Canadian independent power producer (IPP) TransAlta Renewables Inc (TSE:RNW) said on Friday it had found cracks at several turbine foundations at its majority-owned Kent Hills wind farm complex in New Brunswick province, Canada, after a single wind tower there collapsed about a month ago.
The company also revised down its 2021 financial targets as it is not collecting wind energy revenues from the Kent Hills’ off-taker due to the shut-down of most of the turbines.
While a tower fell at the Kent Hills site 2, as a precaution TransAlta Renewables took offline all 50 turbines at Kent Hill 1 and Kent Hills 2 in October.
The 167-MW Kent Hills complex features three sites commissioned in phases -- in December 2008, November 2010 and October 2018.
The IPP said the independent engineering and safety assessment had identified sub-surface cracks at several foundations at the Kent Hills 1 and Kent Hills 2 sites, and it is likely that these would need to be repaired or replaced.
Further inspections and testing will be required to determine the remediation plan, with TransAlta estimating that the cost of foundation replacement could stand between CAD 1.5 million (USD 1.2m/EUR 1m) and CAD 2.0 million per foundation.
Issues with the foundations at Kent Hills 1 and 2 are unique to the design of those sites, TransAlta said. Five turbines at Kent Hills 3 are still in operation, and the site is generating revenues under its power purchase agreement (PPA).
Foregone revenues from the sale of power from the 50 turbines are expected to total CAD 3.7 million per month for as long as the machines are offline, TransAlta said.
In light of the damage and lost revenues, the IPP was forced to cut its comparable EBITDA guidance to CAD 450 million-CAD 480 million from CAD 470 million-CAD 500 million. Adjusted funds from operations are now seen at between CAD 300 million and CAD 330 million – previously, CAD 310 million and CAD 340 million.
Cash available for distribution is expected to range between CAD 250 million and CAD 270 million, down from CAD 260 million and CAD 290 million, TransAlta Renewables said.
The Kent Hills complex is owned 83% by TransAlta Renewables indirect subsidiary Kent Hills Wind LP, with Natural Forces Technologies holding a 17% interest.
(CAD 1.0 = USD 0.809/EUR 0.699)
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Wind turbines. Source: TransAlta Corp (www.transalta.com).
