EDMONTON, Alberta – Capital Power Corporation (“Capital Power” or “the Company”) (TSX: CPX) announced today:
- Execution of three long-term contracts in North Carolina and Ontario, totalling 287 megawatts (MW) of additional generation and energy storage capacity,
- Execution of a contract in the Ontario Independent Electric System Operator’s (IESO) Same Technology Upgrade Solicitation,
- Successful bid in the Ontario IESO’s Expedited Long-Term RFP, and
- Updates on timing and costs of the Genesee Repowering Project (the “Repowering Project”) in Alberta.
These announcements demonstrate the value of our balanced approach to net zero that supports the increase of renewable generation to enhance the sustainability of our power system while complementing the variability of these assets with battery energy storage systems (BESS) and reliable natural gas generation.
“The executed contracts, with an average duration of nearly 21 years, increase our contracted cash flows and deliver on our commitment to provide reliable power for our communities and responsibly reach net zero by 2045,” said Avik Dey, President and CEO of Capital Power. “Maple Leaf Solar is our fourth solar development project, leveraging our established expertise in building power projects. We see attractive growth opportunities in North Carolina where we have six additional well-positioned solar development sites totalling approximately 270 MW. In Ontario, the five contracts reaffirm Capital Power’s approach to meeting growing electricity demand. Our midlife natural gas assets continue to provide critical generation capacity to Ontarians as we also build out low-carbon solutions for our energy future.”
Maple Leaf Solar awarded 25-year contract
The Company executed a 25-year, fixed price renewable power purchase agreement (PPA) for 100% of the output from its Maple Leaf Solar project (“Maple Leaf” or “The Project”) with Duke Energy Progress (DEP) as part of the 2022 Duke Energy Solar Procurement Program. Maple Leaf is a 73 MWac (92 MWdc) solar development project in Selma, North Carolina. The construction of the Project is planned to begin in 2025 at a total cost of approximately US$165 million with an expected commercial operations date in the fourth quarter of 2026, pending completion of the Duke interconnection upgrades. Local zoning approvals were obtained in May 2023 and detailed design and permitting are underway.
Five new contracts from Ontario IESO bids
Capital Power has been an active participant in the Ontario IESO’s expedited call for new power generation and capacity in high priority areas to help address the IESO’s forecasted shortfall, which has resulted in five successful bids. Capital Power has:
- Executed two long-term contracts for the East Windsor Expansion (81 MW summer and 100 MW winter contracted capacities) with a term to 2040 (approximately 15 years) and the York BESS project (114 MW contracted capacity) which is contracted until 2047 (approximately 22 years) as part of the IESO’s Expedited Long-Term RFP process (selection by the IESO previously announced on May 16, 2023). Both projects are expected to begin commercial operations in 2025.
- Executed a 3-year contract extension for the York Energy Centre associated with its successful bid in the Same Technology Upgrade Solicitation for approximately 38 MW. The upgrade will increase York’s contracted capacity from 394 MW to 431 MW. The contract extension applies to the new contracted capacity of 431 MW (from the COD of the upgrades expected in 2025) and extends the current contract from 2032 to 2035.
- Previously been awarded a 6-year contract extension through the Same Technology Upgrade Solicitation for the Goreway Power Station (40 MW upgrade).
- Been selected as a successful proponent for an approximately 22-year contract to 2047 for the Goreway BESS project as part of Category 2 of the IESO’s Expedited Long-Term RFP. Capital Power expects to execute this contract by July 25, 2023. The project is expected to enter service in 2025.
With the addition of these contracts, the Company will have more than 1,500 MW of contracted capacity in Ontario that support this key market’s critical power needs and significantly increase Capital Power’s contracted cash flow profile.
“Our success in securing three new projects in the Ontario IESOs Expedited Long-Term RFP as well as securing two new uprates with contract extensions is an embodiment of Capital Power’s midlife gas strategy of acquiring well-positioned assets in markets with strong fundamentals, enhancing, upgrading, and expanding the facilities and extending their contracts with investment-grade off takers,” said Chris Kopecky, SVP and Chief Legal, Development and Commercial Officer of Capital Power. “Furthermore, the deployment of BESS solutions on existing natural gas sites demonstrates the strategic value of these sites for new technologies beyond simply natural gas generation.”
Ontario IESO Expedited Long-Term RFP
|East Windsor Expansion
|To 2040 (approximately 15 years)
|York Battery Energy Storage System
|To 2047 (approximately 22 years)
|Goreway Battery Energy Storage System
|To 2047 (approximately 22 years)
Ontario IESO Same Technology Upgrade Solicitation
|Goreway Power Station Upgrade
|York Energy Centre1 Upgrade
1 50% joint ownership with Manulife.
Updates to Genesee Repowering Project schedule and costs
As a result of construction delays on the Repowering Project, the Company is modifying the commissioning timelines for the repowered units. Simple cycle commissioning of Unit 1 is expected to commence in December 2023, approximately 60 days later than initially anticipated. Simple cycle commissioning for Unit 2 is expected to be further delayed and will begin in March 2024. Combined cycle commissioning is expected to begin in April 2024 (Unit 1) and June 2024 (Unit 2). The total capital costs for the Repowering Project have increased to $1.35 billion as a result of cost escalations and increased labour costs.
The delay in commissioning is expected to have a modest impact on the full year 2023 AFFO and adjusted EBITDA guidance as the unfavourable impact will be offset across the portfolio. The Company expects to be above the midpoint of the guidance range despite an unforced outage at Genesee during periods of high pricing in June that dampened a strong start to the second quarter relative to the guidance provided in the Company’s first quarter 2023 report. Management is currently evaluating the impact of commissioning delays on the Company’s target of being off coal in 2023 and expects to provide additional information on the 2023 outlook and our off-coal target with the second quarter 2023 earnings release.
In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 Territory and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.
About Capital Power
Capital Power (TSX: CPX) is a growth-oriented North American wholesale power producer with a strategic focus on sustainable energy headquartered in Edmonton, Alberta. We build, own, and operate high-quality, utility-scale generation facilities that include renewables and thermal. We have also made significant investments in carbon capture and utilization to reduce carbon impacts. Capital Power owns approximately 7,500 MW of power generation capacity at 29 facilities across North America. Projects in advanced development include approximately 151 MW of owned renewable generation capacity in Alberta and 512 MW of incremental natural gas combined cycle capacity, from the repowering of Genesee 1 and 2 in Alberta.