TransAlta Corporation, one of Alberta’s largest power generators, is undergoing a significant transformation as it shifts its focus towards renewable energy production. The company announced an updated capital growth plan at its investor day on Tuesday, pledging to invest $3.5 billion in clean electricity generating and storage capacity by the end of 2028.
This ambitious plan will see TransAlta add an additional 1,750 megawatts (MW) of clean power to its portfolio within the next five years. The majority of this new generation will come from organic growth – developing wind and solar projects from scratch – with the company also open to growth opportunities through mergers and acquisitions.
The shift towards renewable energy will have a profound impact on TransAlta’s business model, with CEO John Kousinioris projecting that by 2028, approximately 70% of the company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) will come from renewables. This is a significant increase from the current figure of 40%.
TransAlta’s embrace of renewable energy is not without its challenges. The company is operating in an environment of rising interest rates, inflation, and supply chain issues, which have put pressure on renewable energy companies. Additionally, there is ongoing debate about the pace and cost of the energy transition, with some questioning the feasibility of achieving ambitious net-zero targets.
Despite these challenges, TransAlta remains steadfast in its commitment to renewable energy. Kousinioris emphasized the company’s long-term perspective, stating that TransAlta is not swayed by short-term turbulence. He expressed confidence in the long-term growth prospects for renewable energy, driven by factors such as increasing government support, rising carbon prices, and growing demand for clean electricity.
TransAlta’s $3.5 billion investment in renewable energy is a clear indication of the company’s commitment to a sustainable future. This move positions TransAlta as a leader in the transition towards a clean energy economy.
