Q4 2023 Brookfield Renewable Corp Earnings Call

February 2, 2024

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Yeah.

Operator: Good day, and thank you for standing by. Welcome to the Brookfield Renewable Q4 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your touchtone telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Connor Teskey, Chief Executive Officer. Please go ahead.

Speaker Change: Good day, and thank you for standing by welcome to the Brookfield Renewables fourth quarter 2023 earnings call.

Operator: Good day, and thank you for standing by. Welcome to the Brookfield Renewables fourth quarter 2023. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your touch-screen. You will then hear an automated message advising your hand is free.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one one on your Touchtone telephone.

Operator: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Connor Teskey, Chief Executive Officer. Please go ahead.

Speaker Change: You will then hear an automated message advising your hand is raised.

Operator: To withdraw your question, please press star 1 1. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Connor Teske, Chief Executive Officer. Please go ahead.

Speaker Change: Draw. Your question. Please press star one one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your host today Connor Tusky Chief Executive Officer. Please go ahead.

Speaker Change: Yeah.

Connor Teskey: Thank you, operator. Good morning, everyone, and thank you for joining us for our Q4 2023 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 would also like to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR, EDGAR, and on our website.

Connor Teske: Thank you, operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2023 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 would also like to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially.

Connor Tusky: Thank you operator, good morning, everyone and thank you for joining us for our fourth quarter 2023 conference call.

Connor Tusky: Before we begin we'd 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 would also like to remind you that we may make forward looking statements on this call. These statements are subject to known and unknown risks and our future results may differ materially for more information you are encouraged to review our regulatory filings available.

Connor Teske: For more information, you are encouraged to review our regulatory filings available on CDART, EDGART, and on our website. On today's call, we will provide a review of our 2023 performance and an update on the business and our growth initiatives before handing it over to Stephen Gallagher, CEO of Brookfield Renewable U.S., who will discuss how we are enabling the growth of the largest and fastest growing companies around the world and what that means for our business. And then, lastly, Wyatt will conclude the call by discussing our operating results and financial position.

Connor Tusky: On SEDAR, Edgar and on our website.

Connor Teskey: On today's call, we will provide a review of our 2023 performance and an update on the business and our growth initiatives before handing it over to Stephen Gallagher, CEO of Brookfield Renewable US, who will discuss how we are enabling the growth of the largest and fastest growing companies around the world and what that means for our business. Then lastly, Wyatt will conclude the call by discussing our operating results and financial position. As always, following our remarks, we look forward to taking your questions... 2023 was a record year for our business on many metrics. We generated record funds from operations, benefiting from organic growth and acquisitions. We deployed a record amount of capital into attractive and accretive opportunities across all our key markets, and we developed more capacity than we ever have before, all while strengthening our balance sheet.

Connor Tusky: On today's call, we will provide a review of our 2023 performance.

Connor Tusky: And an update on the business and our growth initiatives before handing it over to Stephen Gallagher CEO of Brookfield renewable U S, who will discuss how we are enabling the growth of the largest and fastest growing companies around the world and what that means for our business.

Speaker Change: And then lastly, why it will conclude the call by discussing our operating results and financial position.

Connor Teskey: As always, following our remarks, we look forward to taking your questions... 2023 was a record year for our business on many metrics. We generated record funds from operations, benefiting from organic growth and acquisitions. We deployed a record amount of capital into attractive and accretive opportunities across all our key markets, and we developed more capacity than we ever have before, all while strengthening our balance sheet.

Connor Teske: As always, following our remarks, we look forward to taking your questions. 2023 was a record year for our business on many metrics. We generated record funds from operations, benefiting from organic growth and acquisition.

Speaker Change: As always following our remarks, we look forward to taking your questions.

Speaker Change: 2023 was a record year for our business on many metrics.

We generated record funds from operations benefiting from organic growth and acquisitions.

Connor Teske: We deployed a record amount of capital into attractive and accretive opportunities across all our key markets, and we developed more capacity than we ever have before, all while strengthening our balance. We have established ourselves as a global clean energy supermajor, evolving from a pure play renewable energy producer to a preeminent platform for renewable power and decarbonization solutions with scale and a breadth of capabilities and relationships that set us apart from our peers. In a year where we saw rising interest rates and supply chain challenges facing the sector, we were able to execute across our business. Most notably, our disciplined approach to development, which focuses on removing risks up front, meant that our development activities remained robust, delivering a record year and preserving our return, all at a time when some market participants saw a headwind.

Speaker Change: We deployed a record amount of capital into attractive and accretive opportunities across all our key markets.

Speaker Change: And we developed more capacity than we ever have before all while strengthening our balance sheet.

Connor Teskey: We have established ourselves as a global clean energy super major, evolving from a pure-play renewable energy producer to a preeminent platform for renewable power and decarbonization solutions, with scale and a breadth of capabilities and relationships that set us apart from our peers. In a year where we saw rising interest rates and supply chain challenges facing the sector, we were able to execute across our business plan. Most notably, our disciplined approach to development, which focuses on removing risks upfront, meant that our development activities remained robust, delivering a record year and preserving our returns, all at a time when some market participants saw headwinds.

Speaker Change: We have established ourselves as a global clean energy Supermajor evolving from a pure play renewable energy producer to a preeminent platform for renewable power and decarbonization solutions with scale and the breadth of capabilities and relationships that set us apart from our peers.

Speaker Change: In a year, where we saw rising interest rates and supply chain challenges facing the sector, we were able to execute across our business plan.

Connor Teskey: Most notably, our disciplined approach to development, which focuses on removing risks upfront, meant that our development activities remained robust, delivering a record year and preserving our returns, all at a time when some market participants saw headwinds.

Speaker Change: Most notably our disciplined approach to development, which focuses on removing risks upfront.

Speaker Change: That our development activity remains robust delivering a record year and preserving our returns.

Speaker Change: All at a time when some market participants are headwinds.

Connor Teskey: We also saw the benefit of our prudent approach to financing our business, which combined with the strength of our balance sheet, durability of our cash flows, and diverse sources of scale capital, ensured that we were able to continue to pursue growth at a time when some could not and there was less competition. We deployed or agreed to deploy $9 billion of capital alongside our partners, highlighted by our acquisitions of Westinghouse, Deriva Energy, the remaining 50% interest in X-ELIO, which we did not own, Banks Renewables, and investments in CleanMax and Avaada in India. And while our proposed acquisition of Origin Energy did not receive the required level of shareholder support, we are confident in achieving our target deployment of $7 to 8 billion over the next 5 years and growing our cash flows and distributions in line with our targets.

Connor Teske: We also saw the benefit of our prudent approach to financing our business, which combined with the strength of our balance sheet, the durability of our cash flows, and diverse sources of growth capital ensured that we were able to continue to pursue growth at a time when some could not and there was less competition. We deployed or agreed to deploy $9 billion of capital alongside our partners, highlighted by our acquisitions of Westinghouse and Derivit Energy, the remaining 50% interest in Exilio, which we did not own, Banks Renewables, and investments in Cleanmax and Avada in India. And while our proposed acquisition of Origin Energy did not receive the required level of shareholder support, we are confident in achieving our target deployment of $7 to $8 billion over the next five years and growing our cash flows and distributions in line with our target.

Speaker Change: We also saw the benefit of our prudent approach to financing our business, which combined with the strength of our balance sheet durability of our cash flows and diverse sources of scale capital ensured that we were able to continue to pursue growth at a time when some could not and there is less competition.

Connor Teskey: We deployed or agreed to deploy $9 billion of capital alongside our partners, highlighted by our acquisitions of Westinghouse, Deriva Energy, the remaining 50% interest in X-ELIO, which we did not own, Banks Renewables, and investments in CleanMax and Avaada in India. And while our proposed acquisition of Origin Energy did not receive the required level of shareholder support, we are confident in achieving our target deployment of $7 to 8 billion over the next 5 years and growing our cash flows and distributions in line with our targets.

Speaker Change: We deployed or agreed to deploy $9 billion of capital alongside our partners highlighted by our acquisitions of Westinghouse <unk> energy the remaining 50% interest in <unk>, which we did not own banks renewables and investments in clean Max and Nevada in India.

And while our proposed acquisition of origin energy did not receive the required level of shareholder support we are confident in achieving our target deployment of 7% to $8 billion over the next five years and growing our cash flows and distributions in line with our targets.

Connor Teskey: Since the initial announcement of the Origin transaction, we have received inbounds from businesses around the world who are seeking a partner with significant capital and deep operating expertise to accelerate their transition goals and enhance the value of their businesses. With respect to our development, we continue to scale up our capabilities and delivered almost 5,000 megawatts of new capacity in the past year, up from 3,500 megawatts in 2022, and we also pulled forward the rest of our pipeline. Our advanced stage pipeline is materially de-risked, with over 25% of the next three years' planned capacity already under construction, an additional over 20% with revenues and inputs fully contracted, and an incremental over 30% in the final stages of securing PPAs and construction contracts.

Connor Teske: Since the initial announcement of the Origin Transaction, we have received inquiries from businesses around the world who are seeking a partner with significant capital and deep operating expertise to accelerate their transition goals and enhance the value of their business. With respect to our development, we continue to scale up our capabilities and delivered almost 5,000 megawatts of new capacity in the past year, up from 3,500 megawatts in 2022, and we have also pulled forward the rest of our pipeline. Our advanced stage pipeline is materially de-risked, with over 25% of the next three years' planned capacity already under construction, an additional over 20% with revenues and inputs fully contracted, and an incremental over 30% in the final stages of securing PPAs and construction contracts between our DRIFT. With a highly visible development pipeline, the growth opportunities we are seeing in the market, and our organic growth levers, we are confident in achieving our 10% plus FFO per unit growth in 2024 and beyond. With that, we are pleased to announce an over 5% increase in our annual distribution to $1.42 per unit.

Speaker Change: Since the initial announcement of the origin transaction, we've received inbounds from businesses around the world, who are seeking a partner with significant capital and deep operating expertise to accelerate their transition goals and enhance the value of their businesses.

Connor Teskey: With respect to our development, we continue to scale up our capabilities and delivered almost 5,000 megawatts of new capacity in the past year, up from 3,500 megawatts in 2022, and we also pulled forward the rest of our pipeline. Our advanced stage pipeline is materially de-risked, with over 25% of the next three years' planned capacity already under construction, an additional over 20% with revenues and inputs fully contracted, and an incremental over 30% in the final stages of securing PPAs and construction contracts.

Speaker Change: With respect to our development.

Speaker Change: We continue to scale up our capabilities and delivered almost 5000 megawatts of new capacity in the past year.

Speaker Change: Up from 3500 megawatts in 2022, well, we and we also pulled forward the rest of our pipeline.

Speaker Change: Our advanced stage pipeline is materially derisked with over 25% of the next three years' plan capacity already under construction.

Speaker Change: An additional over 20% with revenues and inputs fully contracted and then the incremental over 30% in the final stages of securing ppas and construction contracts.

Connor Teskey: Between our de-risked, highly visible development pipeline, the growth opportunities we are seeing in the market, and our organic growth levers, we are confident in achieving our 10%+ FFO per unit growth in 2024 and beyond. With that, we are pleased to announce an over 5% increase to our annual distribution to $1.42 per unit. This is the 13th consecutive year of at least 5% annual distribution growth, dating back to 2011, when Brookfield Renewable was publicly listed. Now, we will turn it over to Steven to discuss how we are enabling the growth of the global technology companies and what that means for our business.

Speaker Change: Between our Derisked highly visible development pipeline the growth opportunities we are seeing in the market.

Speaker Change: And our organic growth levers, we are confident in achieving our 10% plus <unk> per unit growth in 2024 and beyond.

Speaker Change: With that we are pleased to announce an over 5% increase to our annual distribution to $1 42 per unit. This.

Connor Teskey: This is the 13th consecutive year of at least 5% annual distribution growth, dating back to 2011, when Brookfield Renewable was publicly listed. Now, we will turn it over to Steven to discuss how we are enabling the growth of the global technology companies and what that means for our business.

Stephen Gallagher: This is the 13th consecutive year of at least 5% annual distribution growth, dating back to 2011, when Brookfield Renewable was publicly listed. Now, we will turn it over to Stephen to discuss how we are enabling the growth of global technology companies and what that means for our business. Thank you, Conor, and good morning, everyone. With the significant growth in demand for data globally, the position of the technology megacaps as the largest and fastest growing businesses in the world continues to solidify. Since 2020, the cloud computing segments of these companies have grown by over 30% per annum, representing their highest growth segments and generating their highest margins. Increasing demand for cloud computing from digitalization and the adoption of AI-enabled tools are driving these companies to continue to invest heavily in their capabilities and capacity, and two of the key ingredients needed to deliver these products are computing power and energy. The race to increase computing power has been illustrated by the increase in demand for certain inputs, such as computer chips.

Speaker Change: This is the 13th consecutive year of at least 5% annual distribution growth dating back to 2011, when Brookfield renewable with publicly listed.

Speaker Change: Now, we will turn it over to Stephen to discuss how we are enabling the growth of the global technology companies and what that means for our business.

