Brookfield Renewable Partners Lp · TSX:BEP.UN
Brookfield Renewable Partners Lp — Investor Day (September 2021)
73 slides from Brookfield Renewable Partners Lp's investor day presentation, September 2021
Slide 1: 2021 Investor Day
Slide 2: Brookfield Renewable September 2021
Brookfield Renewable September 2021
Slide 3: Agenda
Agenda The decarbonization opportunity 4 Overview and growth 20 Spotlight on development 41 Financial update 53 Key takeaways and Q&A 70
Slide 4: The decarbonization opportunity
The decarbonization opportunity Mark Carney, Vice Chair
Slide 5: Decarbonization is a global imperative
Decarbonization is a global imperative Canada committed U.K. committed to emissions reductions of at least 68% to reduce emissions below 1990 levels by 2030 by at least 40–45% E.U. agreed to reduce emissions to at least 55% below 1990 below 2005 levels levels by 2030 by 2030 U.S. reentered the China
Slide 6: Decarbonization has accelerated significantly over the last 18 months
Decarbonization has accelerated significantly over the last 18 months 6
Slide 7: Emissions covered by net-zero commitments
Emissions covered by net-zero commitments 70% 2.5x Emissions covered 30% Jan 2020 Jul 2021 Source: Climate Action Tracker. 7
Slide 8: Countries with net-zero commitments
Countries with net-zero commitments 131 6x Countries 21 Jan 2020 Jul 2021 Source: Climate Action Tracker. 8
Slide 9: Companies with net-zero commitments
Companies with net-zero commitments 3,067 3x Companies 992 Jan 2020 Jul 2021 Source: United Nations Climate Change, Race to Zero. 9
Slide 10: Financial commitments to net zero
Financial commitments to net zero $88T 18x Commitments $5T Jan 2020 Jul 2021 Source: Glasgow Financial Alliance for Net Zero (GFANZ). 10
Slide 11: Net zero is achievable
Net zero is achievable 60% of current carbon emissions can be abated with today’s commercially viable technologies Source: Goldman Sachs Global Investment Research. 11
Slide 12: Net zero requires immediate transformational change
Net zero requires immediate transformational change The Path to Net-Zero Historical Pathway for Net-Zero Emissions in 2050 Current Policy Projections Global Greenhouse Gas Emissions (Gt CO2e/year) 60 50 45% carbon reduction from 2010 needed to 40 manage global warming within 1.5°C 30 20 10 Net zero
Slide 13: Enormous investment is required
Enormous investment is required $3.5–5T $300B Historical Projected Annual Investment Annual Investment to Support in Renewable Power Decarbonization of Energy Generation Systems Over the Next 30 Years Source: IPCC, International Energy Agency (IEA), Global Financial Markets Association (GFMA), and B
Slide 14: We are at the beginning of a whole-economy transition
We are at the beginning of a whole-economy transition Electricity Transport Oil, gas and Commodities grids energy Renewables EV, batteries, Green hydrogen Green steel and displacing coal storage and and carbon ammonia and heavy fuels charging capture systems 14
Slide 15: All sectors will be impacted
All sectors will be impacted CO2 Emissions Reductions by Sector Required to Meet Paris Agreement Temperature Goal 2040-50 2030-40 2019-30 15 10 Gt CO₂ 5 2019 2050 2019 2050 2019 2050 2019 2050 Power Industry Transport Buildings Source: International Energy Agency (2020), World Energy Outlook 2020, P
Slide 16: Unparalleled commercial opportunity of $150+ trillion of total investment
Creating an unparalleled commercial opportunity of $150+ trillion of total investment over the next 30 years Source: GFMA and BCG. 16
Slide 17: Clean energy and electrification are the first, largest steps to net zero
Clean energy and electrification are the first, largest and most impactful steps to achieving net zero 17
Slide 18: ~75% of emissions are attributed to energy and power generation
~75% of emissions are attributed to energy and power generation Global GHG Emissions 5% 3% Industrial Processes Waste 19% Agriculture, Forestry 73% & Land Use Energy and Power Generation 24% Energy in Industry 18% Energy in Buildings 16% Energy in Transport 15% Energy in Other Source: Climate Watch,
