Brookfield Renewable to commission 18GW of renewables in next three years

“We expect annual demand from large technology companies to accelerate meaningfully, increasing by more than three times by the mid to latter part of this decade on the back of growth in expected Generative AI computing demand. These technology companies are already the largest corporate procurers of Green Power globally,” said Connor Teskey, CEO of Brookfield Renewable, during a conference call for the second quarter of 2023 results.

The company continues to accelerate the growth of its expected commissioned portfolio as it had announced during Q3 2022 that it expected to add 10GW of renewable energy in the next three years.

During the first half of the year, the company commissioned 1.5GW of renewable development, including the final phase of a 1.2GW solar PV project in Brazil, and expects to reach 5GW for 2023. As of 30 June 2023, Brookfield Renewable has a portfolio of 4.4GW of utility-scale solar operational, representing 15% of the company’s portfolio, with hydroelectric encompassing more than half of the installed capacity, followed by wind with 20%.

One of the markets the company has increased its portfolio in Q2 2023 was the US with the acquisition of US utility Duke Energy’s renewables arm for US$2.8 billion, and a portfolio of renewables combining nearly 6GW of capacity. Once the acquisition closed, Brookfield Renewable will bring its operational renewable assets to 14GW in the US and with 76GW of development capacity.

This is not the company’s biggest asset acquisition in the US as last year it added the portfolio of clean power developer Urban Grid’s 13GW of utility-scale solar pipeline and 7GW of energy storage across 12 states or the double acquisition of South Clean Energy (Scout) and Standard Solar in September 2022.

“We continue to scale our business in line with the growth in the sector as shown through our growth in commission capacity, our repowering projects and acquisition. We were successful this quarter signing transactions for almost 1.3 billion of equity investment alongside our institutional partners,” said Teskey.

The company does not close the door to more mergers and acquisitions if the opportunity arises, rather than wait until it closes the current acquisitions it has ongoing, added Teskey.

“Given the significant demand we’re seeing for corporate contracts for green power PPAs, we continue to see very attractive risk return dynamics in developers. So we certainly aren’t going to take our foot off the gas in terms of the growth we’re pursuing in that segment, because the investments we’ve done to-date are performing well, if not ahead of underwriting and we think the tailwinds are going to get stronger.”

Revenue from the solar portfolio is nearly flat year-on-year with US$110 million in Q2 2023, down from US$112 million in Q2 2022, however the adjusted EBITDA is up from US$104 million to US$107 million in Q2 2023. Similar trend for the whole of the company with revenues slightly down year-on-year from US$1,274 million registered in Q2 2022 to US$1,205 million this year’s Q2, while funds from operations are up year-on-year from US$294 million to US$312 million in Q2 2023.

Connor Teskey, CEO of Brookfield Renewable, said: “Our ability to execute and drive growth across the development spectrum is a testament to our diverse and global franchise. Corporate demand for green power continues to accelerate, creating an environment that will increasingly differentiate market participants and favour businesses like ours that have the ability to provide a wide set of scale green power and decarbonisation solutions.”

Conference call transcript from Seeking Alpha.