Stephen Gallagher: Thank you, Connor, and good morning, everyone. With the significant growth in demand for data globally, the position of the technology mega caps as the largest and fastest-growing businesses in the world continues to solidify. Since 2020, the cloud computing segments of these companies have grown by over 30% per annum, representing their highest growth segments and generating their highest margins. Increasing demand for cloud computing from digitalization and the adoption of AI-enabled tools are driving these companies to continue to invest heavily in their capabilities and capacity. And two of the key ingredients needed to deliver these products are computing power and energy. Over the last 12 months, the race to increase computing power has been illustrated by the increase in demand for certain inputs, such as computer chips.

Steven Eckert: Thank you, Connor, and good morning, everyone. With the significant growth in demand for data globally, the position of the technology mega caps as the largest and fastest-growing businesses in the world continues to solidify. Since 2020, the cloud computing segments of these companies have grown by over 30% per annum, representing their highest growth segments and generating their highest margins.

Stephen Gallagher: Thank you Conor and good morning, everyone.

Stephen Gallagher: With the significant growth and demand for data globally.

Stephen Gallagher: The position of the technology Mega Cups, as the largest and fastest growing businesses in the world continues to solidify.

Stephen Gallagher: Since 2020, the cloud computing segment of these companies have grown by over 30% per annum.

Stephen Gallagher: Representing our highest growth segments and generating our highest margins.

Steven Eckert: Increasing demand for cloud computing from digitalization and the adoption of AI-enabled tools are driving these companies to continue to invest heavily in their capabilities and capacity. And two of the key ingredients needed to deliver these products are computing power and energy. Over the last 12 months, the race to increase computing power has been illustrated by the increase in demand for certain inputs, such as computer chips.

Stephen Gallagher: Increasing demand for cloud computing from digitalization and the adoption of AI enabled tunes.

Stephen Gallagher: Our driving these companies to continue to invest heavily in their capabilities and capacity.

Stephen Gallagher: And the two <unk>.

Stephen Gallagher: Two of the key ingredients needed to deliver these products are computing power and energy.

Stephen Gallagher: Over the last 12 months.

<unk> to increase computing power has been illustrated by the increase in demand for certain inputs.

Stephen Gallagher: Such as computer chips.

Stephen Gallagher: However, we believe most investors have yet to grasp the importance of a secure energy source in enabling the delivery of the data center CapEx and computing power growth. The largest cloud computing businesses run on clean power. These companies have committed to 100% clean energy targets and have grown their consumption by approximately 50% per annum over the last couple of years, making them the largest buyers of green power globally. Now, the highly power-intensive nature of AI is acting as a multiplier on energy demand, which is increasingly becoming a key bottleneck for growth of cloud computing. For example, the integration of AI uses up to 10 times more power when integrated into a typical search process, and renewable power, as the cheapest form of bulk electricity production, is the solution to this growing electricity demand.

Steven Eckert: However, we believe most investors have yet to grasp the importance of a secure energy source in enabling the delivery of the data center CapEx and computing power growth. The largest cloud computing businesses run on clean power. These companies have committed to 100% clean energy targets and have grown their consumption by approximately 50% per annum over the last couple of years, making them the largest buyers of green power globally.

Stephen Gallagher: However, we believe most investors have yet to grasp the importance of a secure energy source in enabling the delivery of data center and computing power growth. The largest cloud computing businesses run on clean power. These companies have committed to 100% clean energy targets and have grown their consumption by approximately 50% per annum over the last couple of years, making them the largest buyers of green power globally. And now, the highly power-intensive nature of AI is acting as a multiplier on energy demand, which is increasingly becoming a key bottleneck for the growth of cloud computing. For example,

Stephen Gallagher: However, we believe most investors have yet to grasp the importance of a secure energy source and enabling the delivery of the data center and computing power growth.

Stephen Gallagher: The largest cloud computing businesses run on clean power deal.

Stephen Gallagher: These companies have committed to 100% clean energy targets and have grown the consumption by approximately 50% per annum over the last couple of years makes.

Stephen Gallagher: Making them the largest buyers of green power globally.

Steven Eckert: Now, the highly power-intensive nature of AI is acting as a multiplier on energy demand, which is increasingly becoming a key bottleneck for growth of cloud computing. For example, the integration of AI uses up to 10 times more power when integrated into a typical search process, and renewable power, as the cheapest form of bulk electricity production, is the solution to this growing electricity demand.

I know the highly power intensive nature of AI.

Is acting as a multiplier on energy demand.

Stephen Gallagher: Which is increase increasingly becoming a key bottleneck for growth of cloud computing.

Stephen Gallagher: For example, the.

Stephen Gallagher: The integration of AI.

Stephen Gallagher: The integration of AI uses up to 10 times more power when integrated into a typical search process, and Renewable Power as the cheapest form of bulk electricity production is the solution to this growing electricity demand. Furthermore, as the scale and energy intensity of data centers increase. These facilities put pressure on the global electricity grid. As a result, certain regulators are now requiring data center developers to provide a power solution in order to receive their data center permit.

Stephen Gallagher: Users up to 10 times more power.

Stephen Gallagher: Integrated into a typical search process.

Stephen Gallagher: On renewable power of the cheapest form of bulk electricity production is the solution to this growing electricity demand.

Stephen Gallagher: Furthermore, as the scale and energy intensity of data centers increases, these facilities put pressure on the global electricity grids. As a result, certain regulators are now requiring data center developers to provide a power solution in order to receive their data center permits. This has put access to power on the critical path to growth for these technology companies. This is leading our partners to engage in commercial conversations earlier in the process, to develop solutions with us, which is the dual benefit of both de-risking the technology company's power needs and also our development pipeline. It is widely estimated that global electricity consumption from data centers will increase to approximately 10% of total electricity demand by 2030, up from approximately 2% today.

Steven Eckert: Furthermore, as the scale and energy intensity of data centers increases, these facilities put pressure on the global electricity grids. As a result, certain regulators are now requiring data center developers to provide a power solution in order to receive their data center permits. This has put access to power on the critical path to growth for these technology companies.

Stephen Gallagher: Furthermore, as the scale and energy intensive phase of data centers increases.

Stephen Gallagher: Facilities put pressure on the global electricity grids.

Stephen Gallagher: As a result, certain regulators are no requiring data center developers to provide a power solution in order to receive their data center permits.

Stephen Gallagher: This does put access to power on the critical path to growth for these technology companies.

Stephen Gallagher: This has put access to power on the critical path to growth for these technology companies. This is leading our partners to engage in commercial conversations earlier in the process to develop solutions with us, which has the dual benefit of both de-risking the technology company's power needs and also our development pipeline. It is widely estimated that global electricity consumption from data centers will increase to approximately 10% of total electricity demand by 2030, up from approximately 2% today. This means that to satisfy the needs of data centers alone, which doesn't factor in the penetration of EVs or broader electrification. Additional generation capacity will be required, equivalent to the size of the current U.S. grid, for the better part of a decade.

Steven Eckert: This is leading our partners to engage in commercial conversations earlier in the process, to develop solutions with us, which is the dual benefit of both de-risking the technology company's power needs and also our development pipeline. It is widely estimated that global electricity consumption from data centers will increase to approximately 10% of total electricity demand by 2030, up from approximately 2% today.

Stephen Gallagher: This is leading our partners to engage in commercial conversations earlier in the process to develop solutions with us.

Which has the dual benefit of both de risking the technology companies power needs.

And also our development pipeline.

Stephen Gallagher: It is widely estimated that global electricity consumption from data centers will increase to approximately 10% of total electricity demand by 2030.

Up from approximately 2% today.

Stephen Gallagher: To put this in context, this means that to satisfy the needs of data centers alone, which doesn't factor in the penetration of EVs or broader electrification, additional generation capacity will be required, equivalent to the size of the current US grid. For the better part of a decade, we have been positioning our business to capitalize on these trends. By building a leading global development platform, combined with our early focus on corporate power marketing capabilities, this has allowed us to serve the needs of the largest and fastest-growing buyers of green power. The global technology companies have been among the largest corporate customers of our businesses now for years, as we have differentiated ourselves with our scale and credibility, delivering new energy projects on time to enable their growth.

Steven Eckert: To put this in context, this means that to satisfy the needs of data centers alone, which doesn't factor in the penetration of EVs or broader electrification, additional generation capacity will be required, equivalent to the size of the current US grid.

Stephen Gallagher: To put this in context.

Stephen Gallagher: Means that to satisfy the needs of data centers alone.

Stephen Gallagher: Which doesn't factor in the penetration of Evs are broader electrification.

Stephen Gallagher: Additional generation capacity will be required equivalent to the size of the current U S grid.

Steven Eckert: For the better part of a decade, we have been positioning our business to capitalize on these trends. By building a leading global development platform, combined with our early focus on corporate power marketing capabilities, this has allowed us to serve the needs of the largest and fastest-growing buyers of green power. The global technology companies have been among the largest corporate customers of our businesses now for years, as we have differentiated ourselves with our scale and credibility, delivering new energy projects on time to enable their growth.

Stephen Gallagher: For the better part of a decade.

Stephen Gallagher: We have been positioning our business to capitalise on these trends by building a leading global development platform, combined with our early focus on corporate power marketing capabilities. This has allowed us to serve the needs of the largest and fastest growing buyers of green power. Global technology companies have been among the largest corporate customers of our businesses for years, as we have differentiated ourselves with our scale and credibility, delivering new energy projects on time to enable their growth. Our ability to deliver 24-7 clean power solutions at scale and across geographies positions our business to continue to be a major beneficiary of this robust demand growth. Furthermore, our ability to provide unique tailored solutions at scale allows us to avoid competition and drive better returns in the bilateral markets.

Stephen Gallagher: We have been positioning our business to capitalize on these trends.

Stephen Gallagher: By building, a leading global development platform.

Stephen Gallagher: Combined with our early focus on corporate power marketing capabilities.

Stephen Gallagher: This has allowed us to serve the needs of the largest and fastest growing players of green power.

Stephen Gallagher: The global technology companies have been among the largest corporate customers of our businesses now for years.

Stephen Gallagher: As we have differentiated ourselves with our scale and credibility delivering new energy projects on time to enable their growth.

Stephen Gallagher: Our ability to deliver 24/7 clean power solutions at scale and across geographies, positions our business to continue to be a major beneficiary of this robust demand growth. Further, our ability to provide unique and tailored solutions at scale allows us to avoid competition and drive better returns in the bilateral markets. We have signed contracts to provide over 60 terawatt-hours of power over the past two years to these large technology companies, an amount we expect to increase dramatically in the coming years. As a result, going forward, we expect the vast majority of our new renewable power development will be contracted to corporate customers, where we are seeing strong demand from our differentiated offerings at attractive contract terms.

Steven Eckert: Our ability to deliver 24/7 clean power solutions at scale and across geographies, positions our business to continue to be a major beneficiary of this robust demand growth. Further, our ability to provide unique and tailored solutions at scale allows us to avoid competition and drive better returns in the bilateral markets.

Stephen Gallagher: Our ability to deliver 24, seven clean power solutions at scale and across geographies positions our business to continue to be a major beneficiary of this robust demand growth.

Further our ability to provide unique and tailored solutions at scale.

Stephen Gallagher: Those us to avoid competition and drive better returns in the bilateral markets.

Steven Eckert: We have signed contracts to provide over 60 terawatt-hours of power over the past two years to these large technology companies, an amount we expect to increase dramatically in the coming years. As a result, going forward, we expect the vast majority of our new renewable power development will be contracted to corporate customers, where we are seeing strong demand from our differentiated offerings at attractive contract terms.

Stephen Gallagher: We have signed contracts to provide over 60 terawatt hours of power over the past two years to these large technology companies.

Stephen Gallagher: We have signed contracts to provide over 60 terawatt hours of power over the past two years to these large technology companies, an amount we expect to increase dramatically in the coming years. As a result, going forward, we expect a vast majority of our new renewable power development will be contracted to corporate customers, where we are seeing strong demand for our differentiated offerings at Attractive Contractor. Currently, we have approximately 22 terawatt hours per year of generation contracted to Copper Coast, representing approximately 30% of our total contract volume, over double the volumes contracted to these types of customers five years ago. Based on our existing development pipeline, we expect contracted generation to corporate customers to double again by 2028, to approximately 44 terawatt hours per year, or 45% of our contracted volume. With that, I will pass it on to Wyatt to discuss our operating results and financial position. Thank you, Stephen, and good morning, everyone.

Stephen Gallagher: An amount, we expect to increase dramatically in the coming years.

Stephen Gallagher: As a result going forward, we expect the vast majority of our new renewable power development will be contracted to corporate customers.

Stephen Gallagher: Where we're seeing strong demand from our differentiated offerings.

Stephen Gallagher: The attractive contract terms.

Stephen Gallagher: Currently, we have approximately 22 TWh per year of generation contracted to corporate customers, representing approximately 30% of our total contract volumes, over double the volumes contracted to these types of customers 5 years ago. Based on our existing development pipeline, we expect contracted generation to corporate customers to double again by 2028 to approximately 44 TWh per year, or 45% of our contracted volumes. With that, I will pass it on to Wyatt to discuss our operating results and financial position.

Steven Eckert: Currently, we have approximately 22 TWh per year of generation contracted to corporate customers, representing approximately 30% of our total contract volumes, over double the volumes contracted to these types of customers 5 years ago. Based on our existing development pipeline, we expect contracted generation to corporate customers to double again by 2028 to approximately 44 TWh per year, or 45% of our contracted volumes. With that, I will pass it on to Wyatt to discuss our operating results and financial position.

