September 2019Repowering - expanding existing assetsBuilding on TransAlta’s transition to clean power, the company is advancing its work on natural gas fired, combined-cycle “Repowering Projects” at its Keephills and Sundance power plants. The Repowering Projects will use the existing steam turbines on two generating units (Keephills 1 and Sundance 5). As well, the Repowering Projects will involve the installation of new combustion turbine generators (“CTG”) and heat recovery steam generators (“HRSG”), creating highly efficient combined-cycle units at each plant site. The output from each repowered unit will be approximately 630 megawatts.Using existing assets will allow us to reduce overall project costs and minimize the environmental footprint of the plants compared with those associated with building a new combined-cycle, gas-fired power plant. The installation of modern power technology and advanced air-quality control systems will result in minimal impacts to the environment.

Maintain presence in Parkland County, AlbertaThe Repowering Projects will extend the lives of existing assets to deliver safe, low-cost and reliable clean energy for Albertans. After successful completion of the Repowering Projects, the operating life of each generating unit (Keephills 1 and Sundance 5) is expected to be 25 years. The Repowering Projects demonstrate TransAlta’s commitment to maintain its presence in Parkland County continuing to contribute to the regional economy for decades to come.

Keephills 1 Repowering Project Sundance 5 Repowering Project

Open House To learn more about the Repowering Projects and to provide your feedback

you’re invited to join us at our open house:Tuesday, October 15, 2019 4:00 – 8:00 p.m.

Keephills Community Hall 51515 Range Road 32A, Parkland County, Alberta

All are welcome to attend. Light refreshments will be served.

Project Information NewsletterRepowering ProjectsPublic consultation

TransAlta is committed to maintaining the strong relationships we have built with communities in the region. Throughout the entire life cycle of the Repowering Projects, from the permitting and consultation phase, through to construction and continuing during operations we will engage and share information with the public.

Indigenous EngagementTransAlta continues to engage and share information with Indigenous communities near our Keephills and Sundance facilities and with other interested communities. We believe in open communication and maintaining positive relationships through continuous engagement.

Questions and AnswersWhat are the economic benefits of these projects?TransAlta is proud to continue to play an important role in the local and regional economies west of Edmonton and in Parkland County. The repowered units are expected to generate electricity for 25 years contributing to the local tax base, maintaining quality jobs, and creating economic opportunities for regional suppliers and service providers.

How many construction and operational jobs will these projects provide?At this stage of the Project, the estimated number of construction workers needed during the peak construction period will be about 300-350 workers. Operations jobs at Sundance and Keephills will continue for 25 years after the successful completion of the Repowering Projects.

What about the Coal-to-Gas Project?TransAlta is continuing to advance the Coal to Gas Conversions Project and has received regulatory approvals from the AUC and AEP for the project on Sundance units 3-6 and Keephills units 1-3. TransAlta issued Final Notice to Proceed for the coal-to-gas conversion on Sundance Unit 6 and the conversion is expected to begin in the first half of 2020.

How will project information be shared?TransAlta will share information about the Repowering Projects through regular newsletters, website updates, our upcoming public open house, and meetings with community organizations and groups.

Questions? Comments? Contact us:If you have any questions about the Repowering Projects, please contact us at:

Email: repowering@transalta.comToll-free: 1-877-636-7822

For more project information, please visit:

https://www.transalta.com

TransAlta is committed to protecting your privacy. Collected personal information will be protected under the Freedom of Information and Protection of Privacy Act. As part of the regulatory permitting process, TransAlta may provide your personal information to provincial regulators and public responses may be reported in our regulatory application, which becomes part of the public record. Personal information we collect may be used to contact you in the future.

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Project DescriptionFor each repowered unit, a new natural gas CTG and HRSG will be installed to produce electricity and steam. The steam will drive the existing Keephills 1 and Sundance 5 STG. The CTGs and HRSGs will be installed in new buildings at each site next to the existing power houses at Keephills and Sundance. The installation of each gas turbine will include the construction of an additional exhaust stack. Each stack is expected to be nearly the same height of the existing power houses at Keephills and Sundance.

