TransAlta and MidAmerican in joint foray into Canadian power

• 11 years ago (2012-10-31)
• Junior Isles

North America 998 Renewables 752

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TransAlta Corp. is joining with Iowa-based MidAmerican Energy Holdings Co., a subsidiary of billionaire Warren Buffett's Berkshire Hathaway, to build natural gas-fired power plants in Canada.

"It's a unique opportunity for TransAlta to be much more aggressive about the size and number of plants that we could develop. We like MidAmerican's disciplined approach to development and, more importantly, we share a common view on returns," TransAlta CEO Dawn Farrell said.

The new deal is MidAmerican's first venture into the Canadian power market, but TransAlta and MidAmerican have had a long standing relationship for more than a decade, including investments in geothermal generation in California and several US gas-fired generating assets.

Farrell estimated Canada will need more than $200 billion in new power generation investment over the next two decades, driven by growing energy development in Western Canada.

"If you look at Canada, there's a huge potential for expansion of (liquefied natural gas), which potentially will need power. There are lots of opportunities here in Alberta in the oil sands as the oil sands guys build up their plans over the next 10 to 15 years. There are opportunities in Saskatchewan," she said.

"And many of those projects are fairly big projects with fairly big price tags, so I think as we look at Canada and its expansion over the next 10 years and the kind of generation that's required, that offers some pretty big opportunities."

MidAmerican CEO Greg Abel said: "At MidAmerican, we have been seeking an entry point to the Canadian electricity generation market, where we see strong potential for growth."

The agreement covers all new natural gas-fuelled generation projects considered by either TransAlta or MidAmerican in Canada, including TransAlta's Sundance 7 project, a potentially 800 MW project based in Alberta, which aims to be completed by 2016-17.

All development and construction or acquisition of approved projects will be funded on a 50-50 basis and TransAlta will be responsible for construction management, operation and maintenance of projects that proceed.

Farrell stated that it was too soon to know just how big the partnership with MidAmerican may become.

TransAlta has spent roughly $4 billion since 2005 to build 1600 MW of new power capacity, including coal and renewables.