Dive Brief:
- TransAlta, based in Calgary, Alberta, is selling about 420 MW of geothermal, hydroelectric and natural-gas fired capacity to MidAmerican Energy Holdings for $193.5 million.
- TransAlta co-owns the resources with MidAmerican through their joint venture, CE Generation. CE Generation has ten geothermal plants in Southern California totaling 327 MW and three gas-fired plants in Plattsburg, New York (240 MW); Big Springs, Texas (212 MW); and, Yuma, Arizona (50 MW).
- The decision to sell the assets was driven by their low cash flow and didn't reflect on the company's positive outlook on California and geothermal, Dawn Farrell, TransAlta president and CEO, said during an earnings conference call with analysts.
Dive Insight:
Despite the sale, TransAlta is looking to buy renewable and natural gas-fired power plants in the U.S. “Over the next couple of years I'd like to find a good concentration and a good front in one of the U.S. markets,” Farrell said.
Farrell thinks the U.S. is poised for growth. “I'm fairly ambitious though about the U.S. over the medium term because I fundamentally believe the U.S. is going to grow faster than people believe it is,” Farrell said. “There is a lot of energy efficiency going on and quite a huge uptick in rooftop solar and there's starting to be a market there for storage. So I think it's a restructuring market and it's a market where I think you have to be more cautious how you position there.”
