TransAlta has plug pulled on South Hedland power deal
TransAlta Corp. and TransAlta Renewables Inc. have been notified that Fortescue Metals Group is terminating the PPA on the South Hedland station, Australia. The companies dispute Fortescue’s claim that the station has not achieved commercial operations.
TEC HEDLAND Pty. Ltd., a subsidiary of TransAlta Corp., has received formal notice of termination of the South Hedland power purchase agreement from a subsidiary of Fortescue Metals Group Ltd. (FMG). The PPA allows FMG to terminate the agreement if the power station has not reached commercial operation within a specified time period. FMG continues to be of the view that the South Hedland power station has yet to achieve commercial operation.
TransAlta and TransAlta Renewables Inc. remain confident that all conditions required to establish commercial operations, including all performance conditions, have been achieved under the terms of the PPA. These conditions include receiving a commercial operation certificate, successfully completing and passing certain test requirements, and obtaining all permits and approvals required from the North West interconnected system (NWIS) and government agencies.
Confirmation of commercial operation has been provided by independent engineering firms, as well as by Horizon Power, the state-owned utility. TransAlta and TransAlta Renewables will take all steps necessary to protect their interests in the facility and ensure all cash flows promised under the PPA are realized.
The South Hedland power station has been fully operational and able to meet FMG’s requirements under the terms of the PPA since July, 2017.
The South Hedland power station, located in the Pilbara region of Western Australia, is a 150-megawatt combined-cycle natural gas power station that is one of the most efficient power plants in Western Australia, providing low-cost electricity to its customers and generating low greenhouse gas emissions. About TransAlta Corp. TransAlta is a power generation and wholesale marketing company focused on creating long-term shareholder value. TransAlta maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta’s focus is to efficiently operate wind, hydro, solar, natural gas and coal facilities in order to provide customers with a reliable, low-cost source of power. For over 100 years, TransAlta has been a responsible operator and a proud contributor to the communities in which it works and lives.
About TransAlta Renewables Inc.
TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (IPP) in Canada. Its asset platform and economic interests are diversified in terms of geography, generation and counterparties, and consist of interests in 18 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities and one natural gas pipeline, representing an ownership interest of 2,441 megawatts of net generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Quebec, New Brunswick, the st ate of Wyoming and the state of Western Australia.
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