Making Sense of Energy

TransAlta Corporation announced its Accelerated Transition to Clean Energy

On December 6th, TransAlta Corporation announced its Accelerated Transition to Clean Energy. In response to this announcement, we have compiled the following summary:

TransAlta Announces Accelerated Transition off Coal

Forward power markets in Alberta jumped significantly the morning of December 6, on the announcement that TransAlta Corporation intends to accelerate the transition from coal to gas and renewable generation.

Prices for 2018 and 2019 moved close to $3.00/MWh to $52.00 and $53.00 respectively in early morning trading on December 6, 2017.

TransAlta held a conference call on Wednesday morning to more fully explain their announcement which indicated the following:

  • Mothballing a combination of Sundance units in 2018 and 2019:
    • Sundance Unit 3, will be temporarily mothballed on April 1, 2018 for a period of up to two years;
    • Sundance Unit 5, will be temporarily mothballed on April 1, 2018 for a period of up to one year; and
    • Sundance Unit 4, will be temporarily mothballed on April 1, 2019 for a period of up to two years.
  • Accelerating the conversion of Sundance Units 3 to 6 and Keephills Units 1 and 2 from coal-fired generation to gas-fired generation between 2021 and 2022. Once converted to gas, the plants are anticipated to be able to run through to 2031 to 2039 (five-to-ten years past the unit’s federal end of coal life).
  • TransAlta Corporation will work with Tidewater Midstream and Infrastructure Ltd. to construct a 120 kilometre natural gas pipeline from Tidewater’s Brazeau River Complex to TransAlta’s generating units at Sundance and Keephills. The pipeline will provide an initial capacity of 130 million cubic feet of gas per day by 2020 and will have an expansion capability to 340 million cubic feet of gas per day.

On April 19, 2017, the Company announced that it would retire Sundance Unit 1 and mothball Sundance Unit 2, effective January 1, 2018.  Sundance Unit 2 will also be available to return to service in 2020.

Updated Forward Pricing as of December 6, 2016

Please see the updated TransCanada Power Market Report here:  https://www.transcanada.com/globalassets/pdfs/power/alberta-power-marketing/power-market-updates/2017/transcanada-alberta-power-marketing-update-december-2017.pdf.