This configuration will enable the Keephills 1 and Sundance 5 STGs and associated balance-of-plant equipment to continue to operate as they have in the past. The main exception is the boiler and associated equipment as they will no longer be required. The steam needed for the Keephills 1 and Sundance 5 steam turbines will be sourced from the new HRSGs rather than the boiler.

The new gas turbines will connect to the grid through the existing substation infrastructure at Keephills and Sundance. Existing substation and transmission infrastructure may need modification to accommodate the additional generation.

New Major Equipment Reused Equipment

Gas Combustion Turbine & Generator (CTG)

• Air Compressors

• Fuel Gas Conditioning System

• Lube Oil System

• Inlet/Exhaust Systems

• Generator

Heat Recovery Steam Generator

• Stack

• Duct Burner System

• Recirculation Pump

Selective Catalytic Reduction (SCR)

• On Site Ammonia Tanks

• Ammonia Injection Skid

Other

• Gas Metering Station

Keephills 1 and Sundance 5

• Steam Turbine Generators (STG)

• Generator step-up transformers

• Condensers

• Condensate Extraction Pumps

• Air Ejector and Gland Steam Condensers

• Circulating Water Pumps and Cooling Towers

• Water Treatment Plants

• Air Compressors

• Substations

Environmental ConsiderationsAir emissions

An air quality assessment will be completed and will be part of our amendment applications to Alberta Environment and Parks (“AEP”) to predict the effects of the repowering facilities (Keephills 1 and Sundance 5) on ambient air quality. This assessment will consider the emission controls proposed for the facilities. The assessment will include dispersion modeling to predict ground level concentrations of nitrogen oxides (“NOx”), carbon monoxide, sulphur dioxide, ammonia and fine particulate matter.

A Selective Catalytic Reduction (“SCR”) system is planned for each repowered unit to control NOx and ensure compliance with applicable air emission standards. The SCR will operate with the injection of ammonia in the flue gas stream to adsorb the NOx.

The cumulative effects of the plant emissions (Repowering Keephills 1 and Sundance 5) will be assessed taking into consideration the operating facilities at Sundance and Keephills with existing and approved industrial sources in the study area. The predicted ground level concentrations will be compared to Alberta Ambient Air Quality Objectives.

Noise

The Alberta Utilities Commission (“AUC”) regulates noise from power plants. TransAlta is completing noise modelling on the cumulative effect of operating the repowering facilities and is committed to meeting current regulatory requirements. These results will be confirmed once the noise assessment is finalized as part of the amendment applications to the AUC.

The modelling will be based on international standards and the methods required by the AUC (specifically outlined in the AUC’s Rule 012), and includes the existing “soundscape”, which are the sounds from natural sources and sounds produced from existing facilities such as the Sundance and Keephills plants.

Water

Water use for the Projects is not expected to increase. Existing water licences for the Keephills and Sundance power plants under our existing approvals will remain unchanged.

Regulatory requirementsTransAlta is submitting amendment applications to the AUC and AEP for approvals to construct and operate the repowered facilities (Keephills 1 and Sundance 5). More information about public involvement is found in the brochure, Public Involvement in a Proposed Utility Development, a publication of the AUC included with this project newsletter.

Development and building permits will be filed with Parkland County as required.

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How a combined-cycle power plant works The Repowering Projects will generate electricity using combined-cycle technology with modern generation equipment and advanced air-quality control systems.

1. Gas turbine burns fuel

• The gas turbine compresses air and mixes it with fuel that is ignited. The hot air-fuel mixture moves through the gas turbine blades, making them spin.

• The fast-spinning turbine drives a generator that converts the spinning energy into electricity.

2. Heat recovery system captures exhaust

• HRSG captures exhaust heat from the gas turbine that would otherwise escape through the exhaust stack.

• The HRSG creates steam from the gas turbine exhaust heat and delivers it to the steam turbine.

• Duct burners can be used to generate more steam to increase power output.