Slide 19: Decarbonization is a value-creation opportunity
Decarbonization is a value-creation opportunity • A global imperative that has accelerated over the last 18 months • Requires a whole-economy transition • Creating the greatest economic opportunity of our time with significant capital required • Clean energy capabilities will be essential, and solut
Slide 20: Overview and growth
Overview and growth Connor Teskey, Chief Executive Officer
Slide 21: A global clean energy supermajor
A global clean energy supermajor NORTH AMERICA EUROPE • Global scale and reach 12,500 MW 20,600 MW • Leadership in all major technologies • Leading operating and development capabilities • Investment-grade balance sheet SOUTH AMERICA • Best-in-class growth 12,600 MW capabilities ASIA PACIFIC 5,700 M
Slide 22: Leading platforms across all major technologies
Leading platforms across all major technologies Hydro Wind Solar Transition 8,000 MW 5,000 MW 2,200 MW 4,800 MW Operational Operational Operational Operational 2,600 MW 8,600 MW 17,300 MW 2,900 MW Development Development Development Development 22
Slide 23: Supported by deep operational and development expertise
Supported by deep operational and development expertise 3,000 140+ ~6,000 24x7 Operating Power marketing Renewable Renewable power employees in 21 experts generating facilities capabilities offices globally 23
Slide 24: A strong balance sheet
A strong balance sheet BBB+ $3.3B Investment-grade Available balance sheet liquidity 24
Slide 25: Increased pace of growth: $7 billion of equity deployed since 2012
Increased pace of growth… Deployed $7 billion of equity capital since 2012 $7 $6 $5 $4 $3 $2 $1 $- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cumulative equity deployed, net to BEP. Each year is presented on an LTM (last twelve months) basis. 25
Slide 26: Over the last twelve months
Over the last twelve months Distributed Repowering Offshore Wind Corporate Generation Partnership 26
Slide 27: Translating into strong cash flows
Translating into strong cash flows 10%+ $1.45 CAGR $0.48 2010 2020 Represents normalized FFO per share. 27
Slide 28: Growing distributions for our investors
Growing distributions for our investors 6%+ CAGR $1.22 $0.67 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 28
Slide 29: Tailwinds for renewables and energy transition are stronger than ever
Tailwinds for renewables and energy transition are stronger than ever 29
Slide 30: What is driving this?
What is driving this? Decarbonization Competitive targets cost structure 30
Slide 31: What is driving this?
What is driving this? Decarbonization Competitive Increasing targets cost structure clean energy demand 31
Slide 32: Wind and solar offer actionable and economic solutions now
Wind and solar offer actionable and economic solutions now And will be even more compelling in the future 200 150 $ per MWh 100 50 0 2014 2021 2030 Solar PV Onshore Wind Gas Coal Post 2021 assumes $50/tonne carbon price. 32
Slide 33: Electrification is driving increased electricity demand
Electrification is driving increased electricity demand U.S. electricity consumption is projected to increase by up to 80% by 2050 8,000 +80% Annual Electricity Consumption (TWh) Commercial Residential 4,000 Industrial Transportation 0 2018 2050 High Case Source: NREL. 33
Slide 34: Demand for corporate green power is stronger than ever
Demand for corporate green power is stronger than ever Global Green Corporate PPA Volumes 30 Annual Volume (GW) 20 6X 10 0 2016 2020 Source: Bloomberg New Energy Finance. 34
Slide 35: Generation growth is coming from renewables
Generation growth is coming from renewables Renewables in line to be >90% of U.S. electricity generation by 2050 70 60 50 Thousand TWh 40 30 20 10 0 2010 2020 2030 2040 2050 Fossil fuels Nuclear Renewables Source: IEA. 35
Slide 36: Our strategy will not change but it is growing
