Brookfield Renewable Partners Lp · TSX:BEP.UN
Brookfield Renewable Partners Lp — Investor Day (2022)
84 slides from Brookfield Renewable Partners Lp's investor day presentation, 2022
Slide 1: Brookfield Affiliates Investor Day 2022
Slide 2: Brookfield Renewable Partners
Brookfield Brookfield Renewable Partners DDD DDD DD DDD DPD DPPH D DDH D HDHD DD DD DPDD DPHDD DDD DD DDD VDDD DDD D DDD DD DPD DD DD DDD DD DDD DD DDD DID DDD DDD DDD DDD DPD DDD DDD DDD DDD DDD DDD DDD D DDD DDD DD DDD DDDDPDD DDD DPD HDHD DDD DDD DDD DPD DIDDY DD YPPDD PDD D PPD PDP DDD PDD DDD D
Slide 3: Agenda
Agenda 01 State of the Business 02 The Case for Clean Power Generation Is as Strong as Ever 03 The Opportunity Set for Transition Investing is Growing 04 A Must-Own Stock 05 Key Takeaways and Q&A
Slide 4: State of the Business
State of the Business Connor Teskey, Chief Executive Officer Brookfield Renewable Partners
Slide 5: Global clean energy supermajor with over 120,000 MW of capacity
We are a global clean energy supermajor with over 120,000 MW of operating and development capacity Europe 10,600 MW North America $10B Hydro $41B 20,900 MW 73,600 MW 25,300 MW Wind 55,000 MW Asia Pacific Solar $3B 11,800 MW South America 12,200 MW $16B Distributed Generation 14,100 MW 17,300 MW Stor
Slide 6: Differentiated growth capability
Differentiated growth capability Global Operating and Value Investing Presence Development Expertise Approach ~30 power markets 3,200 employees and 100+ investment across 20 countries 120 years of experience professionals 6
Slide 7: A best-in-class balance sheet
A best-in-class balance sheet BBB+ $4B Investment-grade rating Available liquidity 7
Slide 8: Cash flows grown almost 10% per unit annually over the last decade
High quality cash flows that have grown by almost 10% per unit annually over the last decade 2011 2021 $0.65 FFO/unit $1.45 FFO/unit Canada Hydro U.S. Hydro 1% 2% 9% Canada Hydro 10% Brazil Hydro 3% 6%5% 1% Colombia Hydro 26% U.S. Hydro 10% 26% Canada Wind 20% Brazil Hydro U.S. Wind 3% 1% Europe Win
Slide 9: Strong total returns over the past two decades
Translating into strong total returns over the past two decades BBB BBB+ 17% BEP Total Return Total Returns S&P Global ESG Index: 8% S&P Utilities Index: 8% S&P 500 Index: 7% 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 BEP SPX SPTSX 1. Source: Bloomberg 2. Chart indicates share price
Slide 10: Consistent track record of distribution growth
Consistent track record of distribution growth Distribution Summary Since Inception 2022 Distribution: $1.28 6% CAGR 2000 Distribution: $0.38 2000 2022 10
Slide 11: Last year, we said the tailwinds have never been stronger
Last year, we said the tailwinds for our business have never been stronger…
Slide 12: Today, our business is in an even better position
…Today, our business is in an even better position
Slide 13: Key themes supporting deployment
Key themes supporting deployment Decarbonization Low Cost Growing Energy Objectives Energy Electricity Security Demand 13
Slide 14: Corporate demand for decarbonization is growing 8x
Corporate demand for decarbonization is growing Global Corporate PPA Volumes 8x 2016 2021 Source: Bloomberg New Energy Finance. 14
Slide 15: Governments have stepped up their commitment to policy action
Governments have stepped up their commitment to policy action U.S. U.K. China Inflation Energy Repower 14th Reduction Security EU Five-Year Act Strategy Plan 15
Slide 16: Renewables continue to be cost leaders in electricity
Renewables continue to be cost leaders in the electricity sector High and volatile fossil fuel prices are reinforcing advantages Global LCOE 100 80 US$ / MWh 60 ~40% lower cost 40 20 2016 2017 2018 2019 2020 2021 1H 2022 Onshore wind Solar Coal Gas Source: Bloomberg New Energy Finance. 16
Slide 17: Energy secure generation
Energy secure generation Macroenvironment today is reminiscent of the ‘Oil Crisis’ in the 1970s that sparked a significant buildout of domestic energy production capacity “The gas hike is the equivalent of a “massive” carbon tax, of around $600—$950 a tonne. If prices persist at anything like this l
Slide 18: Our business performs well in all environments
Our business performs well in all environments
