Calpine Corp.

Overview Key strengths Key risks Broad geographic diversity of wholesale power operations. Weaker business risk than peers Vistra Corp. and NRG Energy Inc. because of its smaller retail footprint. Majority of economic generation through 2025 is hedged, which provides cash flow predictability and uplift in EBITDA. Higher exposure to volatile commodity markets than peers due to its relatively larger wholesale power business. Higher S&P Global Ratings-adjusted free operating cash flow (FOCF) to debt than its peers. Higher financial leverage than peers and volatile gas prices over our forecast period. In 2023 Calpine?s commodity margins improved by about 20% relative to 2022 due to higher realized sparks spreads. The company continued to demonstrate stable margins in 2023, largely due to its

...We expect stable performance from Calpine Corp. through our forecast period. In 2023 Calpine's commodity margins improved by about 20% relative to 2022 due to higher realized sparks spreads. The company continued to demonstrate stable margins in 2023, largely due to its still heavily hedged book at the start of the year. We expect Calpine's significant FOCF generation in recent years will continue in 2024 and 2025, and the company will continue to benefit from elevated power prices and spark spreads given...

Full Report