Q3 2022 Brookfield Renewable Partners LP and Brookfield Renewable Corp Earnings Call

November 4, 2022

Following our remarks, we look forward to taking your questions.

We had a great quarter.

Demonstrating both through our strong financial results and the execution of several large scale growth initiatives.

We generated funds from operations of $243 million or <unk> 38 per unit, a 15% increase from the same period last year.

As well as we advanced our key commercial priorities and development activities.

We continue to believe that our business is uniquely positioned providing investors with one of the most attractive value propositions and the factor.

We feel this way for a number of reasons.

First.

Our business is supported by a highly diversified global platform of clean energy assets.

Providing deep operating knowledge and visibility and the flexibility to deliver decarbonization solutions for our customers around the world.

Second our cash flows are contracted long term and inflation linked meaning we will remain resilient throughout all economic environments.

Third.

Our robust liquidity strong balance sheet and access to deepen varied sources of capital provide us the ability to execute on some of the largest and most attractive de carbonization investment opportunities.

And lastly.

We have a differentiated growth capability.

With over 100 dedicated investment professionals around the world looking to deploy capital at attractive risk adjusted returns, while delivering on our 12% to 15% return target.

In this regard we had a record quarter as.

As we closed a secured investments of up to $6 billion of capital or $1 5 billion net to Brookfield renewable across various transactions in regions.

This includes the continued growth of our leading U S renewables development business for which we will turn the call over to asper to discuss.

Thank you Conor and good morning, everyone.

As Conor mentioned, our U S business continues to see significant growth.

Following the close of our recently announced acquisitions and our development pipeline in the country. We will send that over 60000 megawatts and is well diversified across when utility scale solar distributed generation and energy storage.

The significant pipeline alongside our existing scale operating business means that we are owners and operators of one of the largest diversified clean power businesses in the country.

Recently, we announced the acquisition of Scout clean Energy and center solar both of which will be highly complementary to our existing business.

Scout clean energy is one of the largest utility scale fully integrated renewable development platforms in the U S across wind solar and storage will purchase the business for $1 billion with the potential to invest an additional $350 million to support the business development activities in.

In aggregate this is $270 million net to Brookfield renewable.

Scott has a sizable existing portfolio of over 800 megawatts of operating wind assets and an attractive pipeline of over 22000 megawatts of wind solar and storage projects across 24 states.

This includes almost 2500 megawatts of under construction and event stage projects with high visibility for commercialization and nearly 5000 additional megawatts to have valuable interconnection queue positions.

Theres, a strong management team in place with significant renewable power experience and a proven track record of successfully developing and financing over 20 gigawatts of clean energy assets.

This team will be a great complementary capabilities and will benefit significantly from being a part of our business, especially our commercial and procurement capabilities.

Tender solar is a leading integrated distributed generation developer in the U S. We announced the signing of this investment last quarter and we have now closed the acquisition for consideration of $540 million with the potential to invest an additional $160 million to support the business growth initiatives or $140 million of total net to <unk>.

Look for renewable.

Standard solar is the market, leading owner and operator of commercial and community distributor solar with end to end development capabilities and a strong track record of delivering high quality assets.

The business has approximately 500 megawatts of operating and under construction contracted assets and an almost 2000 megawatts identified pipeline theres.

There is an experienced management team in place with a proven ability to execute on significant growth opportunities across several high value solar markets in the U S that are highly complementary to our existing business.

Finally, it is important to emphasize that when we underwrote these investments as well as urban grid or utility scale solar development platform that we acquired in the first quarter, we do not factor in the impacts of inflation reductions.

However, with inflation reduction act firmly enacted it will provide meaningful upside to our sector and in particular these development platforms.

These investments will benefit from the extension of tax credits for wind and solar projects as well as the expansion of tax credits to include storage, which should meaningfully accelerate and increase the buildout of the high quality development pipelines within these businesses.

Thank you for your time today with that I'll turn the call back over to Conor to discuss our investment in Westinghouse.

Thanks <unk>.

Any credible net zero plan must include a meaningful and growing amount of nuclear power generation.

Not only that the.

The same industry tailwind of decarbonization electrification and energy security are a benefit to nuclear power generation. The same way that they are to wind solar and hydro.

Last month, we reached a definitive agreement to acquire Westinghouse alongside our strategic partner Cameco, one of the largest global suppliers of uranium fuel for nuclear power generation.

Westinghouse is a global leader in providing critical products and services to the nuclear power industry.

The transaction represents a very attractive risk adjusted return proposition as the business is underpinned by highly durable cash flows.

With approximately 85% of revenues coming from long term inflation linked contracted are highly recurring services and the business that comes with nearly a 100% customer retention rate.

Westinghouse acts as a service provider and therefore, it does not take on any commodity construction or significant fixed price contract risk nor.

Nor does it have any exposure to nuclear liabilities as it operates in countries, where those liabilities for nuclear accidents lives with the plant operators.

The total equity invested for the transaction will be approximately $4 5 billion or $750 million net to Brookfield renewable where we along with our institutional partners, we will own 51% of the company and chemical will own the remaining 49%.

Our investment in Westinghouse is an attractive entry point into nuclear power generation, which we believe along with hydro to be one of the key technologies facilitating the rapid buildout of intermittent renewables.

Wind and solar must be complemented by clean dispatch will base load power generation.

As the owner of one of the largest hydro businesses globally, we have visibility to the increasing value of clean reliable and economic sources of power to the grid.

