TransAlta Rises Most Since 2008 on Alberta Climate Change Plan

  • Shares gained as much as 15% on phase out of coal plants
  • Wind producers could see C$10-$15 billion in business growth

TransAlta Corp. gained the most in seven years after the Alberta government announced a phase-out of coal generation and an acceleration of wind and solar power construction, giving the renewable energy producer an edge over competitors.

The Calgary-based power company rose 13 percent to C$6.17 at 10:48 a.m. in Toronto, the biggest jump since October 2008. The Alberta government announced Sunday that it would phase out coal-power plants by 2030 while boosting investments in renewable energy as part of its plan to curb emissions from Canada’s oil and gas hub.

TransAlta was planning to phase out most of its coal generation by 2030 under existing federal regulations, while Edmonton-based competitor Capital Power Corp.’s coal fleet was still expected to operate beyond then. TransAlta’s renewable energy division, already the largest operator of wind turbines in Canada, will benefit from an acceleration of carbon-free generation, analysts said.

Wind energy producers stand to gain under the new plan with C$10 billion ($7.5 billion) to C$15 billion in growth opportunities, National Bank Financial Inc. analysts led by Rupert M. Merer wrote in a research note.

The accelerated phase out that will affect six coal-power plants in Alberta will result in C$12 billion of foregone revenue to plant owners, including C$2 billion for Capital Power and C$1 billion for TransAlta, according to Industrial Alliance Insurance. Producers are expected to be compensated for the phase out, "an important counterbalance," analyst Jeremy Rosenfield, based in Quebec City, wrote in a note.

Capital Power plunged 6.9 percent to C$17.46, the biggest drop in three years.

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