Slide 19: This is a real asset business
This is a real asset business Our assets perform well in an inflationary environment Rising commodity costs are a pass through as new PPAs are signed at higher prices Rising inflation increases the margin on over 70% of existing PPAs Our hydros are perpetual and highly scarce …Therefore, cash flow a
Slide 20: We operate essential, low-cost infrastructure
We operate essential, low-cost infrastructure Electricity is Mission Critical Stable and growing demand for low- cost energy—not materially impacted by economic conditions Zero Input Cost Wind and solar are the lowest cost bulk generation options, reducing fossil fuel imports and exposure to price v
Slide 21: We have high-quality cash flows
We have high-quality cash flows 90%+ ~70% 70%+ Diversified Highly contracted1 Revenues inflation- High gross No single market revenue under 14- linked3 margins >10% year PPAs2 1 Based on contracted generation as a percentage of total generation, net to Brookfield Renewable, excluding Brazil and Colo
Slide 22: Differentiated by deep operational and development expertise
We are differentiated by our deep operational and development expertise 3,200 140+ 8,300 24x7 Operating employees Power marketing Renewable Renewable power in 20 countries experts generation facilities capabilities globally 22
Slide 23: 2022 has been our strongest year
2022 has been our strongest year across virtually every aspect of our business
Slide 24: Record profits, 10%+ annual FFO growth
Record profits, continuing our track record of 10%+ annual FFO growth $1,000 FFO (US$ millions) 10%+ CAGR $500 $0 2011 xxxx 2021 24
Slide 25: Accelerating capital deployment
Accelerating capital deployment We are on track to have our biggest year of deployment to date Cumulative Equity Deployed $10 (US$ billion) $9 2X $8 $6 $4 $4 $2 $- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Cumulative equity deployed and committed, net to Brookfield Renewable. 25
Slide 26: Investing in new asset classes across the decarbonization spectrum
Investing in new asset classes across the Onshore Wind Distributed decarbonization spectrum Generation Offshore Wind 3% 2% Utility Solar 4% 5% Onshore Wind 7% Distributed Generation Battery Storage Utility Solar 43% Hydro 9% Distributed Generation Business Transformation Carbon Capture CO2 27% Offsh
Slide 27: Commissioned our largest portfolio of development projects yet
Commissioned our largest portfolio of development projects yet Over the past 12 months, we have commissioned ~2,300 MW of projects, including: 650 MW of wind repowering ~$40 million Over 1,200 MW of Annualized FFO utility-scale solar 27
Slide 28: ~100,000 MW development pipeline
Established an ~100,000 MW development pipeline— more than 3x larger than last year Europe 11,900 MW to be 17,000 MW North America commissioned in the 62,900 MW next three years Asia Pacific 9,800 MW South America 7,200 MW 28
Slide 29: Looking ahead, our strategy remains the same
Looking ahead, our strategy remains the same
Slide 30: Exceeded deployment targets over the past 12 months
Over the past 12 months, we exceeded our deployment targets, and our current pipeline suggests that this elevated run rate is likely to continue
Slide 31: More opportunities for growth than ever
We see more opportunities for growth than ever, and the opportunity to do large-scale deals is growing
Slide 32: Market trends favor investors with scale and global reach
Market trends are in favor of investors like us with scale, global reach, and operating capabilities Platforms Business New Asset Classes Leading to larger scale Transformations Scaling of proven transactions Greening of critical decarbonization utilities and power solutions producers 32
Slide 33: Increasing our capital deployment target
As a result, we are increasing our capital deployment target Accelerated growth Incremental transition 11,900 MW near-term of renewables opportunities development pipeline Expected capital deployment of $6-7+ billion over the next five years 33
Slide 34: Well positioned to capture growing market opportunity
Our business is well positioned to execute, and expects to capture an increasing amount of the growing market opportunity