3. Existing steam turbine delivers additional electricity

• The steam turbine sends its energy to the generator drive shaft, where it is converted into additional electricity.

GeneratorSteam Turbine

Cooling Pond

HRSGCondenser

Natural GasTransmission

Generator Gas Turbine

Transmission

Air

New Existing

Repowering Projects ScheduleThe current proposed schedule for the project is shown in the table below. Public consultation will commence in September 2019 and regulatory applications are planned to be filed in the fourth quarter of 2019. Upon receipt of approvals, construction is anticipated to commence early in 2021. Construction will take approximately two years for each generating unit (Keephills 1 and Sundance 5) with commissioning and commercial operations in 2023 and 2024. Sundance 5 is the site for the first planned build.

Activity

Environmental Studies and Approvals

Environmental Studies & Assessments

File Regulatory Applications

Permits and Approvalsfrom Regulators

Engagement andConsultation

Repowered Units

Preliminary Engineering& Design

Detailed Engineering

Procurement

Construction

Commissioning

Q32019

Q42019

2020 2021 2022 2023 2024

36

LocationThe Repowering Projects will be located within the fence line of the existing Keephills and Sundance power plant sites located in Parkland County west of Spruce Grove and Stony Plain, Alberta as noted on the map below.

Keephills 1 Repowering Project site locationThe new CTG and HRSG will be located in a new building east of the Keephills 1/2 power plant and west of Keephills 3 as shown in the 3D architectural rendering below.

Sundance 5 Repowering Project site locationThe new CTG and HRSG will be located in a new building on the southwest side of the Sundance power plant as shown in the 3D architectural rendering below.

54

Keephills 1 Repowered Unit

Keephills 3Keephills 1 & 2

Sundance 5 Repowered Unit

Wabamun Lake

PipelineTransAlta is considering the installation of another pipeline for additional supply of gas and will continue to utilize the new Pioneer natural gas pipeline which was completed earlier in 2019. The generating units at Sundance and Keephills are currently receiving gas from this pipeline.

LocationThe Repowering Projects will be located within the fence line of the existing Keephills and Sundance power plant sites located in Parkland County west of Spruce Grove and Stony Plain, Alberta as noted on the map below.

Keephills 1 Repowering Project site locationThe new CTG and HRSG will be located in a new building east of the Keephills 1/2 power plant and west of Keephills 3 as shown in the 3D architectural rendering below.

Sundance 5 Repowering Project site locationThe new CTG and HRSG will be located in a new building on the southwest side of the Sundance power plant as shown in the 3D architectural rendering below.

54

Keephills 1 Repowered Unit

Keephills 3Keephills 1 & 2

Sundance 5 Repowered Unit

Wabamun Lake

PipelineTransAlta is considering the installation of another pipeline for additional supply of gas and will continue to utilize the new Pioneer natural gas pipeline which was completed earlier in 2019. The generating units at Sundance and Keephills are currently receiving gas from this pipeline.

How a combined-cycle power plant works The Repowering Projects will generate electricity using combined-cycle technology with modern generation equipment and advanced air-quality control systems.

1. Gas turbine burns fuel

• The gas turbine compresses air and mixes it with fuel that is ignited. The hot air-fuel mixture moves through the gas turbine blades, making them spin.

• The fast-spinning turbine drives a generator that converts the spinning energy into electricity.

2. Heat recovery system captures exhaust

• HRSG captures exhaust heat from the gas turbine that would otherwise escape through the exhaust stack.

• The HRSG creates steam from the gas turbine exhaust heat and delivers it to the steam turbine.

• Duct burners can be used to generate more steam to increase power output.

3. Existing steam turbine delivers additional electricity

• The steam turbine sends its energy to the generator drive shaft, where it is converted into additional electricity.

