Brookfield Renewable Partners Lp · TSX:BEP.UN
Brookfield Renewable Partners Lp — Investor Day (2023)
64 slides from Brookfield Renewable Partners Lp's investor day presentation, 2023
Slide 1: Brookfield Renewable Partners
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Slide 2: Agenda
Agenda 01 Year in Review 02 Our Differentiated Development Capabilities in Action 03 Well Positioned to Deliver Growth 04 Continuing Our Track Record of Robust Cash Flow Growth 05 Key Takeaways and Q&A
Slide 3: Year in Review
Year in Review Connor Teskey Chief Executive Officer
Slide 4: 2023 has been a record year for Brookfield Renewable
2023 has been a record year for Brookfield Renewable Record Financial Record Asset Record Deployment & Strengthened Results Development Meaningful Rotation Balance Sheet 4
Slide 5: We are delivering record financial results
We are delivering record financial results 10%+ FFO per unit annual growth over the past decade Progression to higher run-rate earnings driven by our consistent growth levers 5
Slide 6: We are scaling up our development capabilities
We are scaling up our development capabilities Over the past 12 months, we have commissioned a record ~3,400 MW of projects ~$50 million Annualized FFO 6
Slide 7: In the right geographies and technologies
In the right geographies and technologies >55% of our pipeline is in the U.S. and is set to benefit from the IRA >90% of our pipeline is in the most cost-competitive renewable technologies—onshore wind or utility-scale and distributed solar Our target development returns continue to be at a premium
Slide 8: Well positioned to meet increasing clean energy demand
Making us well positioned to meet increasing clean energy demand 134 GW 18 GW 7 GW Total development To be commissioned Run-rate annual pipeline over next three years deployment by 2024 +80% from prior year +45% from prior year +60% from prior year 8
Slide 9: Accelerating capital deployment
Accelerating capital deployment We are on track to have our biggest year of deployment to date Cumulative Equity Deployed (US$ billion) $11 $10 3X $8 $6 $4 $4 $2 $- 2012 2014 2016 2018 2020 2022 Cumulative equity deployed and committed, net to Brookfield Renewable. 9
Slide 10: Continuing our track record of consistent growth
Continuing our track record of consistent growth Distribution Growth FFO per Unit Growth 6% 10%+ CAGR CAGR 2012 2023 2012 2023F 10
Slide 11: Enhancing our through-the-cycle balance sheet and funding model
While enhancing our ‘through-the-cycle’ balance sheet and funding model BBB+ 98% $4.5B Continuous Investment-grade Long-term, fixed Available liquidity Asset recycling balance sheet rate debt1 11
Slide 12: A global clean energy supermajor with ~166,000 MW
Further establishing ourselves as a global clean energy supermajor with ~166,000 MW of operating and development capacity Europe 10,700 MW North America $10B Hydro $50B 27,300 MW 99,500 MW 37,200 MW Wind 75,300 MW Asia Pacific Solar $4B 24,700 MW South America 16,100 MW $17B Distributed Generation 1
Slide 13: Sector tailwinds continue in our favor
And while sector tailwinds continue in our favor Decarbonization Low-Cost Growing Energy Objectives Energy Electricity Security Demand 13
Slide 14: We are benefiting from almost all of today's major global themes
We are benefiting from almost all of today’s major global themes Driving step-change growth Generative AI in clean energy demand Our business is positively Inflation correlated with inflation Constructive power Driving a robust contracting prices environment Access to diverse sources of Funding capi
Slide 15: Meaning our competitive advantages have only strengthened…
Meaning our competitive advantages have only strengthened…
Slide 16: …and the conditions for putting capital to work are better than ever
…and the conditions for putting capital to work at attractive risk- adjusted returns are better than ever
Slide 17: Our access to scale capital matters now more than ever
Our access to scale capital matters now more than ever—some of our best deals have been our largest, where we bring on co-investors $6 billion $3 billion $8 billion $13 billion 17
Slide 18: We can move quickly and with conviction
We can move quickly and with conviction, providing an advantage in sourcing and underwriting opportunities Global Large-Scale Investing Presence Capital Expertise ~30 power markets Supported by 100+ investment across 20 countries significant professionals institutional capital 18
Slide 19: Market increasingly driven by corporate pull vs. government push
Market is increasingly driven by corporate pull vs. a government push — favoring businesses like ours with credibility, capability and experience Global Corporate PPA Volumes 9x 2016 2022 Source: Bloomberg New Energy Finance 19
Slide 20: We are strong operators experienced in all major clean energy technologies
We are strong operators experienced in all major clean energy technologies 3,700 140+ 6,800 24x7 Operating employees in Power marketing Renewable Renewable power 20 countries globally experts generation facilities capabilities 20
Slide 21: Our development capabilities generate attractive risk-adjusted returns
Our development capabilities allow us to generate attractive risk-adjusted returns, with a de-risked approach, delivering projects on time and on budget Underwrite Remove basis risk Leverage global conservatively with scale no binary risk Deep local expertise Centralized in all markets procurement a
