Capital Power (TSX:CPX) said Dec. 4, in announcing several corporate developments, that construction is expected to start soon on the gas-fired Genesee 4&5 project in Alberta.
Capital Power and ENMAX Corp. are joint venture partners on the proposed Genesee 4&5 facility. The project was granted approval by the Alberta Utilities Commission in August 2014. Pending a successful outcome of an Alberta Environment and Sustainable Resource Development review including the Environmental Protection and Enhancement Act approval and a water license amendment, which are expected by the end of this year, the project will proceed to the construction phase. Capital Power’s Board of Directors has approved the project.
“With this project and the Shepard Energy Centre, Capital Power and ENMAX will jointly own two of the largest and most efficient generating facilities in Alberta,” said Brian Vaasjo, President and CEO of Capital Power. “With the attractive economics of Genesee 4&5, it is best-positioned to be the next large natural gas-fired generation project to be built in the province and we expect to begin construction with shovels in the ground in mid-2015.”
The Genesee 4&5 power project will utilize the latest state-of-the-art high efficiency combined cycle natural gas turbine technology and will have a generation capacity of approximately 1,060 MW. Agreements for the supply and maintenance of two one-on-one, single shaft power islands, each incorporating a natural gas turbine, steam turbine, generator and heat recovery steam generator are being finalized and are expected to be in place by the end of 2014.
The facility will be built at Capital Power’s existing Genesee Generating Station located west of Edmonton, Alberta. The Genesee site has significant cost advantages. It is ideal for Alberta’s next large scale generating facility because it will utilize the existing water intake/discharge structures and the existing transmission interconnection, which will connect to the new 500-kV (dc) line and is within 500 meters of the project. There will also be operations savings from synergies with existing generation units at the site.
Pending all regulatory approvals, construction of the project will begin in mid-2015 with a targeted completion date as early as late 2018. This will coincide with the need for additional generation to meet growing demand and to replace generation from the retirement of some existing coal generating units in Alberta. Capital Power will lead the construction of the project and will be the operator of the facility.
Acquisition of significant development sites
In November 2014, Capital Power signed a Purchase and Sale Agreement to acquire Element Power US LLC for approximately US$69m, including US$52m in assumed project financing debt. The acquisition of Element Power provides Capital Power with a portfolio of attractive wind and solar energy development sites in the United States.
The development sites consist of 10 wind sites and four solar sites, including a North Carolina site with a 15-MW solar contract with Duke Energy Progress. The acquisition also includes Macho Springs, a 50-MW wind project in New Mexico that has been operating since 2011 under a 20-year power purchase arrangement with Tucson Electric Power. The transaction is expected to close prior to year-end 2014 and is subject to FERC approval for the transfer of Macho Springs.
Outlook for 2015
At its Dec. 4 Investor Day, the company will review its corporate priorities and financial targets for 2015 including on-time, on-budget and safe construction of current development projects, including:
- the Shepard Energy Centre, scheduled to begin commercial operations in the first quarter of 2015;
- K2 Wind, scheduled to begin commercial operations in mid-2015; and
- the transition from development phase to construction phase for the Genesee 4&5 project.
Capital Power is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 2,600 MW of power generation capacity at 14 facilities across North America and owns 371 MW of capacity through a power purchase agreement. An additional 490 MW of owned generation capacity is under construction in Alberta and Ontario.