Westinghouse is exceedingly well positioned to benefit from these secular trends.

It is the leading original equipment manufacturer and scale provider of mission critical technologies products and services to have the global nuclear power generation fleet.

Westinghouse serves as a key enabler of the energy transition around the world providing products and services are central to both the continued operation and growth of the global nuclear fleet.

Given the need for clean dispatch Bull energy.

As well as its compelling economic proposition, we believe that nuclear power is posed for significant growth and.

And as long as nuclear power exists Westinghouse will perform well.

Westinghouse is well positioned to benefit from the significant volume of plant extensions that have been announced 50 gigawatts in growing.

And the more than 60 Gigawatts of Newbuild reactors expected between 2020 and 2040 across more than 20 countries around the world.

Recently, the Polish government announced that it had chosen Westinghouse to support a first project of three units with an option for another three using westinghouse's AP 1000 nuclear reactor technology.

This was a key step towards the country, achieving its decarbonization targets and greater energy independence.

Lastly.

There are multi decade growth opportunities in the rollout of next generation advanced nuclear technology, such as Westinghouse's Eden Chi micro reactor technology, which can play a growing role in an increasingly decentralized decentralized and Decarbonize energy system.

With that we will we will turn the call over to white to discuss our operating results and financial position.

Thank you Conor as mentioned in earlier remarks, we added we had strong results in the quarter as our operations benefited from strong global power prices and continued growth both through development and acquisition.

Our balance sheet is in excellent shape with our credit rating recently affirmed that <unk> will be positive with a stable outlook.

We remain resilient to the rising interest rates globally with over 90% of our borrower borrowings being project level nonrecourse debt with an average remaining term of 12 years.

No material near term maturities and only 3% exposure to floating rate debt.

In an increasingly volatile markets or access to diverse pools of capital becomes even more differentiated.

We have over $3 5 billion of available liquidity, giving us significant financial flexibility during periods of capital scarcity.

During the quarter, we secured over $3 $7 billion of nonrecourse financing across the business that will close this year.

Resulting in over $400 million and up financing proceeds to us.

As both corner and Asper illustrated we had an impressive quarter for growth and are confident we can maintain this pace of deployment going forward.

Importantly, we are very well positioned to fund this growth.

Both.

As I mentioned, we have access to deep and varied sources of capital, which is increasingly valuable in the current market.

A significant portion of our recent growth is already funded or it's structured to have capital deployed over a prolonged period and in almost all cases at our option.

Further we intend to more actively take advantage of the strong bids we have seen for a number of our mature assets, where we have successfully executed our business plan.

Recycling proceeds from mature assets into new growth opportunities remains one of the most value accretive leavers within our business.

We also have initiated capital recycling recycling activities that in total when closed expect to generate approximately $830 million of total proceeds.

We have also launched numerous sales processes for some of our mature assets in select market.

Which are garnering significant interest at very attractive valuations, providing significant visibility to our capital recycling program for the coming quarters.

In closing, we believe the future opportunities for investing in clean power and the energy transition will be even greater than they are today.

And our scale track record in global capabilities position us as a partner of choice and de carbonization.

On behalf of the board and management, we thank all our unit holders and shareholders for their ongoing support.

That concludes our formal remarks for today's call.

Thank you for joining us this morning, and with that I'll pass it back to our operator for questions.

Thank you.

As a reminder to ask a question you will need to press star one one on your telephone.

Once again to ask a question you will need to press star one one.

And our first question comes from the line of Robert Hope with Scotiabank.

Good morning, everyone.

The first question on the development pipeline that <unk> been quite successful year to date on expanding that pipeline. However, with 10000 megawatts potentially entering service here in the next couple of years.

Could meaningfully draw down that pipeline.

It does seem like there's a little bit of a gold rush core development companies right now how do you envision longer term, replacing the development pipeline.

Thanks, Rob.

Maybe a couple of comments there first and foremost.

It's absolutely true that over the past 12 months, we've made a number of acquisitions of businesses that come with large in place development pipelines and that that has dramatically increased.

Our businesses total development capacity to approximately 100000 megawatts, but what's important to recognize is when we buy those businesses were not buying static operations. They come with management teams that have incredible Greenfield development capabilities.

Such that they can continue to organically grow those development pipelines themselves.

I would perhaps take a slightly different view I would expect that while we do intend to build well north of 10 gigawatts of that pipeline out over the next three years I would expect three years from now when we look to the next three years, we will be looking to build a far more than 10 10 gigawatts out in that peer.

As well so we expect to see that pipeline continue to be pulled forward.

<unk> continued to grow given the development capabilities, we have within our business and no doubt some of the support for things like some of the support that comes from policies, such as the IRR or significantly going to help that dynamic.

The other comment I would make is just around our success, particularly in the United States around acquiring development platform.

If you go back to.

<unk> to 18 months there were a lot of development business is sold in the United States and candidly.

We looked at almost all of them and we put a lot of work into them and we bid at what we thought were attractive returns and we werent very competitive in 2021, and then 2022, we've used the same investment discipline and we've been successful on bidding.

On a number of those.

Acquisitions, and I do think that demonstrates perhaps what is happening in the market were less sophisticated investors that maybe don't have the access to capital that we do in more uncertain markets and maybe investors that arent as quite well positioned to manage through things like supply chain disruption.

<unk> or bring power marketing capabilities to bear Havent had the ability to acquire for value in 2022 like we have.