Stephen Gallagher: Currently we have approximately 22 terawatt hours per year of generation contracted to corporate customers.

Stephen Gallagher: Representing approximately 30% of our total contract volumes.

Stephen Gallagher: Overdose.

Stephen Gallagher: <unk> contracted to these types of customers five years ago.

Stephen Gallagher: Based on our existing development pipeline, we expect contracted generation to carpet customers to double again by 2020 as to approximately 44 terawatt hours per year or 45% of our contracted volumes.

Ways: With that I will pass it onto ways to discuss our operating results and financial position.

Stephen Gallagher: Okay.

Wyatt Hartley: Thank you, Stephen, and good morning, everyone. Our operations continued to perform well this quarter, benefiting from the diversification of our fleet and strong all-in power prices. We delivered solid results in Q4 with FFO of $0.38, up 9% year-over-year, and on a full year basis, we delivered record FFO at $1.1 billion or $1.67 per unit, a 7% increase over the prior year. While our results fell slightly below our target of 10%+ FFO per unit growth for the year, largely due to later than expected transaction closings during Q4, we remain well-positioned to achieve our goal going into 2024 and beyond.

Ways: Thank you Steven and good morning, everyone.

Wayne: Our operations continued to perform well this quarter benefiting from the diversification of our fleet and strong all in power prices.

Wyatt: Our operations continued to perform well this quarter, benefiting from the diversification of our fleet and strong all-in power prices. We delivered solid results in the fourth quarter with FFO of $0.38, up 9% year-over-year, and on a full-year basis, we delivered record FFO at $1.1 billion, or $1.67 per unit, a 7% increase over the prior year. While our results fell slightly below our target of 10% plus FFO per unit growth for the year, largely due to later than expected transaction closings during the fourth quarter, we remain well positioned to achieve our goal going into 2024 and beyond. We are already seeing the benefits of our growth activities, which were back-end weighted this year, as we commissioned nearly half of our almost 5,000 megawatts of new capacity in the fourth quarter. We are also seeing strong cash flows from the closing of the previously mentioned major acquisitions that took place in the final three months of the year and are expected to contribute over $100 million in incremental annual FFO.

Wayne: We delivered solid results in the fourth quarter was <unk> 38.

Ways: Up 9% year over year and on a full year basis, we delivered record <unk> at $1 1 billion or $1 57 per unit, a 7% increase over the prior year.

While our results fell slightly below our target of 10% plus <unk> per unit growth for the year largely due to later than expected transaction closings during the fourth quarter, we remain well positioned to achieve our goal going into 2024 and beyond.

Wyatt Hartley: We are already seeing the benefits of our growth activities, which were back-end-weighted this year, as we commissioned nearly half of our almost 5,000 megawatts of new capacity in Q4. We are also seeing strong cash flows from the closing of the previously mentioned major acquisitions that took place in the final three months of the year, and are expected to contribute over $100 million in incremental annual FFO. We also expect to receive an uplift as our fleet reverts to long-term average generation, particularly from our hydro assets, where we often see cyclicality. During the year, we continued to execute on our growth initiatives, as Connor highlighted, while simultaneously strengthening our balance sheet. We executed on almost $15 billion in non-recourse financings, generating almost $500 million in up financing proceeds to Brookfield Renewable.

Ways: We are already seeing the benefits of our growth activities, which were back end weighted this year as we commissioned nearly half of our almost 5000 megawatts of new capacity in the fourth quarter.

Ways: We are also seeing strong cash flows from the closing of the previously mentioned major acquisitions that took place in the final three months of the year and are expected to contribute over $100 million in incremental annual <unk>.

Wyatt Hartley: We also expect to receive an uplift as our fleet reverts to long-term average generation, particularly from our hydro assets, where we often see cyclicality. During the year, we continued to execute on our growth initiatives, as Connor highlighted, while simultaneously strengthening our balance sheet. We executed on almost $15 billion in non-recourse financings, generating almost $500 million in up financing proceeds to Brookfield Renewable.

Ways: We also expect to receive an uplift as our fleet reverts to long term average generation, particularly from our hydro assets, where we often see cyclicality.

Wyatt: We also expect to receive an uplift as our fleet reverts to long-term average generation, particularly from our hydro assets, where we often... College. During the year, we continue to execute on our growth initiatives, as Connor highlighted, while simultaneously strengthening our balance. We executed on almost $15 billion in non-recourse financing, generating almost $500 million in up-financing proceeds to Brookfield Renewables.

Ways: During the year, we continued to execute on our growth initiatives as Conor highlighted while simultaneously strengthening our balance sheet.

Ways: We executed on almost $15 billion in non recourse financing generated almost $500 million enough financing proceeds to Brookfield renewable.

Connor Teskey: ...We were also successful with our capital recycling program, which we continue to scale with our development growth, generating $800 million of proceeds over the past 12 months, representing over 3 times our invested capital. We take a disciplined and practical approach to asset rotation, looking to sell assets when they are in demand and attracting valuations at or above our internal assessments, regardless of technology or geography. This approach has served us well and generated returns above our underwriting targets for investors. During the second half of the year, we saw a disconnect between the price of our shares in the public markets and the underlying value of our business, and took that opportunity to repurchase 2 million units under our Normal Course Issuer Bid.

Wyatt Hartley: ...We were also successful with our capital recycling program, which we continue to scale with our development growth, generating $800 million of proceeds over the past 12 months, representing over 3 times our invested capital. We take a disciplined and practical approach to asset rotation, looking to sell assets when they are in demand and attracting valuations at or above our internal assessments, regardless of technology or geography.

Ways: We were also successful with our capital recycling program, which we continue to scale with our development growth generating $800 million of proceeds over the past 12 months, representing over three times our invested capital.

Wyatt: We were also successful with our capital recycling program, which we continue to scale with our development growth, generating $800 million in proceeds over the past 12 months, representing over three times our invested capital. We take a disciplined and practical approach to asset rotation, looking to sell assets when they are in demand and attracting valuations at or above our internal assessment, regardless of technology or geography. This approach has served us well and generated returns above our underwriting targets for investors. During the second half of the year, we saw a disconnect between the price of our shares and the public market and the underlying value of our business, and took that opportunity to repurchase 2 million units under our normal course issuer bid.

We take a disciplined and practical approach to asset rotation looking to sell assets when they are in demand and attractive valuations at or above our internal assessments, regardless of technology or geography.

Wyatt Hartley: This approach has served us well and generated returns above our underwriting targets for investors. During the second half of the year, we saw a disconnect between the price of our shares in the public markets and the underlying value of our business, and took that opportunity to repurchase 2 million units under our Normal Course Issuer Bid.

Ways: This approach has served us well and generated returns above our underwriting targets for investors.

Ways: During the second half of the year, we saw a disconnect between the price of our shares in the public markets and the underlying value of our business and took that opportunity to repurchase 2 million units under our normal course issuer bid.

Connor Teskey: Looking forward, we will continue to allocate capital based on where we're seeing the best risk-adjusted returns and remain confident we will continue to create meaningful value for our investors going forward. In closing, we remain focused on delivering 12 to 15% long-term total returns for our investors, while remaining disciplined allocators of capital, leveraging our deep funding sources and operational capabilities to enhance and de-risk our business. On behalf of the board and management, we thank all our unit holders and shareholders for the ongoing support. We are excited about Brookfield Renewable's future and look forward to updating you on our progress throughout 2024. 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.

Wyatt Hartley: Looking forward, we will continue to allocate capital based on where we're seeing the best risk-adjusted returns and remain confident we will continue to create meaningful value for our investors going forward. In closing, we remain focused on delivering 12 to 15% long-term total returns for our investors, while remaining disciplined allocators of capital, leveraging our deep funding sources and operational capabilities to enhance and de-risk our business.

Ways: Looking forward, we will continue to allocate capital based on where we're seeing the best risk adjusted returns and remain confident we will continue to create meaningful value for our investors going forward.

Wyatt: Looking forward, we will continue to allocate capital based on where we're seeing the best risk-adjusted returns and remain confident we will continue to create meaningful value for our investors going forward. In closing, we remain focused on delivering 12-15% long-term total returns for our investors while remaining disciplined allocators of capital. Leveraging Our Deep Funding Sources and Operational Capabilities to enhance and de-risk our On behalf of the board and management, we thank all our unit holders and shareholders for the ongoing support. We are excited about Brookfield Renewables' future and look forward to updating you on our progress throughout 2021. That concludes our formal remarks for today's call. Thank you for joining us this morning.

Ways: In closing, we remain focused on delivering 12% to 15% long term total returns for our investors, while remaining disciplined allocators of capital and leveraging our deep funding sources and operational capabilities to enhance and Derisk our business.

Wyatt Hartley: On behalf of the board and management, we thank all our unit holders and shareholders for the ongoing support. We are excited about Brookfield Renewable's future and look forward to updating you on our progress throughout 2024. 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.

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

Speaker Change: We are excited about Brookfield renewable future and look forward to updating you on our progress throughout 2024.

Speaker Change: 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.

Operator: And with that, I'll pass it back to our operator for questions. As a reminder, if you'd like to ask a question at this time, press Star 1-1 on your telephone and wait for your name to be announced. Withdraw your question. Express Star 11.

Operator: As a reminder, if you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Sean Stewart with TD Securities.

Speaker Change: As a reminder, if you'd like to ask a question at this time. Please press star one one on your telephone and wait for your name to be announced.

Speaker Change: Withdraw your question. Please press star one again.

Operator: Thank you. Please stand by while we compile the Q&A. Our first question comes from the line of Sean Steuart with TD. Good morning.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Sean Stewart with TD Securities.

Sean Steuart: Thank you. Good morning. A few questions on the corporate PPA environment. Can you give us perspective on price terms, how that's trended? I know there's an upward trend, but specific to the contracts you're signing, how that trend for pricing has evolved and how that tension relates to contract duration. I know there's been a general trend towards longer-term contracts. How does that interplay with the price terms you can attain right now?

Sean Steuart: Thank you good morning.

Sean Steuart: A few questions on the corporate PPA environment. Can you give us perspective on price terms, how that's trended? I know there's an upward trend, but specific to the contracts you're signing, how that trend for pricing has evolved, and how that tension relates to contract duration?

Sean Steuart: Two questions on corporate PPA environment.

Sean Steuart: Can you give us perspective on price terms, how thats trended I know theres, an upward trend, but specific to the contracts here <unk>.

Sean Steuart: Youre, signing how that shrunk for pricing has evolved.

Sean Steuart: How that pension relates to contract duration, I know theres been a general trend towards longer term contracts.

Connor Teske: I know there's been a general trend towards longer-term contracts. How does that interplay with the price trend? Good morning, Sean.

How does that interplay with the price terms you can you can attain right now.

Connor Teskey: Good morning, Sean. Thanks for the question. So maybe we'll come at this in a slightly different way, but, but we'll answer your question head-on. What we are seeing as a result of significant increases in new electricity demand, this is being driven by the data center demand. This is being driven by increased penetration of EVs. This is being driven by electrification of industrial processes. Right now there is far more corporate offtake demand than there are ready-to-build projects. In key locations, there is simply a supply-demand imbalance in favor of those that have ready-to-build projects in key locations.

Speaker Change: Good morning, Sean.

Connor Teske: Thanks for the question. Maybe we'll come at this in a slightly different way, but we'll answer your question head-on. What we are seeing as a result of significant increases in new electricity demand, this is being driven by data center demand, this is being driven by increased penetration of EVs, this is being driven by electrification of industrial processes, is right now there is far more corporate off-take demand than there are ready-to-build projects. In key locations, there is simply a supply-demand imbalance in favor of those that have ready-to-build projects in key locations. And the way this shows up in terms of pricing is the dynamic that we've been seeing for a number of years now, which is that we are able to pass through higher capex costs, higher funding costs, through to the offtaker in the form of higher PPA prices while preserving our development margins.

Sean: For the question so maybe it will come out.

Speaker Change: In a slightly different way, but we will answer your question head on.

Speaker Change: What we are seeing as a result of significant increases in.

Speaker Change: New electricity demand this is being driven by.

Speaker Change: The data center demand this is being driven by increased penetration of Evs. This is being driven by.

Speaker Change: Electrification of industrial processes is right now there is far more corporate offtake demand than there are ready to build projects that in key locations. There is simply.

Speaker Change: Supply demand imbalance.

Speaker Change: In favor of those that have ready to build projects in key locations.

Connor Teskey: And the way this shows up in terms of pricing is the dynamic that we've been seeing for a number of years now, which is we are able to pass through higher CapEx costs, higher funding costs, through to the offtaker in the form of higher PPA prices, while preserving our development margin. And therefore, we are able to continually service this increased amount of demand and put more projects through into that increased amount of demand at the same development returns that we were seeing previously, if not even a little bit higher today because of that really robust supply-demand dynamic. So that's what we're seeing in terms of pricing. It will obviously depend on the respective power market and things like CapEx and funding costs within those respective markets.

Speaker Change: And the way this shows up in terms of pricing is the dynamic that we've been seeing for a number of years now which is we are able to pass through higher capex cost higher funding costs through to the.

Speaker Change: The off taker in the form of higher PPA prices, while preserving our development margin.

