TransAlta adds new wind, solar capacity through two deals

Canada-based TransAlta Corp. (TSX: TA) (NYSE: TAC) reported on Oct. 30 that it recently took a couple of major steps to add renewable energy capacity, including through a deal that closed on Sept. 1 with Suncor Energy.

On Sept. 1, TransAlta closed the restructuring of an arrangement for power generation services with Suncor Energy at Suncor’s oil sands base site near Fort McMurray, Alberta, and the acquisition of Suncor’s interest in two wind farms located in Alberta and Ontario. TransAlta’s Poplar Creek cogeneration facility, which has a maximum capability of 376 MW, had been built and contracted to provide steam and electricity to Suncor until 2023.

Under the terms of the new arrangement, Suncor acquired two steam turbines with an installed capacity of 132 MW and certain transmission interconnection assets. In addition, Suncor assumed full operational control of the co-generation facility, including responsibility for all capital costs, and the right to use the full 244 MW capacity of TransAlta’s gas generators until Dec. 31, 2030.

TransAlta will provide Suncor with centralized monitoring, diagnostics and technical support to maximize performance and reliability of plant equipment. Ownership of the entire Poplar Creek cogeneration facility will transfer to Suncor in 2030.

As part of the arrangement, TransAlta acquired Suncor’s interest in the 20-MW Kent Breeze wind facility located in Ontario and Suncor’s 51% interest in the 88-MW Wintering Hills wind facility located in Alberta. The Kent Breeze facility has a 20-year contract with the Ontario IESO.

Also, on July 26, TransAlta agreed with Rockland Capital to acquire 71 MW of fully contracted renewable generation assets for cash consideration of US$76 million together with the assumption of certain tax equity and US$42 million of non-recourse debt. The assets acquired include 21 MW of solar projects located in Massachusetts and the 50-MW Lakeswind facility located in Minnesota. The assets are contracted under long-term power purchase agreements ranging from 20 to 30 years. The purchase of the solar projects in Massachusetts closed on Sept. 1, and the purchase of the Lakeswind wind project in Minnesota was completed on Oct. 1.

The acquisition marks the first solar facilities for TransAlta and aligns with its strategy of growing its renewables platform, diversifying its portfolio, and increasing the pipeline of assets for potential future drop-down into “yieldco” affiliate TransAlta Renewables.”The acquisition adds geographic, technological and counterparty diversification, and establishes a broader platform in the U.S. for future growth in renewables,” the company added. “The solar projects, consisting of four ground mounted facilities and four roof-top facilities, are all contracted on a long-term basis and are qualified under phase one of the Massachusetts Solar Renewable Energy Credit (SREC-I) program, established to encourage investment in distributed solar generation. The wind facility has been operational since March 2014 and is contracted under three long-term power purchase agreements until 2034 with high quality counterparties.”

Also of note that on June 9, TAMA Power, partnership involving TransAlta, received approval from the Alberta Utilities Commission to construct and operate an 856 MW combined-cycle natural gas-fired power plant in Alberta. The Sundance 7 project has received all regulatory approvals after receiving the Environmental Protection Enhancement Act approval from Alberta Environment and Parks on Oct. 1. “Construction of Sundance 7 will not commence until we have contracted a significant portion of the plant capacity,” TransAlta said.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.