 8: TransAlta's Role in Alberta Power Supply
TransAlta’s Role in Alberta Power Supply Fleet flexibility is key in the Alberta merchant market Converted units provide supply when renewables are not available/generating Renewables create credits that offset carbon and provide clean power to the grid 2020 ALBERTA FLEET 2021 ALBERTA FLEET 19
Slide 9: TransAlta's Alberta Fleet Characteristics
TransAlta’s Alberta Fleet Characteristics Hydro Wind Converted Gas Low variable cost Low variable cost Higher variable cost Water a finite, storable Price taker Low capital investment resource Not correlated to Base load and peak Allows for optimization of flows event/weather drive
Slide 10: Rising Carbon Costs
Rising Carbon Costs Under TIER every large emitting facility is given a GHG emissions benchmark Gas generation is less carbon intensive and less impacted by changing carbon prices than coal Renewable generation generates credits and avoids a carbon levy IMPACT OF INCREASING CARBON COSTS ON GEN
Slide 11: Historic Demand - Alberta
Historic Demand - Alberta Recent Alberta demand has been impacted by large decreases in industrial load, due to the wildfires and COVID-19 12,000 Record high demand Feb 9, 2021 11,000 Oilsands development driving demand growth 10,000 Demand (MW) 9,000 8,000 7,000 Fort McMurray COVID-19 Wild Fires
Slide 12: Demand - Load Growth
Demand - Load Growth Future load growth will come from new sources such as: cryptocurrency, electric vehicles, cannabis, and new petrochemical business Rooftop solar will absorb some load as customers offset some demand Annual load growth of ~0.9% driven by new sources of industrial demand & E
Slide 13: Hydro - Overview
Hydro - Overview Own and operate over 90% of Alberta’s hydro (834 MW) Mix of storage and run-of-river facilities Brazeau and Bighorn facilities account for ~80% of ancillary revenue Green credits under new Alberta carbon policy Step up in cash flows with the expiry of the 2020 SEGMENTED CA
Slide 14: Hydro EBITDA Build-up Example
Hydro EBITDA Build-up Example POST-PPA HYDRO EBITDA BUILD-UP Capacity Payment Hydro EBITDA step-up expected with PPA expiration Assumptions: (4) Based on 3-year average historical ancillary production levels of 3,000 GWh (1) Based on 3-year average historical production levels of 1,625 GWh (5) Based
Slide 15: Questions and Answers
TransAlta tye, Powering Economiesand:Communities = Contact us today Visit us at TransAlta.com a