Connor Teske: And therefore, we are able to continually service this increased amount of demand and put more projects through to that increased amount of demand at the same development returns that we were seeing previously, if not even a little bit higher today because of that really robust supply-demand dynamic. So that's what we're seeing in terms of pricing. It will obviously depend on the respective power market and things like CapEx and funding costs within those respective markets.

Speaker Change: And therefore, we are able to continually services increased.

Speaker Change: The demand and put more projects through into that increased amount of demand at the same development returns that we were seeing previously if not even a little bit higher today because of that really robust supply demand dynamic. So that's what we're seeing in terms of pricing it will obviously.

Connor Teskey: So that's what we're seeing in terms of pricing. It will obviously depend on the respective power market and things like CapEx and funding costs within those respective markets.

Speaker Change: <unk>.

Speaker Change: On the respective power market and things like Capex and funding costs within those respective markets, but what we are seeing because of that increased demand is the ability to preserve or even perhaps marginally enhance our development margins.

Connor Teskey: But what we are seeing because of that increased demand is the ability to preserve or even perhaps marginally enhance our development margins. And then in terms of contract duration, one thing we have been very uncompromising about for years now is there's been this perception that as renewables over the last 10 years came off government feed and tariffs increasingly onto corporate contracts, that meant that contract durations got shorter. We simply aren't seeing that. And we're seeing significant demand for long-term corporate contracts, 15, 17, 18, 20 years. And those are obviously very attractive to us and can be financed very attractively if we deal with high credit quality counterparties. And that's really the bulk of demand that we're seeing today.

Connor Teske: But what we are seeing because of that increased demand is the ability to preserve or even perhaps marginally enhance our development margins. And then, in terms of contract duration, one thing we have been very uncompromising about for years now is that there is this perception that as renewables over the last 10 years came off government feed-in tariffs and increasingly onto corporate contracts, that meant that contract durations got shorter. We simply aren't seeing that.

Speaker Change: And then in terms of contract duration one thing.

Speaker Change: We have been very uncompromising about for years now is there's been this perception that.

Speaker Change: As renewables over the last 10 years came off government feed in tariffs increasingly onto corporate client tracks that meant that contract durations got shorter.

Connor Teskey: We simply aren't seeing that. And we're seeing significant demand for long-term corporate contracts, 15, 17, 18, 20 years. And those are obviously very attractive to us and can be financed very attractively if we deal with high credit quality counterparties. And that's really the bulk of demand that we're seeing today.

Speaker Change: We arent seeing that and we're seeing significant demand for long term quarter. Blake contract 15, 17, 18, 20 years and those are obviously very attractive to us and can be financed very attractively. If we deal with high credit quality Counterparties and Thats really the bulk of demand that we're seeing today.

Connor Teske: And we're seeing significant demand for long-term corporate contracts, 15, 17, 18, 20 years. And those are obviously very attractive to us and can be financed very attractively if we deal with high credit-quality counterparties. And that's really the bulk of the demand that we're seeing today. Thanks for that detail.

Sean Steuart: Thanks for that detail. And then just one follow-on with respect to data centers. I know at least in the US, the location of those data centers tends to be quite concentrated in specific regions. Like, how do you expect that will evolve, and can you give perspective on Brookfield's ability to meet demand in those specific areas?

Speaker Change: Thanks for that detail and then just one follow on with respect to data centers I know at least in the U S.

Sean Steuart: And then just one follow-on with respect to data centers. I know, at least in the US, the location of those data centers tends to be quite concentrated in specific regions. How do you expect that will evolve, and can you give perspective on Brookfield's ability to meet demand?

Speaker Change: The location of those data centers tend to be quite concentrated in specific regions.

Speaker Change: How do you expect that will evolve then can you give perspective on Brookfield ability to meet demand.

Speaker Change: In those specific areas.

Connor Teske: Sean, it's a really astute question because you're absolutely right. This demand, while significant, is not equal in all places. The power needs to be in a place where it can service that corporate demand load, but we are seeing a number of dynamics. First and foremost, the ability to work with the counterparties, where is there the potential to co-locate new data centers near power generation that can be built? And our really strong relationships with the large corporate offtakers mean we can proactively work with them to identify those locations, and then either through M&A or through Greenfield Development Prospecting, we can look to create a development pipeline in those regions to service that demand. The second point I would make in regards to your question here is that the opportunity to service this corporate demand is really today. It's not something that we're seeing for the future; this is happening in real time.

Connor Teskey: Sean, it's a really astute question because you're absolutely right. This demand, while significant, is not equal in all places. The power needs to be in a place where it can service that corporate demand load. But we are seeing a number of dynamics. First and foremost, the ability to work with the counterparties, where is there the potential to co-locate new data centers near power generation that can be built? And our really strong relationships with the large corporate off-takers, is we can proactively work with them to identify those locations, and then either through M&A or through greenfield development prospecting, we can look to create development pipeline in those regions to service that demand.

Sean It's a really astute question because you are absolutely right.

Speaker Change: This demand well significant.

Speaker Change: It is not equal in all places.

Sean: The power needs to be in a place where it can service that that corporate demand load, but we are seeing a number of dynamics.

Connor Teskey: First and foremost, the ability to work with the counterparties, where is there the potential to co-locate new data centers near power generation that can be built? And our really strong relationships with the large corporate off-takers, is we can proactively work with them to identify those locations, and then either through M&A or through greenfield development prospecting, we can look to create development pipeline in those regions to service that demand.

Sean: First and foremost the ability to work with the counter parties, where where is there the potential to co locate new data centers near power.

Sean: Generation that can be built and a really strong relationships with the large corporate off takers is we can proactively work with them to identify those locations and then either through M&A or through Greenfield development prospecting, we can look to create development pipeline in those regions.

To service that demand.

Connor Teskey: The second point I would make in regards to your question here is: the opportunity to service this corporate demand is really today. It's not something that we're seeing for the future. This is happening in real time. So in order to service this corporate demand, it's not simply having the capability or the capital to do it. You actually need to already have a very large pipeline of projects. And this is where our strategy for the last few years is really coming to fruition, where we have been focused on buying premium developers with large development pipelines in core markets, really to ensure that we are well-positioned to meet this demand as it has accelerated.

The second point I would make in regards to your question here is the.

Sean: The opportunity to service this corporate demand is really today.

Sean: It's not something that we're seeing for the future. This is happening in real time. So in order to service. This corporate demand. It is not simply having the capability of the capital to do it you actually need to already have a very large pipeline of projects and this is where our strategy for the last few years.

Connor Teske: So in order to service this corporate demand, it's not simply having the capability or the capital to do it; you actually need to have a very large pipeline of projects. This is where our strategy for the last few years is really coming to fruition, where we have been focused on buying premium developers with large development pipelines in core markets, really to ensure that we are well positioned to meet this demand as it accelerates. And today, those pipelines are very valuable because they are in the ground, they exist, they are working through their development process, and they can meet that demand in the near term, as opposed to simply planning for projects three, five, or seven years out. That's a great detail. Thanks, Connor. I will get back to you. Our next question comes from the line of Robert Hope with Scotiabank. Good morning, everyone. I wanted to stick with the data center for today. Excuse me.

Connor Teskey: You actually need to already have a very large pipeline of projects. And this is where our strategy for the last few years is really coming to fruition, where we have been focused on buying premium developers with large development pipelines in core markets, really to ensure that we are well-positioned to meet this demand as it has accelerated.

Sean: <unk> is really coming to fruition, where we have been focused on buying premium developers with large development pipelines in core markets really to ensure that we are well positioned to meet this demand as it has accelerated and today those pipelines are very valuable because they are in the ground there.

Connor Teskey: And today, those pipelines are very valuable because they are in the ground, they are existing, they are working through their development process, and they can meet that demand in the near term, as opposed to simply planning for projects 3 to 5 or 7 years out.

Sean: Our existing they are working through their development process and they can meet that demand in the near term as opposed to simply planning for projects 385 or seven years out.

Sean Steuart: That's great detail. Thanks, Connor. I will get back in the queue.

Speaker Change: That's great detail. Thanks Conor.

Speaker Change: Ill get back in queue.

Operator: Our next question comes from the line of Robert Hope with Scotiabank.

Speaker Change: Our next.

Speaker Change: <unk> comes from the line of Robert Hope with Scotiabank.

Robert Hope: Good morning, everyone. Wanted to stick on the data center theme for today. So when you're looking at your development pipeline and the contracting strategy there, like how can you maybe add a little bit of color on how it's moved away from, you know, single assets to more groups of assets to serve this demand? And then when you think about the opportunity set in front of you, you know, do large developers, such as yourself, with a large pipeline, should you disproportionately benefit versus the smaller developers in this, you know, we'll call it increasing opportunity set so that, you know, in essence, your market share should increase?

Robert Hope [Managing Director: Good morning, everyone. Wanted to stick on the data center theme for today. So when you're looking at your development pipeline and the contracting strategy there, like how can you maybe add a little bit of color on how it's moved away from, you know, single assets to more groups of assets to serve this demand?

Robert Hope: Good morning, everyone.

Robert Hope: Stick on the data center.

Robert Hope: <unk> for today.

Robert Hope: Excuse me so when Youre looking at your development pipeline and the contracting strategy there like how can you maybe add a little bit.

Connor Teske: So when you're looking at your development pipeline and the contracting strategy there, like how can you maybe add a little bit of color to how it's moved away from single assets to more groups of assets to serve this demand? And then when you think about the opportunity set in front of you, you know, do large developers such as yourself with a large pipeline, should you disproportionately benefit versus the smaller developers in this, we'll call it, increasing opportunity set so that, in essence, your market share should increase? Sure. So, good morning, Rob, and thanks for the question. You are right about that.

Robert Hope: Color of how it's moved away from single assets to more groups of assets to serve this demand and then when you think about the opportunity set in front of you do large developers such as yourself with a large pipeline should you disproportionately.

Robert Hope [Managing Director: And then when you think about the opportunity set in front of you, you know, do large developers, such as yourself, with a large pipeline, should you disproportionately benefit versus the smaller developers in this, you know, we'll call it increasing opportunity set so that, you know, in essence, your market share should increase?

Robert Hope: Benefit versus the smaller developers in this well call it increasing.

Robert Hope: The opportunity set so that in essence your market share should increase.

Connor Teskey: Sure. So, good morning, Rob, and thanks for the question. You are right that this dynamic is going to lead to concentrations in certain regions, this data center demand dynamic. And to be clear, there is without question the greatest concentration of data center growth that needs power supply is in the United States. And we are very fortunate that over half of our development pipeline globally sits in the United States. The second thing to highlight here is, yes, individual projects might be signing contracts to support individual data centers. The corporate counterparty that backstops that contract is the corporate holdco of these large tech companies. We have a corporate guarantee from the, you know, trillion-dollar-plus market cap companies around the world.

Speaker Change: Sure so.

Speaker Change: Good morning, Robin and thanks for the question.

Speaker Change: You are right that.

Connor Teske: This dynamic is going to lead to concentrations in certain regions, this data center demand dynamic. And to be clear, there is without question the greatest concentration of data center growth that needs power supply in the United States. And we are very fortunate that over half of our development pipeline globally sits in the United States. The second thing to highlight here is that, yes, well, individual projects might be signing contracts to support individual data centers. The corporate counterparty that backstops that contract is the corporate holdco of these large tech companies. We have a corporate guarantee from the, you know, trillion dollar plus market cap companies around the world. It is not a ring-fenced counterparty credit individualized to a singular data center. And I think that's a really important dynamic to understand because we take great comfort that as this growing opportunity set continues to expand, these are literally the best counterparties around the world. These are not individual assets.

Speaker Change: This dynamic is going to lead to concentrations in certain regions, if data center demand dynamic and to be clear there is without question the greatest.

Speaker Change: Oncentration of data center growth that needs power supply is in the United States and we are very fortunate that over half of our development pipeline glue.

Speaker Change: Globally.

Speaker Change: Fifth.

Speaker Change: In the United States.

Connor Teskey: The second thing to highlight here is, yes, individual projects might be signing contracts to support individual data centers. The corporate counterparty that backstops that contract is the corporate holdco of these large tech companies. We have a corporate guarantee from the, you know, trillion-dollar-plus market cap companies around the world.

Speaker Change: The second thing to highlight here is yes, well individual projects might be signing.

Speaker Change: Signing contracts to support individual data centers, the corporate counterparty that backstops that contract is the corporate Holdco of these large tech companies, we have a corporate guarantee from the.

Speaker Change: A trillion dollar plus market cap companies around the world. It is not a ring fenced.

Connor Teskey: It is not a ring-fenced counterparty credit individualized to a singular data center. And I think that's a really important dynamic to understand because we take great comfort that as this growing opportunity set continues to expand, these are literally the best counterparties around the world. These are not individual assets. These are the large tech companies themselves that are the counterparties. And then to your question about scale, this is going to play into the hands of the larger players, but I think the reason for that is perhaps a little bit nuanced, and we would really focus on two things. The power demand that is required by these large tech companies is truly remarkable. Sometimes it's tough to put the magnitudes in context.

Speaker Change: Third party credit individualized to a singular data center and I think that's a really important dynamic to understand because we take great comfort that as this growing opportunity set continues to expand these are literally the best counter parties around the world.

Speaker Change: These are not individual assets. These are the large tech companies themselves that are the counterparties.