In this environment, our strategy will not change…. but it is growing 36
Slide 37: We remain differentiated
We remain differentiated Using our competitive advantages to generate 12–15% returns Global Clean Energy Scale Reach Capabilities 37
Slide 38: Our business has evolved over the years
Our business has evolved over the years Energy Green Renewables Wind and Solar Development Transition Hydrogen M&A 1980s 2015 38
Slide 39: Staying close to emerging customer solutions
We are staying close to emerging customer solutions Energy Transition Green Hydrogen Green energy Clean energy expertise procurement Large-scale capital Sector-specific Development objectives capabilities 39
Slide 40: Largest opportunity set to date
Largest opportunity set to date We are increasing our targeted annual equity deployment to $1—1.2 billion Best-in-class Growing New and global energy green energy incremental platform tailwinds growth avenues 40
Slide 41: Spotlight on development
Spotlight on development Ruth Kent, Chief Operating Officer
Slide 42: Differentiated development capabilities translate into growth opportunities
Our differentiated development capabilities have translated into meaningful growth opportunities at premium returns 42
Slide 43: Leading 31 GW global development pipeline
Established a leading 31 GW global development pipeline Geography Technology Stage North Energy Transition Under Construction Asia Pacific America Hydrogen 8% 9% 14% 34% 1% Early/Mid Advanced Hydro Stage Stage 8% 15% 76% Latin America 23% Wind 28% Solar Europe 55% 29% 43
Slide 44: A growing and diverse development pipeline
A growing and diverse development pipeline 2015 2021 Hydro 0.6 GW 2.6 GW Onshore wind 2.7 GW 5.8 GW Utility-scale solar -- 17.3 GW Offshore wind -- 3.0 GW Distributed generation solar -- 2.3 GW Other energy transition -- 0.2 GW Green hydrogen -- 0.2 GW Total development pipeline ~3 GW 10x ~31 GW 44
Slide 45: Providing decarbonization solutions for corporates
Providing decarbonization solutions for corporates 5X 2011 2022 Annual generation contracted with corporates, presented on a consolidated basis. 45
Slide 46: Supported by deep development and operational expertise
Supported by deep development and operational expertise Our multifaceted capabilities are critical to providing value-add solutions 3,000 Operating and Strong Global Five Centralized Equipment Development Employees Relationships with Control Centers Procurement Across 21 Offices Top-Tier OEMs Fully
Slide 47: Capabilities allow attractive, risk-adjusted returns
Capabilities allow us to generate attractive, risk-adjusted returns Risk Engineering Procurement Route to market Development Expertise Brookfield Renewable Returns 47
Slide 48: Shepherds Flat Repowering Opportunity
Shepherds Flat Repowering Opportunity 48
Slide 49: Our capabilities in action
Our capabilities in action Shepherds Flat (Wind) Janauba (Solar) Masson (Green hydrogen) 400 GWh 1,200 MW 425,000 GJ Repowering opportunity will One of the largest solar Green hydrogen for Enbridge’s increase generation by 25% developments globally Gazifère distribution network 49
Slide 50: $8 billion invested building ~7 gigawatts at 15–20% returns
We have invested $8 billion into building ~7 gigawatts to date at 15–20% returns Represents development to date and inclusive of projects commissioned through X-Elio. 50
Slide 51: We have secured 8 GW of development over the next three years
We have secured 8 GW of development over the next three years Upside potential from the balance of our 31 GW global pipeline 3x 2x 2016 2017 2018 2019 2020 2021F 2022F 2023F Solar Wind Hydro Other Capacity in gigawatts (cumulative since 2003). 51
Slide 52: Long runway for M&A and organic growth
Long runway for M&A and organic growth Growing demand Global team In place pipeline for clean energy providing opportunities differentiated solutions 52
Slide 53: Financial update
Financial update Wyatt Hartley, Chief Financial Officer
Slide 54: What makes BEP a must-own renewable stock?
