TransAlta Corporation (TAC) | The Buildout — AI Infrastructure

——Mkt cap — · 52-wk —–— · YTD — · delayed

Updated Aug 12, 2026Q2 FY2026 reviewed

TransAlta supplies power, site access, and underutilized gas-fired generating capacity to data-center developers in Alberta.

230 MW initial PPA

MOU with CPP Investments and Brookfield names TransAlta exclusive provider.

Up to 1 GW framework

Additional phases under evaluation at Keephills.

2027 hedge 6.6 TWh

Locked at $64/MWh, above current forward pricing.

Alberta spot $29/MWh

Q2 2026 spot sits below the $40–$60/MWh guidance range.

The Buildout Takeaway

TransAlta is pairing a non-binding data-center option at Keephills with a heavily hedged Alberta position. The story turns on whether that option becomes contracted cash flow before weak spot prices erode the merchant base.

Analyst coverage

9 analysts·8 Buy1 Hold0 Sell

Coverage is thin — only 1 price estimate, so no target is shown

Management guidance

Adjusted EBITDA $950M–$1.1B · Free cash flow $350M–$450M, or $1.18–$1.51/share

Important: The Buildout is a data analytics platform. Content is generated by algorithms and AI agents using public filings, earnings transcripts, and market data. This is not personalized investment advice.

Our View

The Verdict

TransAlta owns and operates hydro, wind, solar, battery storage, and gas-fired generation across Canada, the United States, and Western Australia. Its direct AI-infrastructure role is early-stage: it is positioned to sell power, site access, and underutilized gas-fired generating capacity to data-center developers at Keephills in Alberta.

Market Cap	—
Revenue (TTM)	$1.6B
Revenue Growth	−9.0%
EBITDA Margin (TTM)	27.3%

Net Debt	$2.8B
Earnings Beats	2 of 7
P/E (TTM)	—
EV/EBITDA (TTM)	—

What We Like

FY2025 adjusted EBITDA came in at $1.1 billion, the lower end of guidance; free cash flow was $514 million, or $1.73/share, above the midpoint.
The 2027 hedge position expanded to roughly 6.6 TWh at $64/MWh by the Q2 2026 call, up from about 4,000 GWh at $71/MWh at the February call.
Keephills MOU names TransAlta as exclusive site and power provider, with an initial ~230 MW PPA and up to ~1 GW under evaluation.
Gas realized prices were $66/MWh in 2025 and $68/MWh in Q2 2026, a 50% and 134% premium to spot.
Centralia Unit 2 tolling agreement with Puget Sound Energy is fully contracted until 2044 on a 700 MW coal-to-gas conversion.

What We’re Watching

Keephills MOU is non-binding; management has not disclosed termination economics, risk-sharing, load ramp, or PPA terms.
Alberta spot fell to $29/MWh in Q2 2026, below the $40–$60/MWh range cited for 2026 guidance.
Centralia needs a Class 3 estimate by end of 2026 and FID in Q1 2027, while DOE 90-day availability orders continue.
S&P shifted its outlook to negative while reaffirming BB+; asset recycling and the Brookfield hydro option are not fully in company control.

Bottom Line

The strategic story has hardened from progress to a signed MOU, but the reported earnings inflection has not arrived. Management has kept timeline promises, yet the Keephills MOU remains non-binding and Alberta spot remains weak. The open question is whether definitive data-center agreements and a favorable AESO determination arrive before the hedge protection erodes.

Next upDefinitive agreements for the Keephills data-center MOU are expected during 2026, and management hopes for AESO underutilized-capacity clarity in the next quarter or so. That tests whether the initial ~230 MW PPA can advance and whether a path toward ~1 GW becomes available.

Last Quarter — Q2 FY2026

Earnings

Q2 2026 revenue was $343.1 million, with gross margin of 88.9%. The standout metric was the gas fleet's realized price of $68/MWh, a 134% premium to the $29/MWh Alberta spot average.

Metric	Q2 FY2026	Q1 FY2026	Q2 FY2025	YoY
Revenue	$343M	$407M	$318M	+7.8%
Gross margin	88.9%	43.0%	77.1%	+1180bps
EBITDA	$175M	$102M	$109M	+60.6%
EPS	$0.11	$0.03	$-0.24	−146.8%

We remain confident in achieving our 2026 guidance range.— Joel Hunter, President and CEO, 2026-07-31

Management tone: Management maintained confidence on the strategic path across the Q4/FY2025 and Q2 2026 calls while acknowledging near-term pressure from weak Alberta power prices and the S&P negative outlook. It pointed to the contracted fleet, hedge position, and optimization as the basis for reaffirming 2026 guidance.

Management Guidance

Management initiated 2026 guidance of adjusted EBITDA $950 million–$1.1 billion and free cash flow of $350 million–$450 million, or $1.18–$1.51 per share, and reaffirmed it at both Q1 and Q2 2026 results. The Colorado acquisition is not factored into that reaffirmation. Management also said contracted fleet, hedging, and optimization cover roughly 80% of expected revenue from generating facilities.