Connor Teskey: These are the large tech companies themselves that are the counterparties. And then to your question about scale, this is going to play into the hands of the larger players, but I think the reason for that is perhaps a little bit nuanced, and we would really focus on two things. The power demand that is required by these large tech companies is truly remarkable. Sometimes it's tough to put the magnitudes in context.

Connor Teske: And then to your question about scale, this is going to play into the hands of the larger players, but I think the reason for that is perhaps a little bit nuanced, and we should really focus on two things. The power demand that is required by these large tech companies is truly remarkable. Sometimes it's tough to put the magnitudes in context.

And then to your question about scale.

Speaker Change: <unk>.

Speaker Change: This is going to play into the hands of the larger players, but I think the reason for that is perhaps a little bit nuanced and we would really focus on two things.

Speaker Change: The power demand that is required.

Speaker Change: By these large tech companies is truly remarkable sometimes it's tough to put the magnitudes in context and therefore, if you are a large technology company looking to secure your power supply <unk>.

Connor Teskey: And therefore, if you are a large technology company looking to secure your power supply, you can either work with literally thousands of individual small developers, or you can work with a smaller number of very large developers. And we are very fortunate to be in that group, or even at the top of the list when it comes to that group that can provide to meet the needs of these large technology companies at a scale that few others can, and really move the needle for them in terms of debottlenecking their future growth. So that would be point one. The other point that should not be underestimated, and why we are so constructive on this market, is the most important thing to these counterparties is that projects are delivered. They are delivered on time.

Connor Teske: And therefore, if you are a large technology company looking to secure your power supply, you can either work with literally thousands of individual small developers, or you can work with a smaller number of very large developers. And we are very fortunate to be in that group, or even at the top of the list when it comes to that group, that can provide for the needs of these large technology companies at a scale that few others can and really move the needle for them in terms of de-bottlenecking their future growth. So that would be point number one.

Speaker Change: And either work with literally thousands of individual small developers or you can work with a smaller number of very large developers and we are very fortunate to be in that group or even at the top of the list. When it comes to that group that can provide to meet the needs of these large.

Speaker Change: Technology companies at a scale that few others can and really move the needle.

Speaker Change: For them in terms of deep bottlenecking their future growth.

So that would be 0.1, the other point that should not be underestimated and why we are so constructive on this market is the most.

Connor Teskey: The other point that should not be underestimated, and why we are so constructive on this market, is the most important thing to these counterparties is that projects are delivered. They are delivered on time.

Connor Teske: The other point that should not be underestimated and why we are so constructive in this market is that the most important thing to these counterparties is that projects are delivered, they are delivered on time, and the developer does not walk away from the project if, you know, they can't get the equipment, or they get knocked off schedule because of supply chain or shipping issues.

Speaker Change: The important thing to these counterparties is that projects are delivered.

Speaker Change: They are delivered on time.

Connor Teskey: And that you, the developer does not walk away from the project if, you know, they can't get the equipment or they get knocked off schedule because of supply chain or shipping issues. And our global capabilities and our ability to push through issues using our operational capabilities when they arrive, ensures that we are amongst the most reliable counterparties to these large tech companies. The power will be delivered on schedule, and I would say that is a completely underappreciated benefit for large players such as us, because the worst thing for the tech company is if the power isn't there and the data center can't turn on.

Speaker Change: The developer does not walk away from the projects if they can't get the equipment or they they get knocked off schedule because of supply chain are shipping issues, and our global capabilities and our ability to push through issues using our operational K.

Connor Teske: And our global capabilities and our ability to push through issues using our operational capabilities when they arise ensures that we are amongst the most reliable counterparties to these large tech companies; the power will be delivered on schedule. And I would say that is a completely underappreciated benefit for large players such as us. Because the worst thing for the tech company is if the power isn't there, and the data center can't turn on.

Speaker Change: Abilities when they arrive ensures that we are amongst the most reliable counterparties to these large tech companies. The power will be delivered on schedule and I would say that is a completely underappreciated.

<unk>.

Speaker Change: Benefit for a large players such as us because the worst thing for the Tech company is if the power isn't there in the data center can't turn on and this is why we're finding them to be very constructive in terms of contract terms when working with large reliable counterparties such as ourselves because the most important thing to them.

Connor Teskey: And this is why we're finding them to be very constructive in terms of contract terms when working with large, reliable counterparties such as ourselves, because the most important thing to them is that reliability and that the project will be delivered on time. And that's a reputation and a capability we've been reinforcing and enhancing for years now.

Connor Teske: And this is why we find them to be very constructive in terms of contract terms when working with large, reliable counterparties such as ourselves, because the most important thing to them is reliability and that the project will be delivered on time. And that's a reputation and a capability we've been reinforcing and enhancing for years. I appreciate that, and maybe, as a follow-up and more broadly, with the recovery in the equity markets. How are you thinking about allocating capital in 2024? Does the returns kind of skew more to the development side versus the buy side right now? Or how are you seeing that opportunity set?

Speaker Change: Is that reliability and that the project will be delivered on time and Thats a reputation and a capability we have been.

Speaker Change: <unk>, forcing and enhancing for years now.

Robert Hope: Appreciate that. Maybe as a follow-up and, more broadly, with the recovery in the equity markets, you know, how are you thinking about allocating capital in 2024? Does the returns kind of skew more to the development side versus the buy side right now, or how are you seeing that opportunity set?

Robert Hope [Managing Director: Appreciate that. Maybe as a follow-up and, more broadly, with the recovery in the equity markets, you know, how are you thinking about allocating capital in 2024? Does the returns kind of skew more to the development side versus the buy side right now, or how are you seeing that opportunity set?

Speaker Change: I appreciate that.

Speaker Change: Maybe as a follow up and more broadly with our current naphthalene markets.

Speaker Change: How are you thinking about allocating capital in 2024 does the returns kind of skew more to the development side versus the buy side right now or how are you seeing that opportunity set.

Connor Teskey: Certainly. Really what we've seen, particularly in the last, call it, maybe 4 weeks of Q4 and into 2024, is what we've seen is a stabilization in interest rates. And, you know, in 2023, rates were going up and up and up. And the great part about our business is it, this is a real returns business. It works whether interest rates are at 3% or 4% or 5%. But everyone can appreciate that when markets are uncertain and rates seem like they're going up in perpetuity, that becomes a more tougher market for people to transact in. And as we kind of turn the page into a new calendar year here, what we have is stability in interest rates.

Speaker Change: Certainly.

Connor Teske: Certainly, really what we've seen, particularly in the last, call it, maybe four weeks of Q4 and into 2024 is what we've seen as a stabilization in interest rates. You know, in 2023, rates were going up and up and up, and the great part about our business is this is a real returns business. It works whether interest rates are at 3% or 4% or 5%, but everyone can appreciate that when markets are uncertain and rates seem like they're going up in perpetuity, that becomes a tougher market for people to transact in. And as we kind of turn the page into a new calendar year here, what we have is... stability and interest rates. Maybe they land at three and three quarters, maybe they land at four and a half, but they're going to be within a pretty tight range here.

Speaker Change: Really what we've seen.

Speaker Change: Particularly in the last call it.

Speaker Change: In may.

Speaker Change: Maybe four weeks of Q4 and into 2024 is what we've seen is a stabilization in interest rates.

Speaker Change: In 2023 rates were going up and up and up and the great part about our business is it.

Speaker Change: This is a real returns business. It works, whether interest rates are at 3% or 4% or 5%.

Connor Teskey: But everyone can appreciate that when markets are uncertain and rates seem like they're going up in perpetuity, that becomes a more tougher market for people to transact in. And as we kind of turn the page into a new calendar year here, what we have is stability in interest rates.

Speaker Change: But everyone can appreciate that when markets are uncertain and rates seem like theyre going up in perpetuity that.

Speaker Change: It became a more tougher market for people to transact in.

Speaker Change: And as we kind of turn the page into a new calendar year here. What we have is stability in interest rates, maybe they land at three and three quarters, maybe they land at four five but they are they're going to be within a pretty tight range here and that is a very constructive level.

Connor Teskey: Maybe they land at 3.75, maybe they land at 4.5, but they're, they're gonna be within a pretty tight range here, and that is a very constructive level for our industry. And as a result, we think this year will be very, very active from a transaction perspective, both on the investment side and on the capital recycling side. You know, some of the uncertainty, particularly in the latter half of 2023, probably caused a number of people to stand on the sidelines. Early indications in 2024 is with this reduced uncertainty in the market, people are open for business, and we're seeing that in our sales processes that have launched, and we're also seeing that in our engagement in terms of new growth opportunities.

Connor Teske: And that is a very constructive level for our industry. As a result, we think this year will be very, very active from a transaction perspective, both on the investment side and on the capital recycling side. You know, some of the uncertainty, particularly in the latter half of 2023, probably caused a number of people to stand on the sidelines.

Speaker Change: For our industry and as a result, we think this year will be very very active from a transaction perspective, both on the investment side and on the capital recycling side.

Connor Teskey: You know, some of the uncertainty, particularly in the latter half of 2023, probably caused a number of people to stand on the sidelines. Early indications in 2024 is with this reduced uncertainty in the market, people are open for business, and we're seeing that in our sales processes that have launched, and we're also seeing that in our engagement in terms of new growth opportunities.

Speaker Change: Some of the uncertainty, particularly in the latter half of 2023, probably caused a number of people to stand on the sidelines early indications in 2020 for us.

Connor Teske: Early indications in 2024 are that with this reduced uncertainty in the market, people are open to business, and we're seeing that in our sales processes that have just launched. And we're also seeing that in our engagement in terms of new growth opportunities. In terms of where specifically we're seeing those opportunities, I would say it's across the spectrum, and public companies still do remain a key focus of ours, even with somewhat of a relief rally in the latter part of the year. But I would say, where interest rates are settling, it's a pretty good level for both buying operating assets and developing assets. I think we would be pretty balanced this year and going forward.

Speaker Change: With this.

Speaker Change: Reduced uncertainty in the market people are open for business and we're seeing that in our sales processes that have launched and we're also seeing that in our engagement in terms of new growth opportunities.

Connor Teskey: In terms of where specifically we're seeing those opportunities, I would say it's across the spectrum, and public companies still do remain a key focus of ours, even with somewhat of the, the relief rally in the latter part of the year. But I would say at where interest rates are settling, it's a pretty good level for both buying both operating assets and development assets. I think we would be pretty balanced this year going forward.

Speaker Change: In terms of where specifically we are seeing those opportunities I would say its across the spectrum and public companies still do remain a key focus of ours, even with somewhat of the relief rally in the latter part of the year.

Speaker Change: But I would say.

Speaker Change: Our interest rates are settling.

Speaker Change: It's a pretty good level for both buying both operating assets and development assets I think we would be pretty balanced this year going forward.

Robert Hope: Excellent. Thank you.

Robert Hope [Managing Director: Excellent. Thank you.

Speaker Change: Excellent. Thank you.

Connor Teske: Excellent, thank you. Our next question comes from a line from Rupert Merer with National. Hi, good morning, everyone.

Operator: Our next question comes from the line of Rupert Mercer with National Bank.

Speaker Change: Our next question comes from the line of Rupert <unk> with National Bank.

Rupert Merer: Hi, good morning, everyone. One more follow-up on the data center. So the PPAs you're looking at, are they typically simple take or pay contracts, or is there some element of capacity required?

Hi, good morning, everyone.

Rupert Merer: One more follow-up on the data center. So the PPAs you're looking at, are they typically simple take or pay contracts, or is there some element of capacity required? Most of them are, you know, 17, 18, 20-year take-or-pay inflation-linked contracts. These are the good ones that we want. Some of the large technology companies are increasingly looking for 24-7 green power solutions, and we can use our wind and solar development and pair that with either hydro or battery storage, but I would say that's typically at a premium or with incremental upside to those, call it 17 to 18 to 20-year take or pay inflation-linked contracts. Thank you.

Rupert: So one more follow up on the data centers. So the PPA as Youre looking at are they typically simple take or pay contracts or is there some element of capacity required.

Connor Teskey: Yeah. Most of them are, you know, 17-, 18-, 20-year take or pay inflation-linked contracts. These, these are, these are the good ones that we want. Some of the large technology companies are increasingly looking for 24/7 green power solutions, and we can use our wind and solar development and pair that with either hydros or battery storage. But I would say though that's typically at a premium or with incremental upside to those, call it 17- to 18- to 20-year take or pay inflation-linked contracts.

Rupert: Most of them are <unk>.

Rupert: $17, $18 20 year take or pay inflation linked contracts.

Rupert: These are these are the good ones that we want.

Some of the large technology companies are increasingly looking for $24 seven Green power solutions, and we can use our wind and solar development in pair that with either hydro's are battery storage, but I would say that's typically at a premium or with incremental upside to those call. It 17 to 18 to 20.

Rupert: A year take or pay inflation linked contracts.

Rupert Merer: Right. Great. Thank you. And then, secondly, looking at your production in the quarter. So you came in around 85% of LTA. We are seeing similar trends across your peer group, of course. Just wondering if you can comment on those recent weather patterns and what you anticipate going forward. Maybe some thoughts about your LTA assumptions.

Speaker Change: Alright, great. Thank you and then secondly, looking at your production in the quarter. So you came in.

