- TransAlta Corporation (TSX:TA) has announced the acquisition of a new Michigan-based contracted cogeneration asset
- The facility is comprised of a single GE LM2500 gas turbine and an ABB steam turbine
- The site currently holds a contract for a long-term power purchase and steam sale agreement
- Output of electricity and steam is expected to provide consistent revenue through to 2026
- TransAlta Corporation (TA) is down 3.97 per cent, with shares currently trading at C$5.81 and a market cap of $1.64 billion
TransAlta Corporation (TSX:TA) has announced the acquisition of a new Michigan-based contracted cogeneration asset.
The acquisition is the latest addition to the company’s fleet of electrical power generation assets in Canada, the United States and Australia.
TransAlta purchased the 29 MW cogeneration facility from two private companies for a total of C$38.26 million and will be funded with cash on hand.
The facility has been operational since 1991 and is comprised of a single GE LM2500 gas turbine and an ABB steam turbine. It currently holds a long-term power purchase and steam sale agreement with high quality counterparties.
Dawn Farrell, President and CEO of TransAlta, believes that the acquisition has a range of significant benefits.
“The acquisition marks our first US cogeneration project and aligns with our strategy of growing our on-site generation business, diversifying our cogeneration portfolio, and increasing the pipeline of assets for potential future drop-downs into TransAlta Renewables.
“The expansion into new geographic markets further enhances our position as a leader in behind the fence generation and provides potential for future opportunities in the US cogeneration space,” she said.
Electricity and steam output from the facility is expected to provide consistent and predictable revenue through to 2026.
The acquisition will be subject to the normal regulatory approvals and is expected to close in the second quarter of this year.
Earlier this month, the company released its full year 2019 results. In the announcement, the company drew attention to a 200,000-tonne reduction in carbon emissions compared to the year before.
“All of the hard work by the TransAlta employees throughout the year has allowed us to progress on our main goal which is to be 100 per cent clean electricity by 2025,” Dawn said, at the time.
TransAlta Corporation (TA) is down 3.97 per cent, with shares trading for C$5.81 at 12:45pm EST.