CALGARY, Alberta (October 22, 2020) – TransAlta Renewables Inc. (“TransAlta Renewables” or the “Company”) (TSX: RNW) announced today that Southern Cross Energy (“SCE”) has amended and extended its current power purchase agreement (“PPA”) with BHP Billiton Nickel West Pty Ltd (“BHP”) in respect of SCE’s 245 MW of generation facilities in the Goldfields region of Western Australia. The amendment to the PPA replaces the previous contract that was scheduled to expire December 31, 2023. The Company owns an indirect economic interest in SCE.
“This is an exciting announcement for our Australian business and continues a strong relationship with our customer BHP Nickel West,” said John Kousinioris, President and Chief Executive Officer of TransAlta Renewables. “Western Australia is an important market for us, where we have been operating for over 24 years.”
The PPA amendment extends the term to December 31, 2038 and provides SCE with the exclusive right to supply electrical energy to BHP’s mining operations located in the Goldfields region of Western Australia. The amendment preserves SCE’s current economic benefit to 2023, while also providing SCE a return of and on new capital investments which will be required to support BHP’s future power requirements and recently announced emission reduction targets. The PPA provides BHP with the ability to integrate renewable electricity generation, including solar and wind, with energy storage technologies, to meet its emissions reduction targets and deliver lower carbon, sustainable nickel to its customers. The amended PPA also provides BHP participation rights in new capital investments, subject to the satisfaction of certain conditions.
The evaluation of renewable energy supply and carbon emissions reduction initiatives under the extended PPA with SCE are already under way, including an 18.5 MW solar photovoltaic farm at Nickel West’s Leinster and Mount Keith operations, supported by a battery energy storage system. A 17 MW waste heat steam turbine system at the Kalgoorlie Smelter is also being evaluated to provide low-emissions electricity from furnace heat recovery.
About TransAlta Renewables Inc.
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 23 wind facilities, 13 hydroelectric facilities, seven natural gas generation facilities, one solar facility, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,537 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Wyoming, Massachusetts, Minnesota and the State of Western Australia. Our objectives are to (i) provide stable, consistent returns for investors through the ownership of, and investment in, highly contracted renewable and natural gas power generation and other infrastructure assets that provide stable cash flow primarily through long-term contracts with strong counterparties; (ii) pursue and capitalize on strategic growth opportunities in the renewable and natural gas power generation and other infrastructure sectors; (iii) maintain diversity in terms of geography, generation and counterparties; and (iv) pay out 80 to 85 per cent of cash available for distribution to the shareholders of the Company on an annual basis.
Cautionary Statement Regarding Forward Looking Information
This News Release includes “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). In particular, this News Release contains forward-looking statements including, but not limited to, statements relating to: the Financing, including that the gross proceeds will be approximately AUD$800 million; the terms of the Notes, including that they will bear interest at a rate of 4.07% per annum, payable quarterly and maturing on June 30, 2042; that the Financing will close on or around October 22, 2020; and the anticipated use of proceeds. The material factors and assumptions used in the preparation of the forward-looking statements contained herein, which may prove to be incorrect, include, but are not limited to, assumptions pertaining to interest and foreign exchange rates; investment values; hedging activities; global equity and capital markets (including continued access to equity and debt markets); industry sector and the Company’s and Issuer’s financial conditions (including developments and volatility arising from the current pandemic health event resulting from the novel coronavirus (COVID-19); business competition and other general economic, political and market factors in North America, Australia and internationally. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this News Release include, but are not limited to, risks relating to the Issuer’s ability to satisfy the conditions of closing the Financing, including obtaining any required consents and documents and the need to negotiate and execute the Financing documents; the need for continued cooperation of the initial purchasers; the need to successfully market the offering; global economic climate and market volatility, including due to the COVID-19 pandemic; operational risks at the South Hedland power station; litigation risks; currency fluctuations and other risk factors contained in the Company’s Annual Information Form and Management’s Discussion and Analysis for the year end dated December 31, 2019. Readers are cautioned not to place undue reliance on the forward-looking statements, which reflect the Company’s expectations only as of the date hereof. TransAlta disclaims any intention or obligation to publicly update these forward-looking statements to reflect new information, future events or otherwise, except as required by applicable laws.
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