Connor Teske: And then secondly, looking at your production in the quarter, so you came in around 85% of LTA, we are seeing similar trends across your peer group, of course. Just wondering if you could comment on those recent weather patterns and what you anticipate going forward, maybe some thoughts about your LTA.

Speaker Change: Around 85% of LTA, we are seeing similar trends across your peer group of course, just wondering if you can comment on those recent weather patterns and what you anticipate going forward, maybe some some thoughts about your your LTA assumptions.

Connor Teskey: Perfect. And thanks for the question, and maybe let us share and shine a little bit of light here because there's really two different dynamics happening within our LTA. One of the key differentiating factors of Brookfield Renewable and one of the things that is really the bedrock of our business is we have that very large critical base of baseload hydro. And while that is very, very valuable relative to wind and solar, hydrology is a slightly more variable asset class in terms of resource. But there's two things I would focus on when it comes to our hydro LTA. One, we monitor it exceptionally closely, and we are constantly needing to update it for any financings or transactions that we do.

Speaker Change: Perfect.

Connor Teske: And thanks for the question. And maybe let us share and shine a little bit of light here because there's really two different dynamics happening within our LTA. One of the key differentiating factors of Brookfield Renewable and one of the things that is really the bedrock of our business is that we have that very large critical base of baseload hydro. And while that is very, very valuable, relative to wind and solar, hydrology is a slightly more volatile asset class in terms of resources. But there are two things I would focus on when it comes to our hydro LTA. One, we monitor it exceptionally closely, and we are constantly needing to update it for any financings or transactions that we do. And therefore, over any period of time, yes, there can be some variability, a little below LTA, a little above LTA, but those long-term averages are bang on. But even when the resource can be a little above or a little below LTA, the other thing that needs to be overlaid on that dynamic is, where is that resource above or below LTA?

And thanks for the question and maybe let us.

Speaker Change: Sure and shine a little bit of light here, because there is really two different dynamics happening.

Speaker Change: Within our LTA.

Speaker Change: One of the key differentiating factors that of Brookfield renewable.

Speaker Change: One of the things that is really the bedrock of our business is we have that very large critical base of.

Speaker Change: Baseload hydro.

And while that is very very valuable.

Relative to wind and solar hydrology is a slightly more variable.

Asset class in terms of resource, but there is two things I would focus on when it comes to our hydro LTA.

Connor Teskey: But there's two things I would focus on when it comes to our hydro LTA. One, we monitor it exceptionally closely, and we are constantly needing to update it for any financings or transactions that we do.

Speaker Change: One we monitor it exceptionally closely and we are constantly needing to update it for any financings are transactions that we do and therefore over any period of time, yes, there can be some variability a little below LTA a little above LTA.

Connor Teskey: And therefore, over any period of time, yes, there can be some variability, a little below LTA, a little above LTA, but those long-term averages are bang on. But even when the resource can be a little above or a little below LTA, the other thing that needs to be overlaid on that dynamic is: where is that resource above or below LTA? If our hydro resource is below LTA in a very high-value market versus being above LTA in a lower-value market, that can have a differing impact on our financial results. So while that hydrology is a little bit more variable, it is very consistent over the long term. And the one point we would reference here is, as our business continues to grow and diversify, the importance of that hydro LTA is being increasingly diluted over time.

Speaker Change: But those long term averages are bang on.

Speaker Change: But even when the resource.

Speaker Change: Can be a little above or a little below LTA. The other thing that needs to be over layered on that dynamic is where is that resource above or below LTA. If if our hydro resources below LTA and a very high value market versus being above LTA in.

Connor Teskey: If our hydro resource is below LTA in a very high-value market versus being above LTA in a lower-value market, that can have a differing impact on our financial results. So while that hydrology is a little bit more variable, it is very consistent over the long term. And the one point we would reference here is, as our business continues to grow and diversify, the importance of that hydro LTA is being increasingly diluted over time.

Connor Teske: If our hydro resource is below LTA in a very high-value market versus being above LTA in a, I'll say, lower-value market, that can have a differing impact on our financial results. So while that hydrology is a little bit more variable, it is very consistent over the long term. And the one point we would reference here is that as our business continues to grow and diversify, the importance of that hydro LTA is being increasingly diluted over time. The second component of our LTA is a little bit more structural, and it's showing up a little bit more in our current results today for obvious reasons, which is, as we buy new businesses, one of the things we often focus on is finding investment opportunities where there are clear operational enhancements that we So often when we buy new businesses, they do start at slightly below LTA as we take over those businesses from their previous owners, and then as we execute our business plans and implement those operational improvements, those businesses trend up to that LTA number.

Speaker Change: I'll say lower value market that can have a different impact on.

Speaker Change: Our financial results, so well that hydrology is a little bit more variable. It is very consistent over the long term and the one point, we would reference here is as our business continues to grow and diversify the importance of that hydro LTA is being increasingly diluted over time.

Connor Teskey: The second component of our LTA is a little bit more structural, and it's showing up a little bit more in our current results today for obvious reasons, which is, as we buy new businesses, one of the things we often focus on is finding investment opportunities where there are clear operational enhancements that we can execute in the short to medium term under our ownership. So often when we buy new businesses, they do start at slightly below LTA as we take over those businesses from their previous ownership, and then as we execute our business plans and implement those operational improvements, those businesses trend up to that LTA number.

Speaker Change: The second component of our LTA is a little bit more structural.

Speaker Change: And it's showing up a little bit more in in our current results today for obvious reasons, which is as we buy new businesses.

Speaker Change: One of the things, we often focus on is finding investment opportunities, where there are clear operational enhancements that we can execute in the short to medium term under our ownership.

Connor Teskey: So often when we buy new businesses, they do start at slightly below LTA as we take over those businesses from their previous ownership, and then as we execute our business plans and implement those operational improvements, those businesses trend up to that LTA number.

Speaker Change: So often when we buy new businesses they do.

Speaker Change: <unk> started at slightly below LTA.

Speaker Change: As we take over those businesses from their previous ownership and then as we execute our business plans and implement those operational improvements those businesses trend up to that LTA number.

Connor Teskey: As we've gone through a period of very, very rapid growth here over the last, call it, 12 to 36 months, we have more of that in our numbers today than we would have had, let's say, 3 or 5 years ago. But the great news is that's all identified, that's all within our control, and we will see those numbers trend up to LTA as we execute on some of the repowerings, refurbishments, equipment replacements that we identified in our underwriting. And that's all moving very, very much on track and should increasingly play out in our financial performance going forward.

Connor Teske: As we've gone through a period of very, very rapid growth here over the last, call it, 12 to 36 months, we have more of that in our numbers today than we would have had, let's say, three or five years ago, but the great news is that it's all identified, that it's all within our control, and we will see those numbers trend up to LTA as we execute on some of the repowerings, refurbish So looking at that second component and the overall shortfall in LTA, how much of it was a result of curtailments? We do see quite significant curtailment of wind power in some markets, and of course, that's something that can be controlled to some degree with the addition of batteries or maybe new transmission lines. Is this, is this a significant component of the shortfall for you? I would say no.

Speaker Change: As we've gone through a period of very very rapid growth here over the last call. It 12 months to 36 months, we have more of that in our numbers today than we would have had let's say three or five years ago, but the great News is that's all identified that's all within our control and we will see those numbers trend up.

Speaker Change: The LTA as we execute on some of the Repowering refurbishments equipment replacement that we identified in our underwriting and Thats all moving very very much on track and should increasingly play out in our financial performance going forward.

Rupert Merer: So looking at that second component and the overall shortfall to LTA, how much of it was a result of curtailments? We do see quite significant curtailment of wind power in some markets, and of course, that's something that can be controlled to some degree with the addition of batteries or maybe new transmission lines. Is this a significant component of the shortfall for you?

Speaker Change: So looking at the second component.

Speaker Change: The overall shortfall to LTA, how much of it was a result of curtailments, we do see.

Speaker Change: Quite a significant curtailment of wind power in some markets and of course, that's something that can be controlled to some degree with the addition of batteries.

Speaker Change: New transmission lines is this just a significant component of the shortfall for you.

Connor Teskey: I would say no. I don't have a specific figure to provide here. But without doubt, the most significant components of the discount to LTA are one, just resource variability. And then secondly, those specific identified operational improvements that we are pushing through our assets. Curtailment, of course, does exist in this business, but I wouldn't say it's a material driver of our LTA results. Well, I hope that answers your question.

Speaker Change: I would say no I don't have a specific.

Connor Teske: I don't have a specific figure to provide here, but without doubt, the most significant components of the discount to LTA are one, just resource variability, and then secondly, those specific identified operational improvements that we are pushing through our assets. Curtailment, of course, does exist in this business, but I wouldn't say it's a material driver of our LTA results. Well, I hope that answers your question.

Speaker Change: Figure to provide here.

Speaker Change: Without doubt the.

Speaker Change: Most significant components of the discount to LTA or one just resource variability.

Speaker Change: And then secondly, those specific identified operational improvements that we are pushing through our assets curtailment of course does exist in that business, but I wouldn't say, it's a material.

Speaker Change: The driver of our LTA results.

Well I hope that answers. Your question, yes, there is perhaps one thing I would add which is you commented on batteries and increasingly the implementation of storage that is a very strong dynamic we are seeing in our business.

Rupert Merer: Yeah.

Connor Teskey: There's perhaps one thing I would add, which is, you commented on batteries and increasingly, the implementation of storage. That is a very strong dynamic we are seeing in our business. In particular, the addition of batteries on an increasing proportion of the new development activity we do. We're seeing that as a very low risk and attractive, return, risk-adjusted return way to enhance a number of the assets that we've either recently acquired or are developing.

Rupert Merer: There's perhaps one thing I would add, which is that you commented on batteries and, increasingly, the implementation of storage. That is a very strong dynamic we are seeing in our business. In particular, the addition of batteries on an increasing proportion of the new development activity we do, we're seeing that as a very low-risk and attractive risk-adjusted return way to enhance a number of the assets that we've either recently acquired or are developing. Thank you for the color.

Speaker Change: In particular, the addition of batteries on an increasing proportion of the new development activity we do.

Speaker Change: We're seeing that as a very low risk and attractive return risk adjusted return way to enhance a number of the assets that we've either recently acquired or are developing.

Rupert Merer: Great. Thank you for the color. I'll leave it there.

Speaker Change: Great. Thank you for the color I'll leave it there.

Speaker Change: Okay.

Operator: Our next question comes from the line of Mark Jarvey with CIBC.

Mark Jarvie: Our next question comes from a line from Mark Jarvie with CID. Thanks. Good morning, everyone.

Speaker Change: Our next question comes from the line of Mark Jarvi with CIBC.

Mark Jarvi: Thanks. Good morning, everyone. Maybe just, Connor, building off your comment around interest rate stability, sort of opening up the, the M&A markets a little bit more. How would you frame the interest competitive dynamics around larger, assets or portfolios? Is it the same as it was six months ago, or do you think the number of, I guess, potential interested parties has increased in the last couple of months?

Mark Jarvi: Thanks, Good morning Juan.

Connor Teske: Maybe just, Connor, building off your comment around interest rate stability, sort of opening up the M&A markets a little bit more, how would you frame the interest competitive dynamics around larger assets or portfolios? Is it the same as it was six months ago? Do you think the number of, I guess, potential interested parties has increased in the last couple of months? Uh, I would say that the stabilization in interest rates has absolutely increased the number of interested parties. There's no question about that. But I would say we have really seen a fairly dramatic shift. Here we are at the beginning of February, the end of January.

Mark Jarvi: Maybe just building off your comment around interest rate stability sort of opening up the M&A markets a little bit more.

Mark Jarvi: Could you frame.

Mark Jarvi: Interest and put a dynamics around larger.

Mark Jarvi: Assets and portfolios is it the same as it was six months ago do you think the number of I guess potential interested parties has increased in the last couple of months.

Connor Teskey: I would say the stabilization in interest rates absolutely has increased the number of interested parties. There's no question about that. I would say we have really seen a fairly dramatic shift. Here we are, the beginning of February, end of January. If you compare the market today versus where we were at, say, the end of September, 4 months ago, it is night and day in terms of the level of activity, the amount of interested parties, again, on both the buy side or the sell side.

Mark Jarvi: I would say the stabilization.

Mark Jarvi: Nation and interest rates, absolutely has increased the number of interested parties. There is no question about that.

I would say, we have really seen a fairly dramatic shift.

Mark Jarvi: Here, we are the beginning of February end of January if you compare the market today versus where we were at say the end of September four months ago. It is night and day in terms of the level of activity the amount of interested parties again on both the buy side or the sell side.

Connor Teske: If you compare the market today versus where we were at, say, the end of September four months ago, it is night and day in terms of the level of activity, the number of interested parties, again, on both the buy side and the sell side. Maybe the only added point of color that we would make there, and it ties back to our answer to one of the previous questions, is that really, what we saw in 2023 was a number of businesses experiencing headwinds that we thought could largely be attributed to one of two things. If you took significant basis risk in your development activities, you know, the higher capex levels, increasing capex levels, and higher funding costs really caught you short, and that really disrupted or negatively impacted a number of developers around the world, particularly those in the offshore space. That was one dynamic that was a key headwind to 2023. The other dynamic was simply that higher interest rates materially impacted those businesses that were reliant on unfettered access to the capital markets and very, very cheap financing. And businesses that had relied on that sort of funding structure suffered in last year's economic environment.