Slide 22: Maintaining return targets and increasing growth targets
As a result, we continue to maintain our return targets, and we are once again increasing our growth targets for the next five years
Slide 23: We are positioned to invest for value
We are positioned to invest for value Supportive Global Themes Differentiated Capabilities Access to Scale Capital Expected capital deployment of $7-8+ billion over the next five years 23
Slide 24: Our Differentiated Development Capabilities in Action
Our Differentiated Development Capabilities in Action Lluis Noguera Global Head of Development Chief Executive Officer, X-Elio
Slide 25: We have a leading global development pipeline of 134 GW
We have a leading global development pipeline of 134 GW Region Technology 2% 17% 18% 31% 39% 10% 2% 11% 19% 51% North America Europe South America Asia-Pacific Hydro Onshore Wind Offshore Wind Utility Solar Distributed Generation Sustainable Solutions 25
Slide 26: Continuously growing and pulling forward the pipeline
Which we have been able to continuously grow and pull forward Cumulative Advanced-Stage Projects to Be Commissioned Over the Next Three Years MW (Pipeline) 2021 2022 2023 2024 2025 2020 2021 2022 26
Slide 27: Growth supported by deep expertise through the value chain
And our growth is supported by deep expertise through the value chain 3,700 Operating Five Centralized Equipment Strong OEM Employees Control Centers Procurement Relationships Grid Engineering and Optimization Develop, Build and Operate Development 140+ Power ~800 Global Regulatory Construction Mark
Slide 28: Our near-term development pipeline is significantly de-risked
Our near-term development pipeline is significantly de-risked—securing the economics and commissioning timeline for our projects Project Status 4% Under-construction and completed 12% Revenue and inputs fully contracted 38% Grid approved, land secured, finalizing 23% ~18 GW concurrent revenue/input
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Slide 30: A global solar operating and development platform
A global solar operating and development platform 1.7 GW 1.2 GW 14.8 GW ~80% Commissioned capacity Operating and under- Pipeline across nine Contracted generation since acquisition construction assets countries through long-term PPAs 30
Slide 31: Integrated local teams in operating regions
With integrated local teams in operating regions North Europe America 8,800 MW 3,000 MW Local relationships, that Asia are supported by a Pacific global team 2,000 MW South America 1,000 MW 31
Slide 32: Transformed into a self-funded business
Transformed into a self-funded business 1.5 GW 2.3x $350M Recycled assets to low- Multiple on capital Corporate-level facilities cost-of-capital buyers generated from asset raised for bridge rotation financing 32
Slide 33: Accelerated development and expanded growth pipeline
Accelerated development and expanded growth pipeline 15 GW Tripled run-rate +200% commissioning 0.5 GW 1.5 GW 5 GW 2019 2023 33
Slide 34: Strategy moving forward
Strategy moving forward Deliver over 2 GW of new ready-to-build projects annually and sustain step up in growth Maintain self-funding model and continue to crystalize attractive developer returns Expand into new renewable technologies such as storage 34
Slide 35: We will employ a similar playbook going forward
We will employ a similar playbook going forward Targeting to generate premium returns on development activities 35
Slide 36: Scale and operational expertise enable opportunities like X-Elio
Brookfield Renewable’s scale and operational expertise enable it to capitalize on opportunities like X-Elio
Slide 37: Well Positioned to Deliver Growth
Well Positioned to Deliver Growth Jehangir Vevaina Chief Investment Officer
Slide 38: Operating in an evolving market where tailwinds are accelerating
We are operating in an evolving market where tailwinds are accelerating… Increasing More Growing Decarbonization Constructive Corporate Demand Objectives Power Prices 38
Slide 39: Well positioned to navigate the challenges in our sector
…and are well positioned to navigate the challenges in our sector Rising Interest Access to Capital Supply Chain Rates Constraints 39
Slide 40: Confident we can put scale capital to work at 12-15% returns
We are as confident as ever that we can put scale capital to work at our target 12-15% returns
Slide 41: A differentiated growth strategy across the development spectrum
We have consistently demonstrated a differentiated growth strategy investing across the development spectrum Utilizing our access Investing at scale Leveraging our Generating strong to capital to invest with conviction capabilities to returns despite where others when we see invest for value market
Slide 42: Our biggest deals with partners are some of our best
Our biggest deals where we have brought in partners are some of our best Validates our underwriting thesis and enables us to take on larger deals at premium returns $6 Billion $3 Billion $8 Billion $13 Billion 20%+ IRR 20%+ IRR 5 partners 9+ partners 7 partners 10 partners 42
Slide 43: Invest capital at scale with conviction