I appreciate that thank you and then maybe the second question is just on your other growth initiatives. So it doesn't feel like a net has been cast a little bit wider into the transition.

Arena is that being said on a on a looks like a disciplined manner.

When you're evaluating these new opportunities Westinghouse looked like.

Well characterized the long duration cash flows, but maybe the next phase of growth with pure play recycling business, what are kind of the key tenants of risk return contract duration and asset.

Investment are you looking for.

Rob Great question, and you're absolutely right part of the reason why we love Westinghouse is it's a large scale operating business directly tied to the clean energy transition that if you look at the underlying cash flows they actually have a lot of parallels to.

The wind and solar and hydro businesses that we've been investing in for decades.

But you're also correct that are smaller but growing part of our business is more of the energy transition and sustainable solution initiatives and what we look for when we expand into those asset classes are really three things one there needs to be a clear <unk>.

<unk> objective and the acquisition needs to be motivated by the ability to offer something to our customers that we don't offer them today.

Secondly.

The the approach we've taken when investing in those businesses. So far is to make very small initial upfront investments that have a strong level of downside protection, but allow us to one partner with a leader in the space.

And to put us in a priority position to invest more capital at our discretion, if those asset classes and sustainable solutions grow in the future.

Whether it's the recycling business or some of the carbon capture investments. We've made these are small downside protected upfront investments, where we have the right to deploy more capital if we see opportunities to build out those sustainable solutions. When they are backed by long term contracts the same way we approach.

Wind and solar.

The last point I would make.

Is.

While we have.

We've made a number of investments in this space.

In recent quarters. It is important to recognize that we do still feel the single largest growth opportunity for our business is in the build out and acquisition up traditional renewable power asset classes and that's really been demonstrated by the activity we've seen in the United States over the last 12 months.

Thank you I appreciate that.

Thank you.

And our next question comes from the line of Sean Stewart with TD Securities.

Thank you and good morning, everyone.

Wanted to follow up on the accelerating capital recycling initiatives.

Mature assets to bolster them.

Liquidity position and crystallize returns can you give us some additional comments on any.

Okay with respect to technology, a region, what youre concentrating on where you see the better relative opportunities right now.

Certainly.

Perhaps the simplest answer is we see the greatest opportunity largely in the sale of wind and solar assets.

We certainly have a very rapidly growing platform and whether it's through M&A or through organic development, we're constantly adding more of those assets to our platform, which provides us tremendous flexibility to recycle those assets, where we've executed our business plan and theyre more mature within our portfolio.

The other characterization.

We would make is.

When we look at some of the assets that were receiving inbounds or interest for that are prime candidates for capital recycling. There is a nice mix right now of.

Our mature operating assets, but we're also getting interest in portfolios that includes some of our development pipeline or under construction assets and the point that we would reemphasize is.

Whether we're selling an operating asset or selling a portfolio that still has some development and organic growth runway, we're only going to look to sell assets, where we have completed our business plan and the initial operating objectives that we set out to do when we acquired the business, perhaps the last comment.

<unk>.

We do expect to be recycling capital on a global basis in the near term, we largely see most of the opportunities within the Americas and we would expect some of our capital recycling to be focus there in the next call. It six to nine months, but we're also seeing opportunities in other parts of the world.

Okay, Thanks for that corner.

And on the M&A opportunity set.

You focus more recently on private opportunities.

Can you give any updated broader thoughts on valuation trends for private opportunities versus public opportunities given.

The extent of volatility in the latter group any.

Any particular focus that you're concentrating on.

Definitely great questions. So.

No doubt.

<unk>.

There.

The opportunity set in the public market space for.

For us around potential M&A is higher today.

Then it was six months ago, where it was 12 months ago. So so we're actively monitoring that space.

But the point you highlighted also Cree also illustrates another dynamic that we're seeing which is.

In recent quarters, we've acquired a number of platforms for value that had a development focus where we thought we could really enhance growth and drive value.

With our procurement capabilities in our power marketing capabilities and that's led to a more recent focus on development I think what we're seeing given the more uncertain and slightly more volatile public markets and capital markets is we are seeing more opportunities to buy operating assets in the current <unk>.

<unk> than perhaps we have seen in the last six or nine months.

That's just a very natural ebb and flow of our business.

It would be great to see more opportunities in that space going forward.

That's useful context, thanks, very much corner, that's all I have.

Thank you.

And our next question comes from the line of Rupert <unk> with National Bank.

Hey, good morning, everyone.

On the development activity you are looking to build out 10 gigawatts over the next three years can you comment on how the supply chain interconnection cues and offtake.

All of them to support those growth targets.

Certainly so.

Great question Rupert This is something thats been topical for a number of quarters now.

<unk>.

We will remain consistent.

Managing through supply chain disruptions.

We are not immune to that it is something that has impacted the entire industry, but the way we would classify it for our business is it is something we have had to dedicate increased resources and increased focus to manage through but we feel we've managed through it very successfully.

And any disruptions have not had a material impact on our business either in terms of capex costs or in terms of the timeline.

On delivering projects, we're quite proud to state that we have not walked away from any projects.

During this period of supply chain disruptions.

However, perhaps this quarter there is a more positive spin that we are beginning to see a light at the end of the tunnel around.

The ability to more easily procure capex in many markets around the world. There is more capacity coming online some of the logistical issues around shifting those components around the world do appear to be easing and therefore, we feel we've done a great job managing up to this point, but we do expect 2000.