Slide 35: The Case for Clean Power Generation Is as Strong as Ever
The Case for Clean Power Generation Is as Strong as Ever Jehangir Vevaina, Chief Investment Officer Renewable Power
Slide 36: Clean power is the largest decarbonization opportunity
Investment in clean power is the largest decarbonization opportunity today, and will represent most of our deployment for the foreseeable future
Slide 37: Macro tailwinds are stronger than ever
Macro tailwinds are stronger than ever Corporate Policy Affordability Energy Demand Support Security 37
Slide 38: Net-zero pathway requires wind and solar to exceed 2020 levels by 4x
Net-zero pathway requires wind and solar to exceed 2020 levels by 4x Capacity Additions of Solar PV and Wind in the Net-Zero Pathway 1,200 1,000 800 GW 600 400 200 0 2020 2030 Solar PV Wind Source: IEA. 38
Slide 39: Electrification drives electricity demand growth
Which will accelerate as electrification drives electricity demand growth Global Electricity Consumption by Sector 50,000 +110% 40,000 TWh 30,000 +30% 20,000 10,000 -0 2020 2030 2050 Industry Transportation Buildings Source: IEA. 39
Slide 40: This market dynamic favors experienced operators
This market dynamic favors experienced operators Proven Strong Scale development customer expertise relationships 40
Slide 41: Leading presence across all major clean energy technologies
We have a leading presence across all major clean energy technologies Distributed Storage Hydro Wind Solar Generation & Other 8,100 MW 6,700 MW 2,800 MW 1,600 MW 4,300 MW Operational Operational Operational Operational Operational 2,500 MW 18,600 MW 52,200 MW 10,600 MW 13,000 MW Development Developm
Slide 42: Deep development and operational expertise
Supported by deep development and operational expertise 3,200 Operating Five Centralized Equipment Strong OEM Employees Control Centers Procurement Relationships Engineering and Grid Optimization Develop, Build, and Operate Development 140+ Power ~800 Global Regulatory Construction Marketing Creditw
Slide 43: A diverse customer base of ~800
We have a diverse customer base of ~800 Type Region Technology 14% 3% 4% 8% 43% 33% 22% 25% 58% 63% 6% 21% Power Authorities Hydro North America Europe Distribution Companies Wind South America Asia-Pacific Industrial Users Solar Brookfield Distributed energy & sustainable solutions Based on contrac
Slide 44: Strategic partners to the biggest buyers of clean energy
We are strategic partners to the biggest buyers of clean Strategic collaboration to develop new renewable projects and partner energy globally on future clean energy opportunities • Generates recurring demand • Enhances our ability to negotiate mutually favorable terms Long-term renewable supply agr
Slide 45: Leveraged competitive advantages to secure attractive investments
We leveraged our core competitive advantages to secure attractive investments for strong value
Slide 46: Delivered and accelerated our development pipeline
Delivered and accelerated our development pipeline Capacity Commissioned (MW) Region Technology 2021 2024E1 North America Wind 160 2,100 Solar - 2,400 Other 60 1,200 Europe Wind 40 200 Solar 210 1,400 Other - 600 South America Various 360 2,700 Asia-Pacific Various 120 3,200 Total 950 13,800 15x 1 F
Slide 47: Acquired three leading U.S. development platforms
We acquired three leading U.S. development platforms Leveraging our scale capital and operating expertise to accelerate growth Urban Grid Standard Solar Scout Clean Energy Asset Name, Location Asset Name, Location Asset Name, Location Utility Scale Solar Distributed Generation Utility Scale Wind 20,
Slide 48: Inflation Reduction Act provides upside to our pipeline
U.S. Inflation Reduction Act provides meaningful upside to our pipeline U.S. Development Pipeline by Technology Wind 9,300 MW Solar 31,000 MW Distributed energy 7,300 MW Storage 9,400 MW Total 57,000 MW Enhanced cash flow visibility Improved unit economics Greater cash flow diversity 48
Slide 49: Multiple levers for value creation
Multiple levers for value creation Enhance Optimize the Identify synergies operations capital structure with our platform Drive revenue Growth Execute exit strategy growth and enhance projects to to maximize value contracting profile increase value 49
