CALGARY, AB, Oct. 22, 2020 /PRNewswire/ - 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 contains forward looking statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "propose", "plans", "intends" and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating execution of the and the potential benefits of the contract renewal; the integration of renewable electricity generation, including the 18.5 MW solar photovoltaic farm at Nickel West's Leinster and Mount Keith operations, and a 17 MW waste heat steam turbine system at the Kalgoorlie Smelter. These forward looking statements are based on a number of assumptions considered by the Company to be reasonable as of the date of this news release, including, but not limited to, the following: no significant changes to applicable laws and regulations, including any tax and regulatory changes; no significant changes to our relationship with BHP; and assumptions regarding our current strategy and priorities, including as it pertains to behind-the-fence investment in Western Australia. The forward looking statements are subject to a number of risks and uncertainties that may cause actual performance, events or results to differ materially from those contemplated by the forward looking statements, which include: disruptions to natural gas fuel source, changes in economic and market conditions; changes in tax, environmental, regulatory and other laws and regulations; and other risks and uncertainties discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company's Annual Information Form and Management's Discussion and Analysis for the year ended December 31, 2019, filed under the Company's profile with the Canadian securities regulators on www.sedar.com. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release. The Company undertakes no obligation to update or revise any forward looking information except as required by law.
Note: Unless otherwise noted, all financial figures are in Canadian dollars.
SOURCE TransAlta Renewables Inc