Connor Teskey: Maybe the only added point of color that we would make there, and it ties back to our answer to one of the previous questions, is really what we saw in 2023 was a number of businesses saw headwinds that we thought could largely be attributed to one of two things. If you took significant basis risk in your development activities, you know, the higher CapEx levels, increasing CapEx levels and higher funding costs really caught you short. And that really disrupted or negatively impacted a number of developers around the world, particularly those in the offshore space. That was one dynamic that was a key headwind to 2023.

Mark Jarvi: Maybe the only added point of color that debt.

We would make there and it ties back to our answer to one of the previous questions is.

Mark Jarvi: <unk>.

Mark Jarvi: Really what we saw in 2023 was a number of businesses.

Mark Jarvi: So our headwinds that we thought could largely be attributed to one of two things. If you took significant basis risk in your development activities.

Connor Teskey: If you took significant basis risk in your development activities, you know, the higher CapEx levels, increasing CapEx levels and higher funding costs really caught you short. And that really disrupted or negatively impacted a number of developers around the world, particularly those in the offshore space. That was one dynamic that was a key headwind to 2023.

Mark Jarvi: The higher capex levels, increasing capex levels and higher funding costs really caught you short and that really disrupted or negatively impacted a number of developers around the world, particularly those in the offshore space that was one dynamic that was a key.

Headwind to 2023, the other dynamic was simply.

Connor Teskey: The other dynamic was simply the higher interest rates more materially impacted those businesses that were reliant on, you know, unfettered access to the capital markets and very, very cheap financing. And businesses that had relied on that sort of funding structure, you know, suffered in last year's economic environment. Those two dynamics have seen a little bit of relief in the last, again, call it 2 to 3 months, but we should be very clear that those dynamics haven't gone completely away. We have not returned yet, and I don't think we will return to the almost zero interest rates and unlimited access to capital that was there 3 or 4 years ago.

Mark Jarvi: <unk>.

Mark Jarvi: Higher interest rates.

Mark Jarvi: More materially impacted those businesses.

Mark Jarvi: That were reliant on.

Mark Jarvi: Unfettered access to the capital markets and very very cheap financing and businesses that had relied on that sort of funding structure.

Mark Jarvi: Suffered in last year's economic environment.

Connor Teskey: Those two dynamics have seen a little bit of relief in the last, again, call it 2 to 3 months, but we should be very clear that those dynamics haven't gone completely away. We have not returned yet, and I don't think we will return to the almost zero interest rates and unlimited access to capital that was there 3 or 4 years ago.

Mark Jarvi: Those two dynamics have seen a little bit of relief in the last.

Connor Teske: Those two dynamics have seen a little bit of relief in the last, again, call it two to three months. But we should be very clear that those dynamics haven't completely gone away. We have not returned yet.

Mark Jarvi: Call it two to three months.

Mark Jarvi: But we should be very clear that those dynamics haven't gone completely away.

Mark Jarvi: We have not returned yet and I don't think we will return to the almost zero interest rates, an unlimited access to capital that was there three or four years ago. So some of those business models still don't work and we will need either capital or operating partners to get back on a stable footing. So.

Connor Teske: And I don't think we will return to the almost zero interest rates and unlimited access to capital that were there three or four years ago. So some of those business models still don't work and will need either capital or operating partners to get back on a stable footing. So while there is more activity in the markets, I would say it's also still a relatively robust investment opportunity set. A couple of follow-ups on that.

Connor Teskey: So some of those business models still don't work, and will need either capital or operating partners to get back on a stable footing. So while there is more activity in the markets, I would say it's also still a relatively robust investment opportunity set.

Mark Jarvi: While there is more activity in the markets I would say, it's also still a relatively.

Mark Jarvi: Robust investment opportunity set.

Mark Jarvi: Okay, a couple of thoughts on that. Maybe, does that mean, like, an opportunity to do this Duke transaction is not as readily available at that valuation today? And I guess on the flip side, how does the market conditions inform, I guess, the pace and the type of assets you're considering for capital recycling in 2024?

Speaker Change: Okay. A couple of thoughts on maybe does that mean like an opportunity to do this do transactions is not as readily available at that valuation today and I guess on the floor.

Mark Jarvie: Does that mean an opportunity to do the Duke transactions is not as readily available at that valuation today? And, on the flip side, how does market conditions inform the pace and the types of assets you're considering for capital recycling in 2024? Yeah, both great questions. I would say the comments I made stand by everything and are very, very vastly applicable.

Speaker Change: Lip side, how does the market conditions inform I guess the pace and the type of assets you are considering for capital recycling into 'twenty 'twenty four.

Connor Teskey: Yeah, both great questions. I would say, the comments I made stand by everything, and I would say are very, very vastly applicable. Transactions like what we did on the Duke transaction or the Banks transactions, those were essentially bilateral deals of very significant scale, where we offered something that essentially the other participants in the market could not. And while there are more people active in the market today, there is still a very, very large opportunity set for us to do bilateral deals, where either the transaction structure we can own, the operating capabilities we can bring, or the scale we can provide is relatively unmatched. So, you know, for many transactions, is there more competition today?

Speaker Change: Yes, both great questions I would say.

Speaker Change: The comments I made standby everything.

Speaker Change: And I would say are very very vastly applicable transactions like.

Connor Teske: Transactions like what we did with the Duke transaction or the banks transactions; those were essentially bilateral deals of very significant scale where we offered something that, essentially, the other participants in the market could not. And while there are more people active in the market today, there is still a very, very large opportunity set for us to do bilateral deals where either the transaction structure we can own, the operating capabilities we can bring, or the scale we can provide is relatively unmatched. So, you know, for many transactions, is there more competition today? Yes, But are we seeing an inability to do bilateral transactions as we have done in the past? No, no, we are not.

Speaker Change: What we did on the Duke transaction or the banks transactions. Those were essentially bilateral deals are very significant scale, where we offered something that essentially the other participants in the market could not and well there are more people.

Connor Teskey: And while there are more people active in the market today, there is still a very, very large opportunity set for us to do bilateral deals, where either the transaction structure we can own, the operating capabilities we can bring, or the scale we can provide is relatively unmatched. So, you know, for many transactions, is there more competition today?

Speaker Change: Active in the market today, there is still a very very large opportunity set for us to do bilateral deals where either the transaction structure, we can own the operating capabilities, we can bring or the scale. We can provide is relatively unmatched. So.

Speaker Change: <unk>.

Speaker Change: For many transactions is there more competition today.

Connor Teskey: Yes, but are we seeing an inability to do bilateral transactions as we have done in the past? No, we are not.

Speaker Change: Yes, but are we seeing an inability to do bilateral transactions as we have done in the past no no we are not.

Mark Jarvi: And then just maybe on asset sales, in terms of how the pace of, you know, potential asset sales this year versus last year, do you think that accelerates?

Speaker Change: And then just maybe on asset sales in terms of the pace of potential asset sales. This year versus last year do you think that accelerates.

Connor Teske: And then maybe on asset sales, in terms of the pace of, you know, potential asset sales this year versus last year, do you think that accelerates? 100%. Sorry, I forgot to answer the second part of your question.

Connor Teskey: 100%. Sorry, I forgot to answer the second part of your question. Absolutely. And this is where we have seen some really strong demand to start 2024, there does seem to be still a lot of capital flowing into this sector, and that capital maybe took a pause for a couple of quarters in that more uncertain interest rate environment. It has not taken long for that capital to come back. So, we would expect to be relatively active on the capital recycling side in 2024. And in terms of where we see that activity, same strategy that we've always executed.

Speaker Change: 100%, sorry, I forgot to answer the second part of your question absolutely.

Connor Teske: Absolutely. And this is where we have seen some really strong demand to start 2024 is that there does seem to be still a lot of capital flowing into this sector and that that capital maybe took a pause for a couple quarters in that more uncertain interest rate environment. It has not taken long for that capital to come back, so we would expect to be relatively active on the capital recycling side in 2024. And in terms of where we see that activity, we will be unemotional in terms of geography, asset class, or technology, and we will look for opportunities where we can sell assets at greater values than we see in holding them in our own portfolio. In terms of where some of those dollars might be, I would say just given the relative dispersion of our portfolio, which today is largely in North America and Western Europe.

Speaker Change: And this is where we have seen.

Speaker Change: Some really strong demand to start 2024 is there does seem to be still a lot of capital flowing into this sector and that that capital maybe took a pause for a couple of quarters.

Speaker Change: In that more uncertain interest rate environment.

Speaker Change: It has not taken long for that back capital to come back. So we would expect to be relatively active on the capital recycling.

Speaker Change: Syed.

Speaker Change: In 2024 and in terms of where we see that activity.

Speaker Change: Sure.

Speaker Change: Same same strategy that we've always executed we will be unemotional in terms of geography asset class or or technology, and we will look for opportunities, where we can sell assets at at greater value than we see in holding them in our own portfolio in terms of.

Connor Teskey: We will be unemotional in terms of geography, asset class, or technology, and we will look for opportunities where we can sell assets at greater values than we see in holding them in our own portfolio. In terms of where some of those dollars might be, I would say just given the relative dispersion of our portfolio, that today is largely in North America and Western Europe, surely because of that concentration, that's probably where we'd see the greatest amount of asset recycling.

Speaker Change: Where some of those dollars might be I would say just given the relative.

Speaker Change: Dispersion of our portfolio that today is largely in North America, and Western Europe surely because of that concentration, that's probably where we'd see the greatest amount of asset recycling.

Connor Teske: Surely because of that concentration, that's probably where we'd see the greatest amount of asset recycling. Okay, maybe I'll just sneak one more in. In recent sort of updates, you guys have had a positive turnaround, maybe stepping into larger offshore wind investments. Is that still something that you're really active on?

Mark Jarvi: Okay. Maybe I'll just sneak one more in. Just, in recent sort of updates, you guys have had a positive tone around maybe stepping into larger offshore wind investments. Is that still something that you're really active on? Has any, any kind of change in terms of the, the likelihood of making a, you know, a larger play in offshore wind sometime in 2024?

Speaker Change: Okay.

Speaker Change: Sneak one more in just.

Speaker Change: Recent sort of update just set a positive tone around noon stepping into larger offshore wind investments is that still something that youre really active on if any and.

Connor Teske: Has any kind of changed in terms of the likelihood of making a larger play in offshore wind sometime in 2024? Sure, so our approach to offshore wind, and we'll quickly restate it here: we love the technology.

Kind of changed in terms of the likelihood of making a larger play in offshore wind sometime in 'twenty report.

Connor Teskey: Sure. So our approach to offshore wind, and we'll quickly restate it here: We love the technology. It's large, it's fast-growing, it's mature, and quite frankly, because of the differentiated load pattern it can provide to onshore wind and onshore solar, it is actually critical to many power markets around the world. What we have struggled with in the past is the investment profile or the basis risk you had to take as an investor or as a developer, where sometimes you had to invest $hundreds of millions or billions upfront for the right to build out a project in four or five or six years. And in that time period, in that lag, market conditions could shift and go against you.

Speaker Change: Sure.

Speaker Change: Our approach to offshore wind and well quickly restate it here, we loved the technology.

Connor Teske: It's large, it's fast growing, it's mature, and quite frankly, because of the differentiated load pattern it can provide to onshore wind and onshore solar, it is actually critical to many power markets around the world. What we have struggled with in the past is the investment profile or the basis risk you had to take as an investor or as a developer, where sometimes you had to invest hundreds of millions or billions of dollars up front for the right to build out a project in four or five or six years. In that time period, in that leg, market conditions could shift and go against you. Obviously, today there are a number of market participants who have seen headwinds that maybe need to get out of some of their offshore wind projects, and maybe some of those offshore wind projects are a lot closer to construction or a lot closer to coming online, and therefore, there is less of that base risk that we had an aversion to. So I would say we are much more active in reviewing opportunities in the offshore space today than we would have been a couple years ago. But like anything, we will compare those opportunities to the risk-adjusted returns we see elsewhere and allocate to the best ones. understood. Thanks for your time today.

Speaker Change: It's large it's fast growing it's mature and quite frankly because of the differentiated load pattern. It can provide to onshore wind and onshore solar it is actually critical.

Speaker Change: Too many power markets around the world what we have struggled with in the past is the investment profile or the basis risks you had to take as an investor as a developer where sometimes you had to invest hundreds of millions or billions of dollars upfront to the for the right to build out of <unk>.

Connor Teskey: What we have struggled with in the past is the investment profile or the basis risk you had to take as an investor or as a developer, where sometimes you had to invest $hundreds of millions or billions upfront for the right to build out a project in four or five or six years. And in that time period, in that lag, market conditions could shift and go against you.

Speaker Change: <unk> in four or five or six years and in that time period and that lag market conditions could shifting go against you.

Connor Teskey: Obviously, today, there are a number of market participants who have seen headwinds that maybe need to get out of some of their offshore wind projects. And maybe some of those offshore wind projects are a lot closer to construction or a lot closer to coming online, and therefore, there is less of that basis risk that we had an aversion to. So I would say we are much more active in reviewing opportunities in the offshore space today than we would have been a couple of years ago. But like anything, we'll compare those opportunities to the risk-adjusted returns we see elsewhere and allocate to the best ones.

Obviously today there are a number.