GeneratorSteam Turbine

Cooling Pond

HRSGCondenser

Natural GasTransmission

Generator Gas Turbine

Transmission

Air

New Existing

Repowering Projects ScheduleThe current proposed schedule for the project is shown in the table below. Public consultation will commence in September 2019 and regulatory applications are planned to be filed in the fourth quarter of 2019. Upon receipt of approvals, construction is anticipated to commence early in 2021. Construction will take approximately two years for each generating unit (Keephills 1 and Sundance 5) with commissioning and commercial operations in 2023 and 2024. Sundance 5 is the site for the first planned build.

Activity

Environmental Studies and Approvals

Environmental Studies & Assessments

File Regulatory Applications

Permits and Approvalsfrom Regulators

Engagement andConsultation

Repowered Units

Preliminary Engineering& Design

Detailed Engineering

Procurement

Construction

Commissioning

Q32019

Q42019

2020 2021 2022 2023 2024

36

Project DescriptionFor each repowered unit, a new natural gas CTG and HRSG will be installed to produce electricity and steam. The steam will drive the existing Keephills 1 and Sundance 5 STG. The CTGs and HRSGs will be installed in new buildings at each site next to the existing power houses at Keephills and Sundance. The installation of each gas turbine will include the construction of an additional exhaust stack. Each stack is expected to be nearly the same height of the existing power houses at Keephills and Sundance.

This configuration will enable the Keephills 1 and Sundance 5 STGs and associated balance-of-plant equipment to continue to operate as they have in the past. The main exception is the boiler and associated equipment as they will no longer be required. The steam needed for the Keephills 1 and Sundance 5 steam turbines will be sourced from the new HRSGs rather than the boiler.

The new gas turbines will connect to the grid through the existing substation infrastructure at Keephills and Sundance. Existing substation and transmission infrastructure may need modification to accommodate the additional generation.

New Major Equipment Reused Equipment

Gas Combustion Turbine & Generator (CTG)

• Air Compressors

• Fuel Gas Conditioning System

• Lube Oil System

• Inlet/Exhaust Systems

• Generator

Heat Recovery Steam Generator

• Stack

• Duct Burner System

• Recirculation Pump

Selective Catalytic Reduction (SCR)

• On Site Ammonia Tanks

• Ammonia Injection Skid

Other

• Gas Metering Station

Keephills 1 and Sundance 5

• Steam Turbine Generators (STG)

• Generator step-up transformers

• Condensers

• Condensate Extraction Pumps

• Air Ejector and Gland Steam Condensers

• Circulating Water Pumps and Cooling Towers

• Water Treatment Plants

• Air Compressors

• Substations

Environmental ConsiderationsAir emissions

An air quality assessment will be completed and will be part of our amendment applications to Alberta Environment and Parks (“AEP”) to predict the effects of the repowering facilities (Keephills 1 and Sundance 5) on ambient air quality. This assessment will consider the emission controls proposed for the facilities. The assessment will include dispersion modeling to predict ground level concentrations of nitrogen oxides (“NOx”), carbon monoxide, sulphur dioxide, ammonia and fine particulate matter.

A Selective Catalytic Reduction (“SCR”) system is planned for each repowered unit to control NOx and ensure compliance with applicable air emission standards. The SCR will operate with the injection of ammonia in the flue gas stream to adsorb the NOx.

The cumulative effects of the plant emissions (Repowering Keephills 1 and Sundance 5) will be assessed taking into consideration the operating facilities at Sundance and Keephills with existing and approved industrial sources in the study area. The predicted ground level concentrations will be compared to Alberta Ambient Air Quality Objectives.

Noise

The Alberta Utilities Commission (“AUC”) regulates noise from power plants. TransAlta is completing noise modelling on the cumulative effect of operating the repowering facilities and is committed to meeting current regulatory requirements. These results will be confirmed once the noise assessment is finalized as part of the amendment applications to the AUC.

The modelling will be based on international standards and the methods required by the AUC (specifically outlined in the AUC’s Rule 012), and includes the existing “soundscape”, which are the sounds from natural sources and sounds produced from existing facilities such as the Sundance and Keephills plants.

Water

Water use for the Projects is not expected to increase. Existing water licences for the Keephills and Sundance power plants under our existing approvals will remain unchanged.