'twenty three to be better than 2022 and that that's a nice upside for our business. Another perhaps short answer to your question.

We don't see supply chain disruptions as a risk to delivery on that 10000, plus megawatts that we expect to bring online.

And with the competitive environment do you see adequate access to interconnection.

A fair price to Opex as well.

It's a great question and we're glad you asked it.

Sure.

Interconnection is something that we feel and interconnection queue position is something that we feel has been dramatically undervalued within our sector for years.

And when we make investments, particularly on the development side.

We always take into account where are those.

Development projects in terms of their lifecycle do they have land secured do they have permits secured and do they have interconnection grid security and.

This is something we've taken into account whenever we've made an investment in development platforms. All the actually given an example from earlier this year urban grid, we bought this business and we cleared the market.

And we were thrilled to make that acquisition and one of the underappreciated benefits of that business is it had a very strong interconnection queue position in the high value market of PJM.

<unk> already in our early stages of ownership of that business, we've seen the ability to capitalize on that highly valuable and highly scarce.

Interconnection position so.

To answer your question, Yes, we think interconnection is a very important component of the value of a development project and it is something that is increasingly coming into focus across our industry today.

But we feel quite proud that it's something we've been focused on for a number of years now across all the development acquisitions, we've made.

Alright, Thanks, Conor I'll leave it there.

Thank you.

And our next question comes from the line of David <unk> with Raymond James.

Thanks, Good morning, everyone. My first question, maybe maybe just.

Kind of a broader question around.

[noise] around renewables deployment strategy in Europe , I think it was a couple of quarters ago, you talked about.

Accelerating investments in places like Germany, I'm, just curious what you've seen recently in terms of.

Advancement of projects, there and momentum you're seeing in that market today.

Certainly.

One dynamic we are seeing in Europe , and this will come as a shock to no. One is the increased importance and heightened focused on energy security and well right now the delivery of gas dominates a lot of the headlines as it pertains to European power.

<unk>.

Something that is happening in a very very large way is European regions and European authorities are working very hard to accelerate the permitting.

Ross Europe to allow for more rapid build out of renewables renewables really are the long term solution to low cost energy and energy security and net zero, which is probably the three highest priorities in Europe right now.

We're seeing that most actively across three of our European businesses is in synovus, our solar developer in Germany, where we've accelerated the build out of our development pipeline.

Within <unk>, which is a large global.

Solar development platform with a significant presence in Europe that is seeing an acceleration of its build out in Spain and also within poll energia that as pulling forward some of its wind and solar build out in the country. So we're seeing it very much within our operating businesses and we're taking that into account as we review.

<unk> new.

Growth opportunities and M&A opportunities as well.

Excellent thanks for that color I appreciate it.

Maybe just one more for me on the Westinghouse acquisition I'm, just curious what kind of timeline and I guess magnitude of opportunity you see with the micro reactor technology and if you have any thoughts around.

Which jurisdictions would initially makes sense for that for that technology.

Certainly one of the reasons, we love Westinghouse is.

No matter where in nuclear grows.

Westinghouse is poised to benefit.

If the growth comes from up rates or life extensions of existing.

Power generation plants, Westinghouse is well positioned to benefit from that if the growth comes from new build out of large scale nuclear reactors Westinghouse is exceedingly well positioned to benefit from that.

Supplier of engineering and products to those build outs and then more in the future as we see more advanced stage nuclear technology focus on SME and micro reactors.

Westinghouse has the leading micro reactor technology, and we view them as being in the pole position to capture that market as costs come down and as demand for that technology grows as well I would highlight that we view that last bucket is being slightly deferred to the other two maybe three to five years away, but that doesn't mean.

We arent tremendously excited about it and excited about westinghouse's pole position in that space.

One parallel that I would draw is.

As Westinghouse moves to more smaller scale reactors and potentially micro reactors to service that growing demand. It really lends itself to a lot of the same capabilities that we have within our renewables business providing.

Power plants that can be contracted directly to an end customer that needs to clean energy in a certain region around the world. It has many of the same decentralization and customer focused die.

Dynamics as our distributed generation business, which is obviously something where we've seen lots of upside and lots of growth in recent years.

Excellent thanks for that Glenn I'll turn it over.

Thank you.

Yeah.

And our next question comes from the line of William Griffin with UBS.

Okay.

Alright, great. Thank you very much so just my first question.

Touched on this earlier, but I was hoping you could provide maybe a bit more color on the investment in the U S recycling business.

What made that an investment they are attractive to Brookfield and then maybe you could discuss the timing of that transaction just given the recent sharp decline in recycled commodity values that we've seen.

Certainly.

And maybe just to take a step back on that investment in particular, why we like it as it has many similar dynamics to development of wind and solar obviously, there is a clear de carbonization angle, but really what the opportunity there is not dissimilar to when we buy a renewables developer this business.

Has a existing asset base, but a very large development pipeline of.

Modular recycling facilities material recycling facilities sorry.

That they have the potential to build out now they will only build out those.

Facilities, if they can secure a long term contract that really de risks the construction and the long term cash flows of those assets when we build them out. So once again, a very direct parallel to the investment profile that we're familiar with and then secondly, the point that we would.

Rate is simply around our ability to increasingly serve our customers' decarbonization need.

One thing that we are very very happy with.

Is the value proposition, we have in the United States right now that quite frankly for our customers. We think is tough to match.

Whether it's on Green energy now, we can provide green power across any asset type wind solar hydro or D. G in any region.

