TransAlta Corporation’s subsidiary, Alberta Power (2000) Ltd., announced that Sheerness Unit 1 will be temporarily mothballed effective April 1 2026. The unit, which is currently in service, will remain online through the winter season but will be taken offline for up to two years. The decision preserves the unit’s long‑term optionality while allowing the company to respond to future market fundamentals or contracting opportunities.
Sheerness Unit 1 is a 1,200‑MW natural‑gas plant that contributes a significant portion of TransAlta’s Alberta thermal capacity. Mothballing the unit will reduce the company’s total Alberta capacity by that amount, but Unit 2 will remain fully in service, ensuring that the plant’s overall output is only modestly impacted. The move is a deliberate cost‑control measure designed to avoid unnecessary maintenance and operating expenses during a period of low Alberta spot prices.
The mothballing follows a challenging Q3 2025 earnings period in which TransAlta reported a net loss of $0.02 per share, missing analyst expectations of $0.07, and revenue of $615 million, down 27.6% from the $849 million forecast. The miss was driven by a sharp decline in Alberta spot power prices, which eroded the company’s revenue and margin profile. By taking Unit 1 offline, TransAlta can reduce operating costs and preserve cash while maintaining the ability to recommission the asset if market conditions improve.
CEO John Kousinioris said the decision is a “prudent financial move” that preserves long‑term optionality and aligns with the company’s strategy of shifting toward a higher proportion of contracted cash flows. He also announced his retirement effective April 30 2026, with CFO Joel Hunter slated to succeed him. The leadership transition underscores the company’s focus on disciplined execution and strategic realignment.
The mothballing is part of TransAlta’s broader effort to manage exposure to the oversupplied Alberta merchant market while positioning its legacy assets for future data‑center demand. The company has secured a 230‑MW demand‑transmission service contract with the Alberta Electric System Operator to support its data‑center integration program, and it remains committed to a 100 % renewable and natural‑gas generation mix by 2025 and a 75 % reduction in CO₂e emissions by 2026. These initiatives signal a long‑term shift toward higher‑margin, contracted revenue streams, even as the company navigates short‑term market headwinds.
The decision to mothball Unit 1 reflects a strategic balance between cost discipline and maintaining flexibility. While the move reduces immediate capacity, it positions TransAlta to capitalize on future opportunities in a recovering market or new contractual arrangements, thereby supporting the company’s long‑term growth prospects.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.