Slide 50: The Opportunity Set for Transition Investing is Growing
The Opportunity Set for Transition Investing is Growing Natalie Adomait, Chief Investment Officer Transition
Slide 51: Renewable power remains the backbone of our business
Renewable power remains the backbone of our business $26 billion AUM $70 billion AUM 1% 4% 11% 4% 6% 16% 2017 2022 50% 20% 88% Hydro Wind Business Transformation Hydro Wind Solar Utility Distributed Generation Business Transformation Sustainable Solutions 51
Slide 52: Transition investments to grow within our portfolio
We expect transition investments to grow within our portfolio
Slide 53: Transition investing extends our decarbonization franchise
Transition investing is a natural extension of our decarbonization franchise Renewable Power Generation Operating Development Technical Assets Pipeline Capabilities Energy Transition and Decarbonization Distributed Storage and Corporate Business New Green Generation Flexible Capacity Decarbonization
Slide 54: Prerequisites for transition investing
Prerequisites for Transition investing Global Presence Large-Scale Investing Operating ~30 power markets Capital Expertise Capabilities across 20 Supported by like- 100+ investment 3,200 employees countries minded partners Professionals and over 120 years of experience 54
Slide 55: Applying a consistent strategy as we expand
Applying a consistent strategy as we continue to expand Proven Recurring Cash Strong Downside Potential for Technologies Flows Protection Growth 55
Slide 56: So how are we investing?
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Slide 57: All decarbonization plans begin with clean energy
All decarbonization plans begin with clean energy
Slide 58: Partner of choice for businesses with net-zero goals
Making us the partner of choice for businesses with net-zero goals Clean Energy Strategic Relationship Integrated Build and Supply with Corporate Decarbonization Strategy Partners Partnership 58
Slide 59: A one-stop-shop for decarbonization solutions
Establishing our business as a one- stop-shop for decarbonization solutions
Slide 60: We are going where the emissions are
We are going where the emissions are Utilities Industrials Transport Energy 60
Slide 61: Emerging decarbonization solutions yield enhanced opportunity set
Focusing on emerging decarbonization solutions yields an enhanced opportunity set Carbon Capture Hydrogen Renewable Fuels Recycling Power Industry Steel Transportation Buildings Agriculture 61
Slide 62: Positioned to benefit as the transition opportunity develops
Positioning us well to benefit if the transition opportunity set develops the way many expect Annual Global Energy Investment 5,000 4,000 3,000 US$ (bn) 2,000 1,000 0 2022e 2030 NZE Low Carbon Power Low Carbon Fuels and CCUS Energy efficiency and other end uses EVs and grids and battery storage Sour
Slide 63: Prudent approach to entering large investible markets
Prudent approach to entering large and growing investible markets Emerging Asset Classes Strategy • Carbon capture • Small initial upfront investments • Battery storage • Structured downside protection • Recycling • Full discretion over future investment • Biofuels • Established partnerships with ex
Slide 64: Investment Spotlight: Carbon Capture Portfolio
Investment Spotlight: Carbon Capture Portfolio Portfolio Overview and Investment Thesis Portfolio of two high-growth platforms with robust development pipelines Operate in some of the most attractive CCS regulatory market—Alberta and California First-mover advantage, positioned to capture Investment
Slide 65: A Must-Own Stock
A Must-Own Stock Wyatt Hartley, Chief Financial Officer Brookfield Renewable Partners
Slide 66: What makes BEP a must-own stock
Last year we highlighted what makes BEP a must-own stock Distinguished Differentiated Secured Cash Flow Growth Capabilities Funding Model Growth 66
Slide 67: Current environment further differentiates our business
In the current environment, our business is further differentiated by these factors
Slide 68: Strength of balance sheet and access to liquidity
Starting with the strength of our balance sheet and access to deep and varied sources of liquidity
Slide 69: A conservatively capitalized balance sheet