What makes BEP a must-own renewable stock? Differentiated Self-Funding Secured Cash Growth Model Flow Growth Capabilities 54
Slide 55: Access to flexible and diverse funding sources
We have access to flexible and diverse funding sources 55
Slide 56: Strong balance sheet with ample liquidity
Underpinned by a strong balance sheet with ample liquidity BBB+ $3.3B Investment-grade Available balance sheet liquidity 56
Slide 57: Expected funding sources over the next five years
Expected funding sources over the next five years ~$1,000M ~$1,000M Corporate Debt Preferred Units ~$1,500M Asset-Level Up-Financings $6B Estimated Cost ~5% ~$300M ~$2,200M Retained Cash Flows Asset Sales Projected available pools of capital based on target annual equity deployment of $1 – 1.2 billi
Slide 58: Capital recycling is creating value
Capital recycling is creating value 1 Invest or 15%+ Returns develop on a value basis 3 2 Sell to lower Optimize cost of capital cash buyer flows 12–15% Target Returns 58
Slide 59: We create value by building platforms
We create value by building platforms As exemplified by the recent sale of our Irish wind business • Acquired in 2014 • Doubled capacity to 700 megawatts • Established 1-gigawatt development pipeline • Built fully integrated platform • Sold to strategic buyer, generating 15%+ return over an eight-ye
Slide 60: Translating into additional FFO
Translating into additional FFO $1.5 billion $1.5 billion $120 million Generated over the Reinvested FFO last three years Realized 20% return 12–15% Target return Average 7% Average 15% FFO yield FFO yield 60
Slide 61: Highly resilient cash flows with 10%+ FFO per-unit growth
We have highly resilient cash flows with visibility to continue to deliver 10%+ FFO per-unit growth 61
Slide 62: Highly resilient cash flows
Highly resilient cash flows Contracted Diversified De-Risked 14-year average PPA term No single market >10% No material FX or interest rate exposure 62
Slide 63: Multiple levers to deliver 10%+ FFO per-unit growth
Multiple levers to deliver 10%+ FFO per-unit growth 10%+ FFO per- unit growth 1–2% 2–4% 3–5% Up to 9% Inflation Margin Development M&A Escalation Enhancement Pipeline Activities 2021 2026 63
Slide 64: Business benefits from an inflationary environment
Our business benefits from an inflationary environment Inflation escalation is expected to generate up to 2% FFO per-unit growth Revenues ($ million) 2,400 % indexed to inflation ~70% Expected margin 55%+ Estimated long-term inflation 2-3% Expected annual FFO uplift ($ million) 20-25 $110+ million o
Slide 65: Margins benefit from cost-savings initiatives
Our margins continue to benefit from cost-savings initiatives Identified cost reductions are expected to generate 1% FFO per-unit growth $50 million of FFO Cost Reductions 65
Slide 66: Demand for baseload carbon-free generation is increasing
Demand for baseload carbon-free generation is increasing Generating 2% FFO per-unit growth from our North American hydro assets coming off contract over the next five years 2021 average realized pricing ($ per MWh) ~45 Current market prices ($ per MWh) ~60 Expected annual revenue uplift (per MWh) 15
Slide 67: Development dollars in the ground will translate to FFO
Development dollars in the ground will translate to FFO Secured 3% annual FFO per-unit growth with strong potential to deliver more from our 31 GW development pipeline 8 GW $120M 3% • Asset contracted FFO annually Annual FFO per- • Permitting obtained unit growth • Major equipment procured Gigawatts
Slide 68: How is our business changing?
How is our business changing? 10%+ FFO per- unit growth 1–2% 2–4% 3–5% Up to 9% Inflation Margin Development M&A Escalation Enhancement Pipeline Activities ~8% secured 2021 2026 68
Slide 69: In summary
In summary Strong Increasing Contracted Upside investment- access to highly resilient to 10%+ FFO grade balance diverse cash flows per-unit sheet sources of growth, most capital of which is secured 69
Slide 70: Key takeaways and Q&A
Key takeaways and Q&A Connor Teskey, Chief Executive Officer
Slide 71: Key takeaways
Key takeaways • Decarbonization is a global imperative impacting all industries now, creating the greatest commercial opportunity of our time • Clean energy capabilities will be essential and solution providers will create enormous value • Our differentiated capabilities allow us to grow without inc
Slide 72: Q&A
Q&A Brookfield
Slide 73: Notice to Recipients
Notice to Recipients All amounts are in U.S. dollars unless otherwise specified. Unless otherwise indicated, the regulation of our operations; concessions and licenses expiring and not being renewed or We caution that the foregoing list of important factors that may affect future results is not stat