If it's a customer that has emissions that are tough to abate that want to look to reduce emissions through the use of carbon capture we can give them that if it's a customer that has needs for raw materials and they want to focus on recycled materials as opposed to Virgin materials. We now have an avenue.

To do that as well so as we think about these new asset classes, it's really about servicing our customers well executing on the same risk adjusted return and investment profile Thats been very familiar to our business for a number of years.

I appreciate that.

Just last one for me I mean could you speak broadly to what Youre seeing in terms of asset prices for traditional operating renewable energy projects have valuations started to come down just to reflect the higher rate environment that we're in.

Yeah.

We will provide a very balanced answer on this.

Valuations have yet to come down for private market transactions, but let's be clear, we fully expect that they will at some point rates can't continue to rise and valuation they.

Cemented where they've been for the last couple of years. So we're certainly taking that into account.

But to date.

There's been a number of <unk>.

Recent high profile transactions in the renewable space and I think it would be very tough to make an argument that valuations have come down yet.

The other point that we would highlight is when we think of where we buy or build versus where we think we can sell that development margin or that operating improvement margin, we havent seen that shrink.

Even if power or interest rates cause let's say the price of long term contracted operating.

Assets decline, a little bit maybe returns going up a little bit we are seeing development returns go up a proportionate amount as well. So we're still capturing the same amount of development margin improvement margin, which means capital recycling continues to be a very value accretive way to grow our business.

Alright, I appreciate you taking my questions. Thanks very much.

Thank you.

I'm showing no further questions so with that I'll hand, the call back over to CEO Conor Husky for any closing remarks.

Great well, thank you everyone for dialing into today's call.

As always appreciate your interest and support of Brookfield renewable and we look forward to updating you.

With our year end results. After the end of Q4 have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial one one.

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Hello, and thank you for standing by welcome.

Welcome to the Bep third quarter 2022 results conference call and webcast at this time all participants are in a listen only mode.

After the speaker presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one one on your telephone.

It is now my pleasure to introduce CEO Conor Jessica.

Thank you operator.

Good morning, everyone and thank you for joining us on our third quarter 2022 conference call.

Before we begin we would like to remind you that a copy of our news release Investor supplement and letter to unit holders can be found on our website. We also want to remind you that we may make forward looking statements on this call. These statements are subject to known and unknown risks and future results may differ materially for more information you are encouraged to review our regulatory filings.

Available on SEDAR, Edgar and on our website.

On today's call, we will provide an update on the business and some of our recent growth initiatives.

<unk>, our vice President in our investments team in North America.

As discussed the growth of our renewables development business in the United States.

I will then provide an overview of our recently announced acquisition of Westinghouse.

And why it will finish off the call discussing our operating results and financial position.

Following our remarks, we look forward to taking your questions.

We had a great quarter.

Demonstrating both through our strong financial results and the execution of several large scale growth initiatives.

We generated funds from operations of $243 million or <unk> 38 per unit, a 15% increase from the same period last year.

As well as we advanced our key commercial priorities and development activities.

We continue to believe that our business is uniquely positioned providing investors with one of the most attractive value propositions and the factor.

We feel this way for a number of reasons.

First.

Our business is supported by a highly diversified global platform of clean energy assets providing.

Providing deep operating knowledge and visibility and the flexibility to deliver decarbonization solutions for our customers around the world.

Second our cash flows are contracted long term and inflation linked meaning we will remain resilient throughout all economic environments.

Third.

And lastly.

We have a differentiated growth capability.

With over 100 dedicated investment professionals around the world looking to deploy capital at attractive risk adjusted returns, while delivering on our 12% to 15% return target.

In this regard we had a record quarter as.

As we closed a secured investments of up to $6 billion of capital. Our one 5 billion net to Brookfield renewable across various transactions in regions.

This includes the continued growth of our leading U S renewables development business for which we will turn the call over to asper to discuss.

Thank you Conor and good morning, everyone.

As Conor mentioned, our U S business continues to see significant growth.

The significant pipeline alongside our existing scale operating business means that we are owners and operators of one of the largest diversified clean power businesses in the country.

Recently, we announced the acquisition of Scout clean Energy and center solar both of which will be highly complementary to our existing business.

In aggregate. This is 270 million net to Brookfield renewable.

Scott has a sizable existing portfolio of over 800 megawatts of operating wind assets and an attractive pipeline of over 22000 megawatts of wind solar and storage projects across 24 states.

This includes almost 2500 megawatts of under construction and advanced stage projects with high visibility for commercialization and nearly 5000 additional megawatts to have valuable interconnection queue positions.

Theres, a strong management team in place with significant renewable power experience and a proven track record of successfully developing and financing over 20 gigawatts of clean energy assets.

This team will be a great complementary capabilities and will benefit significantly from being a part of our business, especially our commercial and procurement capabilities.

Look for renewable.

And our solar is the market, leading owner and operator of commercial and community distributor solar with end to end development capabilities and a strong track record of delivering high quality assets. The business has approximately 500 megawatts of operating and under construction contracted assets and an almost 2000 megawatts identified pie.

Nine.

However, with inflation reduction act firmly enacted it will provide meaningful upside to our sector and in particular these development platforms.

These investments will benefit from the extension of tax credits for wind and solar projects as well as the expansion of tax credits include storage, which should meaningfully accelerate and increase the build out of the high quality development pipelines within these businesses.

Thank you for your time today with that I'll turn the call back over to Conor to discuss our investment in Westinghouse.