Underpinned by a conservatively capitalized balance sheet BBB+ $4B $20B Investment-grade Available liquidity Partners’ capital balance sheet 69
Slide 70: Diverse funding sources have supported our growth
Diverse funding sources have supported our growth ~$1,800M ~$600M IG Debt on Existing Assets Corporate Debt $6B ~$1,800M ~$600M Cost ~6% Strategic Privatization Preferred Units and Shares ~$1,600M Capital Recycling Funding sources in the last five years 70
Slide 71: Financing Spotlight: Lievre
Financing Spotlight: Lievre • Long-term contract with high-quality counterparty • C$1+ billion of asset-level upfinancings on an investment grade basis at attractive rates • Over $100 million of expected annual net FFO through redeployment of upfinancing proceeds Asset Details ~5,500 GWh available f
Slide 72: Differentiating our cost of capital
Differentiating our cost of capital Sources of capital BEP Illustrative Peer IG corporate financing HY corporate financings IG debt capacity on existing hydros Asset recycling Equity issuances Strategically 72
Slide 73: Our high-quality cash flows are resilient
Our high-quality cash flows are resilient… 90%+ ~70% 70%+ 97% Contracted1 Of revenues are High gross Fixed-rate debt4 under 14-year inflation linked3 margins PPAs2 1 Based on contracted generation as a percentage of total generation, net to Brookfield Renewable, excluding Brazil and Colombia hydroel
Slide 74: And diverse in all aspects
…And diverse in all aspects Technology and Region1 Counterparty2 Canada Hydro Brazil Hydro 2% 9% Colombia Hydro Brookfield 1% 10% 3% Canada Wind 7% 1% U.S. Wind 9% Europe Wind 10% U.S. Hydro Asia Wind Industrial 4% LatAm Wind Users & 3% 1% Europe Solar Distribution 5% 6% Companies Asia Solar 7% 8% N
Slide 75: Cash flow growth levers are stronger than ever
Our cash flow growth levers are stronger than ever 10%+ FFO Per- Unit Growth Annually 2–3% 2–4% 3-5% Up to 9% Inflation Margin Development M&A Escalation Enhancement Pipeline Activities 8% SECURED & ALREADY FUNDED 2022 2027 75
Slide 76: Tailwinds from an inflationary environment
Tailwinds from an inflationary environment Our cash flow growth is stronger in a high inflation environment Revenues ($ million) 2,400 % indexed to inflation ~70% Expected margin 55%+ Inflation scenarios Estimated long-term inflation 2-3% 3-4% 4-5% Expected annual FFO uplift ($ million) 20-25 25-30
Slide 77: Margins will benefit from stronger market prices
Our margins will benefit from stronger market prices In the next five years, we will have increasing amounts of capacity across our fleet that will become available for re-contracting ~5,500 GWh $25/MWh ~$130 million Generation Increase in market Incremental FFO prices 3% FFO/UNIT GROWTH Asset Name,
Slide 78: De-risked and funded advanced stage development pipeline
We have a significantly de-risked and funded advanced stage development pipeline In the next three years: 5,600 MW ~$80 million Development Dollars in the Ground Annualized FFO 6,300 MW ~$85 million Advanced Stage Development Annualized FFO Asset Name, Location 3% FFO/UNIT GROWTH 78
Slide 79: Optionality to pursue additional ~90,000 MW pipeline
With optionality to pursue an additional ~90,000-megawatt pipeline, representing significant runway for growth
Slide 80: All roads lead to FFO per unit growth
All roads lead to FFO per unit growth at our most historic rate
Slide 81: Key Takeaways and Q&A
Key Takeaways and Q&A Connor Teskey, Chief Executive Officer Brookfield Renewable Partners
Slide 82: Key takeaways
Key takeaways Growth opportunities for our business and sector are better than ever The current environment plays to our operating and financial strengths We have a highly visible path to double-digit FFO growth We expected our recent elevated level of growth to continue We remain focused on deliver
Slide 83: Brookfield
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Slide 84: Notice to Recipients
Notice to Recipients All amounts are in U.S. dollars unless otherwise specified. Unless otherwise indicated, renewed or replaced on similar terms; our real property rights for wind and solar issuances of LP units, preferred units or securities exchangeable for LP units, including the statistical and