Isramart : TransAlta committed to growing low-carbon energy sources but will remain “disciplined” on spending

Isramart news:
CALGARY — TransAlta Corp. (TSX:TA) is taking a cautious approach on capital spending in light of uncertainty over government regulations on carbon emissions and capture, the Calgary-based power producer said Friday.

Steve Snyder, TransAlta’s president and chief executive officer, said the company has made significant strides towards reducing its “carbon footprint.”

Electricity generated from renewable energy sources now accounts for 22 per cent of TransAlta’s generation capacity, or 1,966 megawatts out of a total of 8,723 megawatts of capacity.

The remainder of TransAlta’s plants are fuelled by coal and natural gas.

TransAlta is currently in the process of completing the takeover of Canadian Hydro Developers Inc. (TSX:KHD). More than 93 per cent of Canadian Hydro stock has been tendered to the final offer of $5.25 per share.

Canadian Hydro, which has developed wind and water-powered generation plants in several provinces, had rejected and fought TransAlta’s initial offer of $4.55 but got on board after the bid was increased in September.

In addition, the company is working on the Project Power carbon capture and storage retrofit project, which TransAlta says will be the biggest of its kind in the world.

However, TransAlta chief financial officer Brian Burden said the company expects to have about $600 million in free cash available over the next three years, after accounting for the company’s dividend, sustaining capital spending to maintain its infrastructure and announced capital spending on growth projects.

“While our priority remains to deliver low-carbon growth projects that will provide long-term cash flows, we will remain disciplined in our capital allocation and weigh these opportunities against other capital allocation alternatives and maintaining our investment grade credit ratings,” Burden said.

TransAlta also said Friday that it now lowered its target for fleet-availability to 90 per cent from 92 per cent, saying the lower standard offers a “superior economic return” and reduces the risk caused by uncertainty over government regulations.

TransAlta shares were down seven cents at $20.48 on Friday at the Toronto Stock Exchange.