Thanks <unk>.

Any credible net zero plan must include a meaningful and growing amount of nuclear power generation.

Not only that the.

The same industry tailwind of decarbonization electrification and energy security are a benefit to nuclear power generation. The same way that they are to wind solar and hydro.

Last month, we reached a definitive agreement to acquire Westinghouse alongside our strategic partner Cameco, one of the largest global suppliers of uranium fuel for nuclear power generation.

Westinghouse is a global leader in providing critical products and services to the nuclear power industry.

The transaction represents a very attractive risk adjusted return proposition as the business is underpinned by highly durable cash flows.

With approximately 85% of revenues coming from long term inflation linked contracted are highly recurring services and the business that comes with nearly a 100% customer retention rate.

Westinghouse acts as a service provider and therefore, it does not take on any commodity construction are significant fixed price contract risk nor.

Nor does it have any exposure to nuclear liabilities as it operates in countries, where those liabilities for nuclear accident slides with the plant operators.

Wind and solar must be complemented by clean dispatch both base load power generation.

As the owner of one of the largest hydro businesses globally, we have visibility to the increasing value of clean reliable and economic sources of power to the grid.

Westinghouse is exceedingly well positioned to benefit from these secular trends.

It is the leading original equipment manufacturer and scale provider of mission critical technologies products and services to have the global nuclear power generation fleet.

Westinghouse serves as a key enabler of the energy transition around the world providing products and services are central to both the continued operation and growth of the global nuclear fleet.

Given the need for clean dispatch Bull energy.

As well as its compelling economic proposition, we believe that nuclear power is posed for significant growth and.

And as long as nuclear power exists Westinghouse will perform well.

Westinghouse is well positioned to benefit from the significant volume of plant extensions that have been announced.

<unk> Gigawatts and growing.

And the more than 60 gigawatts of new build reactors expected between 2020 and 2040 across more than 20 countries around the world.

Recently, the Polish government announced that it had chosen Westinghouse to support our first project of three units with an option for another three using westinghouse's AP 1000 nuclear reactor technology.

This was a key step towards the country, achieving its decarbonization targets and greater energy independence.

Lastly.

There are multi decade growth opportunities in the rollout of next generation advanced nuclear technology, such as Westinghouse's Eden <unk> micro reactor technology, which can play a growing role in an increasingly decentralized decentralized and Decarbonize energy system.

With that we will turn we will turn the call over to white to discuss our operating results and financial position.

Our balance sheet is in excellent shape with our credit rating recently affirmed that trip will be positive with a stable outlook.

We remain resilient to the rising interest rates globally with over 90% of our borrower borrowings being project level nonrecourse debt with an average remaining term of 12 years.

No material near term maturities and only 3% exposure to floating rate debt.

In an increasingly volatile markets or access to diverse pools of capital becomes even more differentiated.

We have over $3 5 billion of available liquidity, giving us significant financial flexibility during periods of capital scarcity.

During the quarter, we secured over $3 7 billion of non recourse financing across the business that will close this year, resulting in over $400 million and up financing proceeds to us.

As both coronary and asper illustrated we had an impressive quarter for growth and are confident we can maintain this pace of deployment going forward.

Importantly, we are very well positioned to fund this growth.

<unk>.

As I mentioned, we have access to deep and varied sources of capital, which is increasingly valuable in the current market.

A significant portion of our recent growth is already funded or it's structured to have capital deployed over a prolonged period and in almost all cases at our option.

Further we intend to more actively take advantage of the strong bids we have seen for a number of our mature assets, where we have successfully executed our business plan.

Recycling proceeds from mature assets into new growth opportunities remains one of the most value accretive leavers within our business.

We also have initiated capital recycling recycling activities that in total when closed expect to generate approximately $830 million of total proceeds.

We have also launched numerous sales processes for some of our mature assets in select market.

Which are garnering significant interest at very attractive valuations, providing significant visibility to our capital recycling program for the coming quarters.

In closing.

Hosing, we believe the future opportunities for investing in clean power and the energy transition will be even greater than they are today.

And our scale track record in global capabilities position us as a partner of choice and de carbonization.

On behalf of the board and management, we thank all our unit holders and shareholders for their ongoing support.

That concludes our formal remarks for today's call.

Thank you for joining us this morning, and with that I'll pass it back to our operator for questions.

Thank you.

As a reminder to ask a question you will need to press star one one on your telephone.

Once again to ask a question you will need to press star one one.

And our first question comes from the line of Robert Hope with Scotiabank.

Good morning, everyone.

The first question on the development pipeline that you have been quite successful year to date on expanding that pipeline. However, with 10000 megawatts potentially entering service here in the next couple of years.

Meaning complete dropdown pipeline.

It does seem like there's a little bit of a gold rush core development companies right now how do you envision longer term, replacing this development pipeline.

Thanks, Rob.

Maybe a couple of comments there first and foremost.

It's absolutely true that.

Over the past 12 months, we've made a number of acquisitions of businesses that come with large in place development pipelines and that that has dramatically increased.

Such that they can continue to organically grow those development pipelines themselves.

I would perhaps take a slightly different view I would expect that while we do intend to build well north of 10 gigawatts of that pipeline out over the next three years I would expect three years from now when we look to the next three years, we'll be looking to build a far more than 10 gigawatts out in that peer.

As well so we expect to see that pipeline continue to be pulled forward.

The other comment I would make is just around our success, particularly in the United States around acquiring development platform.