Invest capital at scale with conviction leveraging the knowledge from our existing investments 2018 2023 $740M $710M 2019 2022 2023 $540M $1B $1.4B 2017-2023 India Project 2023 2023 $285M Development $1B $360M Figures represent equity invested and committed. 43
Slide 44: Investing where we generate the best risk-adjusted returns
We can invest where we generate the best risk-adjusted returns regardless of where the business is on the development spectrum Greenfield Development, Contracted and development construction, operating repowering, and operating 44
Slide 45: Development and operating expertise allows us to unlock value
Our development and operating expertise allows us to unlock value Uniquely positioned Operational and Performance and Development and to execute carve-out commercial capital structure repowering potential synergies optimization 45
Slide 46: We have retained and enhanced value despite volatile markets
We have retained and enhanced value despite volatile markets Strong cost management in challenging conditions Disciplined underwriting with upside from the IRA Benefiting from commercial expertise to secure higher prices Industry-leading financing solutions Optimized capital structure to cushion aga
Slide 47: A track record of delivering growth
We have a track record of delivering growth and are better than ever prepared to continue doing so
Slide 48: Continuing Our Track Record of Robust Cash Flow Growth
Continuing Our Track Record of Robust Cash Flow Growth Wyatt Hartley Chief Financial Officer
Slide 49: A strong, durable balance sheet and access to scale capital
We have a strong, durable balance sheet and access to scale capital To fund growth and manage through volatility BBB+ 98% $4.5B Significant Investment-grade Fixed-rate debt1 Available liquidity Partner capital balance sheet and no material near-term maturities 49
Slide 50: Our asset recycling success underscores our differentiated capabilities
Our asset recycling success underscores our differentiated capabilities Generating value for unitholders and funding growth X-Elio Asset Rotation Minority Sell Downs Uruguay Portfolio Utility-Scale Solar Various Renewable Assets Wind and Utility-Scale Solar 1,500 MW 400 MW 121 MW ~$1B in proceeds ~$
Slide 51: We generate resilient, high-quality cash flows
We generate resilient, high-quality cash flows… ~90% ~70% 70%+ Diversified Contracted1 Of revenues are High gross No single market under 13-year inflation linked3 margins >10% PPAs2 1 Based on contracted generation as a percentage of total generation, net to Brookfield Renewable, excluding Brazil an
Slide 52: Cash flows grown consistently over the past decade
…that we have grown consistently over the past decade 2012 2022 <1% 3% 7% 2% 9% 2% 4% 14% 1% 13% 10%+ 10% 8% FFO Per-Unit 12% CAGR 1% 6% 1% 1% 2% 28% 8% 15% 9% 5% 2% 4% 10% 4% 4% 6% 9% Ontario - Hydro Quebec - Hydro Other Canada Hydro Ontario - Hydro Quebec - Hydro Other Canada Hydro New York - Hydr
Slide 53: Our growth levers going forward look stronger than ever
Our growth levers going forward look stronger than ever 10%+ FFO Per-Unit Growth Annually 2–3% 2–4% 3–5% Over 9% Inflation Margin Development M&A Activities Escalation Enhancement Pipeline 2023 2028 53
Slide 54: Persistent inflation is a positive for our indexed cash flows
Persistent inflation is a positive for our indexed cash flows Last year This year 2–3% 2–4% Near-term inflation Near-term inflation forecast forecast Every 1% equals ~$30M of additional FFO 54
Slide 55: Margins growing on stronger all-in market prices
Our margins are growing on stronger all-in market prices With renewable credits and ancillary products providing additional benefits Last year’s prices This year’s prices ~$70/MWh ~$75/MWh Every $5/MWh translates into ~$25M of FFO 55
Slide 56: Delivering our development pipeline on time and on budget
We are delivering our development pipeline on time and on budget, while significantly increasing our run-rate commissioning Advanced Run-Rate Pipeline Commissioning ~17 GW ~22 GW ~4 GW ~7 GW +$100M FFO +$30M FFO +35% +60% since last year since last year 56
Slide 57: Acquiring assets highly accretive to cash flows
We are acquiring assets that are highly accretive to cash flows Already secured meaningful growth for next year Secured M&A Completed M&A 2022 2023 2024 Budget 57
Slide 58: Accelerating FFO per unit growth and delivering strong returns
Positioning us to accelerate our FFO per unit growth and deliver strong returns to investors
Slide 59: Key Takeaways and Q&A
Key Takeaways and Q&A Connor Teskey
Slide 60: 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 expect our recent elevated level of growth to continue We are confident on delivering
Slide 61: Brookfield
Brookfield
Slide 62: Thank You
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Slide 63: Endnotes
Endnotes Slide 9, 17, 19, 35, 42, 44, 45, 57 1. Acquisition of Duke Energy Renewables, Banks Renewables, Westinghouse Electric, and Origin Energy's Energy Markets business are yet to be closed Slide 11, 49 1. Fixed debt exposure on a proportionate basis. Total floating rate exposure is 9% of which 7
Slide 64: Notice to Recipients
Notice to Recipients All amounts are in U.S. dollars unless otherwise specified. Unless otherwise indicated, lienholders and leaseholders that are superior to those granted to us; increases in the exchangeable shares; the incurrence of debt at multiple levels within our organizational the statistica