Business Trajectory

Trajectory

The code-computed revenue trajectory is stable, but reported revenue declined sequentially from $407.1 million in Q1 2026 to $343.1 million in Q2 2026. Gross margin expanded to 88.9% from 43.0%, and EBITDA margin to 50.9% from 25.1%, even as Alberta spot fell to $29/MWh. The company attributes the cushion to hedges and optimization: gas realized $68/MWh, a 134% premium to spot.

Revenue & Margin Trajectory

Gross margin as reported.

Share Price — 12 Months

52-week range $12–$18.

Share Price — 12 Months

52-week range $12–$18.

The Numbers

The Model

No projection published for this company. No model projection is available for this company.

The model publishes revenue and EBITDA projections only where the evidence supports them. Where it does not, nothing is shown rather than an estimate.

What’s Next

Looking Ahead

The next 12 months center on converting strategic options into contracts and advancing Centralia. Management expects definitive agreements for Keephills during 2026, seeks AESO underutilized-capacity clarity in the next quarter or so, and targets Centralia Class 3 estimate by end of 2026, FID in Q1 2027, and Colorado closing in Q4 2026.

Catalysts

During 2026Keephills definitive agreements — Tests whether MOU converts to signed PPA and lease terms.
Next quarter or soAESO underutilized-capacity clarity — Tests whether scale beyond the initial 230 MW becomes available.
End of 2026Centralia Class 3 estimate — Tests project cost against the roughly US$600 million plan.
Q1 2027Centralia FID — Tests conversion path with permits and approvals.
Q4 2026Colorado acquisition closing — Tests Canyon Peak Power COD and first post-close contribution.

Numbers

Financials

Annual Summary

Metric	FY2024	FY2025	TTM	YoY
Revenue	$2.1B	$1.7B	$1.6B	-16.7%
Gross Margin	63.6%	46.4%	43.3%	1,723bps
EBITDA	$816M	$447M	$6.0B	-45.2%
EBITDA Margin	39.5%	26.0%	27.3%	1,350bps
Net Income	$171M	−$102M	−$18M	-159.9%
Free Cash Flow	$346M	$287M	$2.4B	—
Net Cash	—	—	—	—

Key Ratios (Trailing)

Valuation

P/E TTM—
EV/EBITDA TTM—
EV/Revenue TTM—
Price/FCF TTM—

Profitability

Gross Margin (TTM)43.3%
EBITDA Margin (TTM)27.3%
Net Margin (TTM)-1.1%
ROIC1.2%
FCF Conversion73.5%
SBC / Revenue0.0%

Reference

The Company

TransAlta is one of Canada's largest publicly traded power generators, owning and operating hydro, wind, solar, battery storage, and thermal generation across Canada, the United States, and Western Australia. Its gas-fired steam units sit at the center of its underutilized-capacity thesis: management says they can run above 90% capacity factor but averaged about 20% in 2025, positioning them to serve data-center load.

The company operates through disclosed segments: Hydro (~922 MW), Wind and Solar (~2,559 MW), Gas (4,525 MW), Energy Transition (~671 MW), Energy Marketing, and Corporate. It also markets and schedules merchant assets, procures and transports natural gas, and provides fee-based asset management to third parties.

Business Segments

Gas

4,525 MW of owned gas-fired capacity

Owned gas-fired capacity across British Columbia, Alberta, Ontario, Michigan, and Western Australia, plus a gas pipeline interest.

Growth driver: Underutilized steam units positioned for data-center load

Wind and Solar

~2,559 MW net wind and solar capacity

Wind and solar across Canada, the U.S., and Western Australia, with a 10 MW battery in Alberta.

Growth driver: Contracted PPAs with Meta and Amazon at 100% of generation

Hydro

~922 MW owned hydroelectric capacity

Hydroelectric capacity in Alberta, British Columbia, and Ontario.

Growth driver: Merchant upside and emissions credits against carbon costs

Competitive Landscape

The main Alberta competitive reference in the supplied material is Pembina Pipeline and Kineticor's Greenlight Electricity Center, which secured 907 MW of grid allocation and was reported as having a 2030 AESO in-service date that management called an outside date, with Kineticor and its customer targeting 2027 or 2028. Pembina appears in two roles: as a customer or contract counterparty and as a competitor or peer.

Pembina Pipeline
Source names it as both a customer or contract counterparty and as a competitor or peer in Alberta data-center power.
Kineticor
Greenlight Electricity Center, with Pembina, secured 907 MW of grid allocation and had a 2030 AESO in-service date; management called that an outside date with Kineticor and its customer targeting 2027 or 2028.

Competitor names are limited to Pembina Pipeline and Kineticor from the supplied material; only the Greenlight Electricity Center is discussed in detail.

Supply Chain

TransAlta sits between power equipment suppliers and large power buyers: it owns generation, transmission-adjacent land, gas supply proximity, and water infrastructure. The supplied material identifies long lead times for turbines, power island, and related equipment, but does not name specific equipment suppliers.