If you go back to.

<unk> to 18 months there were a lot of development business is sold in the United States and candidly.

We looked at almost all of them.

And we put a lot of work into them and we bid at what we thought were attractive returns and we werent very competitive in 2021, and then 2022, we've used the same investment discipline and we've been successful on bidding on.

On a number of those.

Arent as quite well positioned to manage through things like supply chain disruptions or bring power marketing capabilities to bear Havent had the ability to acquire for value in 2022 like we have.

I appreciate that thank you and then maybe the second question is just on your other growth initiatives. So it does appear like the net is being cast a little bit wider into the transition.

Arena that being said on a on a it looks like a disciplined manner.

When you're evaluating these new opportunities Westinghouse looked like.

I'll characterize the long duration cash flows, but maybe the next phase of growth with pure play recycling business, what are kind of the key tenants of risk return contract duration and asset.

Investment are you looking for.

The wind and solar and hydro businesses that we've been investing in for decades.

You're also correct that are smaller but growing part of our business is more of the energy transition and sustainable solution initiatives and what we look for when we expand into those asset classes are really three things one there needs to be a clear <unk>.

<unk> objective and the acquisition needs to be motivated by the ability to offer something to our customers that we don't offer them today.

Secondly.

The approach we've taken when investing in those businesses. So far is to make very small initial upfront investments that have a strong level of downside protection, but allow us to one partner with a leader in this space.

And to put us in a priority position to invest more capital at our discretion.

Those asset classes and sustainable solutions grow in the future.

Wind and solar.

The last point I would make.

Is.

While we have.

<unk> made a number of investments in this space.

In recent quarters. It is important to recognize that we do still feel the single largest growth opportunity for our business is in the build out and acquisition of traditional renewable power asset classes and that's really been demonstrated by the activity we've seen in the United States over the last 12 months.

Thank you I appreciate that.

Thank you.

And our next question comes from the line of Sean Stewart with TD Securities.

Thank you and good morning, everyone.

Wanted to follow up on the accelerating capital recycling initiatives.

Mature assets to bolster the liquidity position and crystallize returns can.

Can you give us some additional comments on any.

Okay with respect to technology, a region, what youre concentrating on where you see the better relative opportunities right now.

Certainly.

Perhaps the simplest answer is we see the greatest opportunity.

Largely in the sale of wind and solar assets.

Those assets, where we've executed our business plan and theyre more mature within our portfolio.

The other characterization.

We would make is.

When we look at some of the assets that were receiving inbounds are interest for that are prime candidates for capital recycling. There is a nice mix right now of.

Mature operating assets, but we're also getting interest in portfolios that includes some of our development pipeline or under construction assets and the point that we would reemphasize is.

<unk>.

We do expect to be recycling capital on a global basis in the near term, we largely see most of the opportunities within the Americas and we would expect some of our capital recycling to be focused there in the next call. It six to nine months, but we're also seeing opportunities in other parts of the world.

Okay, Thanks for that corner.

And on the M&A opportunity set.

You focus more recently on private opportunities.

Can you give any updated broader thoughts on valuation trends for private opportunities versus public opportunities given the.

To the extent of volatility in the latter group any.

Any particular focus that you're concentrating on.

Definitely great questions. So.

No doubt.

There.

The opportunity set.

In the public market space.

For us around potential M&A is higher today than.

And then it was six months ago or it was 12 months ago. So so we're actively monitoring that space.

But the point you highlighted also Cree also illustrates another dynamic that we're seeing which is.

In recent quarters, we've acquired a number of platforms for value that had a development focus where we thought we could really enhanced growth and drive value with our procurement capabilities in our power marketing capabilities and that's led to a more reach.

<unk> focus on development I think what we're seeing given the more uncertain and slightly more volatile public markets and capital markets is we are seeing more opportunities to buy operating assets in the current environment than perhaps we've seen in the last six or nine months.

That's just a very natural ebb and flow of our business.

It would be great to see more opportunities in that space going forward.

Okay.

That's useful context, thanks very much comment go ahead.

Thank you.

And our next question comes from the line of Rupert <unk> with National Bank.

Hey, good morning, everyone.

On the development activity you are looking to build out 10 gigawatts over the next three years can you comment on how the supply chain interconnection queues off takes are evolving to support those growth targets.

Certainly so.

Great question Rupert This is something thats been topical for a number of quarters now.

Sure.

We will remain consistent.

Managing through supply chain disruptions.

That had a material impact on our business either in terms of capex costs or in terms of the timeline.

On delivering projects, we're quite proud to state that we have not walked away from any projects. During this period of supply chain disruptions.

However, perhaps this quarter there is a more positive spin that we are beginning to see a light at the end of the tunnel around.

The ability to more easily peak procure capex in many markets around the world. There is more capacity coming online some of the logistical issues around shifting those components around the world do appear to be easing and therefore, we feel we've done a great job managing up to this point, but we do expect 2002.

Three to be better than 2022 and that that's a nice upside for our business. Another perhaps shorting our answer to your question, we don't see supply chain disruptions as a risk to delivery on that.

10000, plus megawatts that we expect to bring online.

And with the competitive environment do you see adequate access to interconnection.

Fair priced optics as well.

It's a great question and we're glad you asked it.

Interconnection is something that we feel and interconnection queue position is something that we feel has been dramatically undervalued within our sector for years.

And when we make investments, particularly on the development side, we always take into account where are those development projects in terms of their lifecycle do they have land secured do they have permits secured and do they have interconnection grid secured.

