---

EDMONTON, Alberta – At its 12th annual Investor Day event being held in a virtual format today, Capital Power Corporation (TSX: CPX) (“Capital Power” or “the Company”) will provide updates on the execution of its growth and sustainability strategy including the repowering of its Genesee units 1 and 2 and being off-coal in 2023.

“Capital Power has been following a strategy towards a low carbon future with a target to be net carbon neutral before 2050,” said Brian Vaasjo, President and CEO of Capital Power. “Today’s announcements reflect the resiliency of our strategy and our drive to innovate and optimize, which have enabled us to accelerate to that low carbon future. With the repowering of the Genesee 1 and 2 units utilizing best-in-class technology, they will be the most efficient natural gas combined cycle units in Canada, allowing us to be off-coal in 2023 and directly delivering 3.4 megatonnes of annual carbon emission reductions at Genesee. As we progress towards a low carbon future, Capital Power will provide support for the Genesee community and employees as the Genesee facility transitions to a natural gas facility.”

“2020 has been a monumental year in renewable development for Capital Power delivering 426 megawatt (MW) to our fleet by the end of 2022, confirmation of our solar competitiveness, resulting in solar becoming a more prominent part of our portfolio going forward,” added Mr. Vaasjo. “We continue to make significant progress on our renewables growth strategy with the execution of a 25-year contract for our Strathmore Solar project in Alberta with a large investment grade Canadian company. We continue to see strong interest from companies seeking contracted renewable opportunities and we are, therefore, moving ahead with our 75 MW Enchant Solar project, the seventh renewable project in our construction pipeline.”

Genesee repowering delivers long-term value

Capital Power is proceeding with its plans to repower Genesee units 1 and 2 located in Alberta. A summary of the project:

• Expected capital cost of $997 million with project returns expected to exceed the Company’s hurdle rates and contributing approximately $0.70 in annual adjusted funds from operation (AFFO) per share on average in the first five full years,
• Provides additional 560 megawatts of net capacity totalling 1,360 MW,
•  Simple cycle units will be completed first, allowing the units to run in simple cycle mode before the expected completion of the repowering of unit 1 in 2023 and unit 2 in 2024, avoiding any downtime,
• Utilizing best-in-class natural gas combined cycle technology from Mitsubishi,
• 30% hydrogen ready when repowering completed and upgradable to 95% in the future at minimal cost,
• Carbon conversion ready,
• Dual-fuel upgrades will only continue at Genesee 3, which will be 100% natural gas-fueled by 2023,
• Reduces the carbon intensity of Genesee 1 and 2 to 0.35 tonnes CO2e/MWh, below the Alberta Technology Innovation and Emissions Reduction (TIER) regulation benchmark of 0.37 tonnes CO2e/MWh,
• Following gas conversion and repowering, physical carbon dioxide emissions at the Genesee facility will be approximately 3.4 million tonnes per year lower than 2019 emission levels, with an additional estimated indirect 2.5 million tonne annual reduction from displacement of less efficient units in the Alberta market.

25-year Power Purchase Agreement (PPA) executed for Strathmore Solar project

In November 2020, Capital Power executed a 25-year PPA with a large national Canadian company for all the energy and renewable energy credits generated by its Strathmore Solar project. Strathmore Solar is a 40.5 megawatt project located in Strathmore, Alberta, that is currently under construction with commercial operations expected in early 2022.

Enchant Solar project proceeding

Subject to successful permitting and regulatory approvals, Capital Power is moving forward with the Enchant Solar project, located within the municipal district of Taber, Alberta. The project will add 75 megawatts in the back half of 2022 with an expected capital cost between $90 million to $100 million.

Enchant Solar will generate carbon credits that can be used to hedge against Capital Power’s carbon compliance costs from its Alberta thermal generation facilities. The Company expects a portion of the output from Enchant Solar to be sold under renewable offtake contracts and is actively pursuing contracting opportunities. Annual adjusted EBITDA and AFFO is expected to average approximately $11 million and $12 million, respectively, over the first five years of the project.

C2CNT and Genesee Carbon Conversion Centre

Capital Power is planning to exercise its option to increase its interest in C2CNT from 25% to 40%, in December 2020. The design phase of the Genesee Carbon Conversion Centre is underway with commercial operations of the 2,500 tonne carbon nanotube facility in the fourth quarter of 2021.