Regulatory requirementsTransAlta is submitting amendment applications to the AUC and AEP for approvals to construct and operate the repowered facilities (Keephills 1 and Sundance 5). More information about public involvement is found in the brochure, Public Involvement in a Proposed Utility Development, a publication of the AUC included with this project newsletter.

Development and building permits will be filed with Parkland County as required.

72

September 2019Repowering - expanding existing assetsBuilding on TransAlta’s transition to clean power, the company is advancing its work on natural gas fired, combined-cycle “Repowering Projects” at its Keephills and Sundance power plants. The Repowering Projects will use the existing steam turbines on two generating units (Keephills 1 and Sundance 5). As well, the Repowering Projects will involve the installation of new combustion turbine generators (“CTG”) and heat recovery steam generators (“HRSG”), creating highly efficient combined-cycle units at each plant site. The output from each repowered unit will be approximately 630 megawatts.Using existing assets will allow us to reduce overall project costs and minimize the environmental footprint of the plants compared with those associated with building a new combined-cycle, gas-fired power plant. The installation of modern power technology and advanced air-quality control systems will result in minimal impacts to the environment.

Maintain presence in Parkland County, AlbertaThe Repowering Projects will extend the lives of existing assets to deliver safe, low-cost and reliable clean energy for Albertans. After successful completion of the Repowering Projects, the operating life of each generating unit (Keephills 1 and Sundance 5) is expected to be 25 years. The Repowering Projects demonstrate TransAlta’s commitment to maintain its presence in Parkland County continuing to contribute to the regional economy for decades to come.

Keephills 1 Repowering Project Sundance 5 Repowering Project

Open House To learn more about the Repowering Projects and to provide your feedback

you’re invited to join us at our open house:Tuesday, October 15, 2019 4:00 – 8:00 p.m.

Keephills Community Hall 51515 Range Road 32A, Parkland County, Alberta

All are welcome to attend. Light refreshments will be served.

Project Information NewsletterRepowering ProjectsPublic consultation

TransAlta is committed to maintaining the strong relationships we have built with communities in the region. Throughout the entire life cycle of the Repowering Projects, from the permitting and consultation phase, through to construction and continuing during operations we will engage and share information with the public.

Indigenous EngagementTransAlta continues to engage and share information with Indigenous communities near our Keephills and Sundance facilities and with other interested communities. We believe in open communication and maintaining positive relationships through continuous engagement.

Questions and AnswersWhat are the economic benefits of these projects?TransAlta is proud to continue to play an important role in the local and regional economies west of Edmonton and in Parkland County. The repowered units are expected to generate electricity for 25 years contributing to the local tax base, maintaining quality jobs, and creating economic opportunities for regional suppliers and service providers.

How many construction and operational jobs will these projects provide?At this stage of the Project, the estimated number of construction workers needed during the peak construction period will be about 300-350 workers. Operations jobs at Sundance and Keephills will continue for 25 years after the successful completion of the Repowering Projects.

What about the Coal-to-Gas Project?TransAlta is continuing to advance the Coal to Gas Conversions Project and has received regulatory approvals from the AUC and AEP for the project on Sundance units 3-6 and Keephills units 1-3. TransAlta issued Final Notice to Proceed for the coal-to-gas conversion on Sundance Unit 6 and the conversion is expected to begin in the first half of 2020.

How will project information be shared?TransAlta will share information about the Repowering Projects through regular newsletters, website updates, our upcoming public open house, and meetings with community organizations and groups.

Questions? Comments? Contact us:If you have any questions about the Repowering Projects, please contact us at:

Email: repowering@transalta.comToll-free: 1-877-636-7822

For more project information, please visit:

https://www.transalta.com

TransAlta is committed to protecting your privacy. Collected personal information will be protected under the Freedom of Information and Protection of Privacy Act. As part of the regulatory permitting process, TransAlta may provide your personal information to provincial regulators and public responses may be reported in our regulatory application, which becomes part of the public record. Personal information we collect may be used to contact you in the future.

18