And.

This is something we've taken into account whenever we've made an investment in development platforms. All the actually given example from earlier this year urban grid, we bought this business and we cleared the market.

And we were thrilled to make that acquisition and one of the underappreciated benefits of that business is it had a very strong interconnection queue position in the high value market of PJM.

And already in our early stages of ownership of that business, we've seen the ability to capitalize on that highly valuable and highly scarce.

Interconnection position so.

To answer your question, Yes, we think interconnection is a very important component of the value of a development project and its something thats increasingly coming into focus across our industry today, but we feel quite proud that it's something we've been focused on for a number of years now.

Cross all the development acquisitions, we've made.

Great. Thanks, Conor I'll leave it there.

Thank you.

And our next question comes from the line of David because with.

With Raymond James.

Thanks, Good morning, everyone.

First question, maybe maybe just.

Kind of a broader question around.

Around renewables deployment strategy in Europe .

It was a couple of quarters ago, you talked about.

Accelerating investments in places like Germany, I'm, just curious what you've seen recently in terms of.

Advancement of projects, there and momentum you're seeing in that market today.

Certainly.

<unk>.

Something that is happening in a very very large way is European regions and European authorities are working very hard to accelerate the permitting.

<unk> Europe to allow for the more rapid build out of renewables renewables really are the long term solution to low cost energy and energy security and net zero, which is probably the three highest priorities in Europe right now.

We're seeing that most actively.

<unk> three of our European businesses is in Synovus, our solar developer in Germany, where we've accelerated the build out of our development pipeline.

Within <unk>, which is a large global.

<unk> new.

Growth opportunities and M&A opportunities as well.

Excellent. Thanks for that color I appreciate it maybe just one more for me on the Westinghouse acquisition I'm, just curious what kind of timeline and I guess magnitude of opportunity you see with the micro reactor technology and if you have any thoughts around.

Which jurisdictions with initially makes sense for that for that technology.

Certainly so one of the reasons, we love Westinghouse is.

No matter where nuclear grows.

Westinghouse is poised to benefit.

If the growth comes from up rates or life extensions of existing.

Power generation plants, Westinghouse is well positioned to benefit from that if the growth comes from new build out of large scale nuclear reactors westinghouse's exceedingly well positioned to benefit from that as the supplier of engineering and products to those build outs and then more in the future.

As we see more advanced stage nuclear technology focus on SME and micro reactors.

Westinghouse has the leading micro reactor technology, and we view them as being in the pull position to capture that market as costs come down and as demand for that technology grows as well I would highlight that we view that last bucket is being slightly deferred to the other two maybe three to five years away, but that doesn't mean.

We are tremendously excited about it and excited about westinghouse's pole position in that space.

One parallel that I would draw is.

Power plants that can be contracted directly to an end customer that needs to clean energy in a certain region around the world. It has many of the same decentralization and customer focused dine.

Dynamics as our distributed generation business, which is obviously something where we've seen lots of upside and lots of growth in recent years.

Excellent thanks for that Glenn I'll turn it over.

Thank you.

Yes.

And our next question comes from the line of William Griffin with UBS.

Okay.

Alright, great. Thank you very much so just my first question.

<unk> touched on this earlier, but I was hoping you could provide maybe a bit more color on the investment in the U S recycling business.

Certainly.

<unk> has a existing asset base, but a very large development pipeline.

Modular recycling facilities materials recycling facility sorry.

That they have the potential to build out now they will only build out those.

Facilities, if they can secure a long term contract that really de risks the construction and the long term cash flows of those assets. Once we build them out. So once again, a very direct parallel to the investment profile that we're familiar with and then secondly, the point that we would read.

Iterate is simply around our ability to increasingly serve our customers' decarbonization needs.

One thing that we are very very happy with.

Is the value proposition, we have in the United States right now that quite frankly for our customers. We think is tough to match.

Whether it's on Green energy now, we can provide green power across any asset type wind solar hydro or DG in any region.

To do that as well so as we think about these new asset classes, it's really about servicing our customers well executing on the same risk adjusted return and investment profile, that's been very familiar to our business for a number of years.

I appreciate that and just last one for me I mean could you speak broadly to what Youre seeing in terms of asset prices for traditional operating renewable energy projects and have valuations started to come down just to reflect the higher rate environment that we're in.

We will provide a very balanced answer on this.

<unk> has yet to come down for private market transactions, but let's be clear, we fully expect that they will at some point rates can't continue to rise and valuations today.

Cemented where they've been for the last couple of years. So we're certainly taking that into account.

But to date.

Theres been a number of <unk>.

Recent high profile transactions in the renewable space and I think it would be very tough to make an argument that valuations have come down yet.

Even if power or interest rates cause let's say the price of long term contracted operating.

Asset decline a little bit maybe returns going up a little bit we are seeing development returns go up a proportionate amount as well. So we're still capturing the same amount of development margin improvement margin, which means capital recycling continues to be a very value accretive way to grow our business.

Alright, I appreciate you taking my questions. Thanks very much.

Thank you.

Showing no further questions so with that I'll hand, the call back over to CEO Conor Tusky for any closing remarks.

Great well, thank you everyone for dialing into today's call.

As always appreciate your interest and support of Brookfield renewable and we look forward to updating you.

With our year end results. After the end of Q4 have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.

Q3 2022 Brookfield Renewable Partners LP and Brookfield Renewable Corp Earnings Call

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