2020 outlook and 2021 operating and financial targets

The financial outlook for 2020 is generally unchanged and stable for 2021.

Operational

• Capacity-weighted average facility availability of 93%,
• Sustaining capital expenditures of $80 million to $90 million.

Financial

• AFFO of $500 million to $550 million, based on 21% of the Alberta commercial baseload generation portfolio sold forward at an average contracted price in the high-$50 per megawatt hour range,
• Adjusted EBITDA of $975 million to $1,025 million, and
• Dividend growth guidance unchanged with a 7% increase in the common share dividend.

Growth from development and construction projects

• Continue progress on the development and construction of seven renewable projects totaling 426 megawatts, to be on-budget (total capital cost of $665 million) and on-time with various commercial operation dates targeted for fourth quarter of 2021 to fourth quarter 2022,
• Genesee repowering proceeds on time and on budget, and
• $500 million committed capital for growth.

Investor Day event webcast

Today’s virtual morning event is scheduled to start at 9:30 am (ET) and can be accessed on the Company’s website at www.capitalpower.com. The webcast will be archived and accessible for replay.

Non-GAAP Financial Measures

The Company uses (i) earnings before net finance expense, income tax expense, depreciation and amortization, impairments, foreign exchange gains or losses, finance expense and depreciation expense from joint venture interests, gains or losses on disposals and unrealized changes in fair value of commodity derivatives and emission credits (adjusted EBITDA), (ii) adjusted funds from operations (AFFO), and (iii) adjusted funds from operations per share as financial performance measures.

These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of the Company’s results of operations from management’s perspective.

Additional disclosure around the Company’s non-GAAP financial measures, including reconciliations of these non-GAAP financial measures to their nearest GAAP financial measures are disclosed in the Company’s Management’s Discussion and Analysis prepared each quarter, most recently prepared as of October 30, 2020 for the third quarter of 2020, which is available under the Company’s profile on SEDAR at SEDAR.com and on the Company’s website at capitalpower.com.

Forward-looking Information

Forward-looking information or statements included in this press release are provided to inform the Company’s shareholders and potential investors about management’s assessment of Capital Power’s future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

Material forward-looking information in this press release includes disclosures regarding: (i) timing, expected capital costs, project returns (including expected AFFO per share), and environmental benefits (including the expected reduction in emission levels) of the Genesee repowering project, (ii) timing of completion of Strathmore Solar, (iii) timing, expected capital costs, and financial performance (including expected AFFO and adjusted EBITDA impacts) of Enchant Solar, (iv) expected completion date of the Genesee Carbon Conversion Centre, and (v) targets for 2021 including operational, growth and financial targets.

These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate including its review of purchased businesses and assets. The material factors and assumptions used to develop these forward-looking statements relate to: (i) electricity, other energy and carbon prices, (ii) operating and asset development performance, (iii) business prospects (including potential re-contracting opportunities) and opportunities including expected growth and capital projects, (iv) status of and impact of policy, legislation and regulations, (v) effective tax rates and (vi) foreign exchange rates.

Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations. Such material risks and uncertainties are: (i) changes in electricity prices in markets in which the Company operates, (ii) changes in energy commodity market prices and use of derivatives, (iii) regulatory and political environments including changes to environmental, financial reporting, market structure and tax legislation, (iv) generation facility availability, wind capacity factor and performance including maintenance expenditures, (v) ability to fund current and future capital and working capital needs, (vi) timing and costs of regulatory approvals and construction in relation to development projects, (vii) changes in market prices and availability of fuel, and (viii) changes in general economic and competitive conditions. See Risks and Risk Management in the Company’s Management’s Discussion and Analysis for both the nine months ended September 30, 2020, prepared as of October 30, 2020 and for the year ended December 31, 2019, prepared as of February 21, 2020, for further discussion of these and other risks.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

About Capital Power

Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, owns, and operates power generation facilities using a variety of energy sources. Capital Power owns approximately 6,500 megawatts (MW) of power generation capacity at 28 facilities across North America. Approximately 425 MW of owned generation capacity is in advanced development in Alberta and North Carolina.