Speaker Change: Market participants, who have seen headwinds that may be needed to get out of some of their offshore wind projects and maybe some of those offshore wind projects are a lot closer to construction or a lot closer to coming online and therefore, there is less of that basis risk that we add in the version two.

Connor Teskey: So I would say we are much more active in reviewing opportunities in the offshore space today than we would have been a couple of years ago. But like anything, we'll compare those opportunities to the risk-adjusted returns we see elsewhere and allocate to the best ones.

Speaker Change: I would say we are much more active in reviewing opportunities in the offshore space today than we would be would.

Speaker Change: Would have been a couple of years ago, but like anything we'll compare those opportunities to the risk adjusted returns, we see elsewhere and allocate to the best ones.

Mark Jarvi: Understood. Thanks for the time today.

Speaker Change: Understood. Thanks for the time.

Operator: Our next question will come from the line of Nelson Ng with RBC Capital Markets.

Nelson Ng: Our next question will come from the line of Nelson Ng with RBC Capital. Great, thanks. Good morning, everyone.

Speaker Change: Our next question will come from the line of Nelson <unk> with RBC capital markets. Great. Thanks. Good morning, everyone. I had a few questions on your development pipeline. So obviously, you've highlighted a lot of opportunities in the U S.

Nelson Ng: Great. Thanks. Good morning, everyone. I had a few questions on your development pipeline. So obviously, you've highlighted a lot of opportunities in the US. But I was just looking at your development pipeline, and South America is pretty thin. I don't think there are any wind or utility-scale projects in the advanced stage there. So I was just wondering, is there a lack of opportunities there, or are you just mainly focused on developing in North America and Europe at the moment?

Connor Teske: I had a few questions on your development pipeline. So, obviously, you've highlighted a lot of opportunities in the US. I was just looking at your development pipeline, and South America is pretty thin. I don't think there are any... wind or utility-scale projects in the advanced stage there. So I was just wondering, is there a lack of opportunities there, or are you just mainly focused on developing in North America and Europe.

Nelson: But I was just looking at your development pipeline and South America.

Speaker Change: Pretty soon I don't think there are any.

Nelson: Wind or utility scale projects in the advanced stage. There. So I was just wondering is there a lack of opportunities there or are you just mainly focused on.

Nelson: Developing in North America, and Europe at the moment.

Nelson: Okay.

Connor Teskey: Very good question, and relatively easy to answer. Obviously, the vast majority of our development activity, traditionally in South America, has been in Brazil. And for the last few years, we have, I would say, been very, very successful in developing some large and attractive projects in that market. For those that don't know, power prices in Brazil, due to their very strong concentration of hydroelectric generation across the grid, are very dependent on hydrology levels. And if you went back, I would say 2 to 4 or 2 to 5 years ago, hydrology levels across the Brazilian system were relatively low, and that supported higher power prices that made wind and solar development very, very, very attractive.

Nelson: Hi.

Connor Teske: Very good question and relatively easy to answer. Obviously, the vast majority of our development activity, traditionally in South America, has been in Brazil. And for the last few years, we have, I would say, been very, very successful in developing some large and attractive projects in that market. For those that don't know, Power prices in Brazil, due to their very strong concentration of hydroelectric generation across the grid, are very dependent on hydrology levels. And if you went back, I would say, two to four, two to five years ago, hydrology levels across the Brazilian system were relatively low, and that supported higher power prices that made wind and solar development very, very, very attractive. And that's the market where we developed many of those large projects that have come online in 22 or 2023 or are scheduled to come online in 2024. But what has since happened, I would say, in the last 18 months is hydrology has dramatically improved in Brazil. And because that is across the system, it pushes power prices down. And today, they are at very, very low historical levels.

Speaker Change: Very good question and relatively easy to answer obviously, the vast majority of our development activity traditionally in South America has been in Brazil and for the last few years, we have.

Speaker Change: I would say have been very very successful in.

Speaker Change: In developing some some large and attractive.

Speaker Change: Projects in that market.

Connor Teskey: For those that don't know, power prices in Brazil, due to their very strong concentration of hydroelectric generation across the grid, are very dependent on hydrology levels. And if you went back, I would say 2 to 4 or 2 to 5 years ago, hydrology levels across the Brazilian system were relatively low, and that supported higher power prices that made wind and solar development very, very, very attractive.

Speaker Change: For those that don't know.

Speaker Change: Power prices in Brazil, due to their very strong concentration.

Speaker Change: Of of hydroelectric generation across the grid are very dependent on hydrology levels and if you went back.

Speaker Change: I would say two to four two to five years ago hydrology levels across the Brazilian system were relatively low and that supported higher power prices.

Speaker Change: That made wind and solar development very very very attractive and that's the market, where we developed many of those large projects into that have come online in 'twenty, two where 2023 or are scheduled to come online in 2024.

Connor Teskey: And that's the market where we developed many of those large projects into that have come online in 2022 or 2023 or are scheduled to come online in 2024. But what has since happened, I would say, in the last 18 months, is hydrology has dramatically improved in Brazil, and because that is across the system, it pushes power prices down, and today they are at very, very low historical levels. Obviously, our business in Brazil is almost 100% contracted, so we are not exposed to those lower power prices, but it does make it more difficult to find new wind and solar projects that can secure contracts in this price environment and still be developed at attractive levels. So this is a short-term dynamic.

Speaker Change: But what has since happened I would say in the last 18 months is hydrology has dramatically improved in Brazil, and because of that is across the system. It pushes power prices down and today. They are at very very low historical levels, obviously, our business in Brazil is almost 100.

Connor Teskey: Obviously, our business in Brazil is almost 100% contracted, so we are not exposed to those lower power prices, but it does make it more difficult to find new wind and solar projects that can secure contracts in this price environment and still be developed at attractive levels. So this is a short-term dynamic.

Connor Teske: Obviously, our business in Brazil is almost 100% contracted, so we are not exposed to those lower power prices. But it does make it more difficult to find new wind and solar projects that can secure contracts in this price environment and still be developed at attractive levels. So this is a short-term dynamic. Wind and solar growth in Brazil will recover, and it will be very robust, but this has been driven by a relatively large shift in hydrology levels that has changed market prices. And we are simply in a period of time when development activity in that market is going to be reduced because it's simply tough to secure contracts at attractive enough levels to justify the cap act. That's a really nice color.

Speaker Change: Percent contracted so we are not exposed to those lower power prices, but it does make it more difficult to find new wind and solar projects that.

Speaker Change: That can secure contracts in this price environment and still be developed at attractive levels. So this is a short term dynamic.

Connor Teskey: Wind and solar growth in Brazil will recover, and it will be very robust. But this has been driven by a relatively large shift in hydrology levels that has changed the market prices, and we are simply in a period of time where development activity in that market is gonna be reduced because it's simply tough to secure contracts at attractive enough levels to justify the CapEx.

Speaker Change: Wind and solar growth in Brazil will recover and it will be very robust, but this has been driven by a relatively large shift in hydrology levels that has changed the market prices and we are simply in a period of time, where.

Speaker Change: Development activity in that market is going to be reduced because it's simply tough to secure contracts at attractive enough levels to justify the capex.

Nelson Ng: That's a really good color, Connor. I'm glad they're getting more water, but too bad, yeah, it slows down development. So the next question is, obviously, you've commissioned about 4.5 gigawatts in 2023, and that's growing to, I think, 6.6 and 7.6 gigawatts over the next two years. I know you have a target of roughly deploying, call it, $1.5 billion per year on average. So, of that $1.5 billion, roughly what portion of that is now is going to development?

Speaker Change: That's really good color Conor Im glad theyre getting more water.

Speaker Change: Yes, it slowed down development.

Nelson Ng: I'm glad they're getting more water, but too bad, yeah, it slows down. So the next question is, obviously, you've commissioned about four and a half gigawatts. 23, and that's growing too.

Speaker Change: So the next question is.

Speaker Change: Obviously, you have commissioned about four five gigawatts in 'twenty, three and that's growing to $6 six and seven six gigawatts over the next two years.

Speaker Change: I know you have your target of roughly deploying call. It one 5 billion per.

Connor Teske: 7.6 kilowatts over the next two years. I know you have a target of roughly deploying, call it one and a half years, on average.

Speaker Change: Per year on average so.

Speaker Change: Of that one 5 billion.

Speaker Change: Roughly what portion of that is now.

Connor Teske: So, of that one and a half billion, roughly what portion of that is now? Yeah, sure. So I would say going into the next couple of years, 2024-2025, approximately a third, give or take, is already kind of identified in organic growth opportunities. That number could prove to be a little bit light, but I would say it's about a third.

Speaker Change: Thats going to development.

Connor Teskey: Yeah, sure. So I would say, going into the next couple of years, 2024, 2025, approximately 1/3, give or take, is already kind of identified in organic growth opportunities. That number could prove to be a little bit light, but I would say it's about 1/3.

Speaker Change: Yeah sure. So I would say going into the next couple of years 'twenty four 'twenty five.

Speaker Change: Approximately a third give or take.

<unk> is already kind of identified in organic growth opportunities that number.

Speaker Change: Could could prove to be a little bit light, but I would say it's.

Speaker Change: About a third.

Nelson Ng: Okay. And then just one last question: I noticed that you are also involved in solar panel manufacturing to some degree. It looks like there's about 1.5GW and 2.5GW next year. Like, are you self-supplying some of your developments, or is this more of a hedge on cost? Or how do you look at the at your involvement in solar panel manufacturing?

Okay.

Speaker Change: Just one last question.

Connor Teske: And then just one last question. I noticed that you are also involved in solar panel manufacturing to some degree. Lake, there are about one and a half gigawatts.

Speaker Change: I noticed that you are also involved in solar panel manufacturing to some degree it looks like there's about one five gigawatts and two five Gigawatts next year like are you self supplying some of your developments or is this more of a hedge on costs.

Connor Teske: Are you self-supplying some of your developments, or is this more of a hedge on costs, or how do you look at it? Sure, so probably the easiest way to answer that question is to talk about the exposure we have today, as well as our approach going forward. Our exposure today to solar panel manufacturing is part of a large structured investment we made in a company called Avada Energy in India. Avada Energy is one of the largest independent renewable power owner, operators, and developers, and that is the vast majority of the bulk of their business.

Speaker Change: Costs or how do you how do you look at the year.

Speaker Change: Your involvement in solar panel manufacturing.

Connor Teskey: Sure. So probably the easiest way to answer that question is, let's talk about the exposure we have today, as well as our approach going forward. Our exposure today to solar panel manufacturing is part of a large structured investment we made in a company called Avaada Energy in India. Avaada Energy is one of the largest independent renewable power owner, operators, and developers, and that is the vast majority of the bulk of their business. But in addition to being that large-scale owner and developer of renewable power, they also have two other business lines. One, they are doing some solar panel manufacturing themselves. And two, they are also in the early stages of some green hydrogen production, all of this in India.

Speaker Change: Sure so probably the easiest way to answer that question is let's talk about the exposure we have today as well as our approach going forward our exposure today to solar panel manufacturing is part of a structured a large structured investment we made in a company called <unk>.

Speaker Change: <unk> energy in India, a lot of energy is one of the largest independent renewable power.

Connor Teskey: Avaada Energy is one of the largest independent renewable power owner, operators, and developers, and that is the vast majority of the bulk of their business. But in addition to being that large-scale owner and developer of renewable power, they also have two other business lines. One, they are doing some solar panel manufacturing themselves. And two, they are also in the early stages of some green hydrogen production, all of this in India.

Speaker Change: Owner operators and developers and that is the vast majority of the bulk of their business, but in addition to being that large scale owner and developer of renewable power. They also have had to other business lines, one theyre doing some solar panel manufacturing.

Connor Teske: But in addition to being that large-scale owner and developer of renewable power, they also have two other business lines. One, they are doing some solar panel manufacturing themselves, and two, they are also in the early stages of some green hydrogen production, all of this in India. So our exposure to this space is through Avada, where we have made a downside protected structured investment to fund their growth across all three of those verticals. But the vast majority of that business today is, I would say, relatively down the fairway, a leading renewable power developer in India. In terms of, and while we do have a good relationship with Avada and we'd happily use some of those solar panels when they are up and running and producing, our investment exposure is, I would say, very, very modest relative to our global procurement needs and, E.E. Well, that's our exposure today.

Speaker Change: Themselves and two they are also in the early stages of some green hydrogen production.

Speaker Change: Yes.

Speaker Change: All of this in India. So our exposure to this space is through Avago, where we have made a downside protected structured investment to fund their growth across all three of those <unk>.

Connor Teskey: So our exposure to this space is through Avaada, where we have made a downside-protected, structured investment to fund their growth, across all three, of those, verticals. But the vast majority of that business today is a, I would say, relatively down the fairway, leading, renewable power developer in, in India. In terms of, so, so and while we do have a good relationship with Avaada, and, and we'd happily use, some of those solar panels, when they, are, are up and running and producing, our, our investment exposure is, is, I would say, very, very modest relative to our, our global, procurement needs. Well, that's our exposure today.

Speaker Change: <unk>, but the vast majority of that business today is a I would say relatively down the fairway, leading renewable power developer in India.

Connor Teskey: In terms of, so, so and while we do have a good relationship with Avaada, and, and we'd happily use, some of those solar panels, when they, are, are up and running and producing, our, our investment exposure is, is, I would say, very, very modest relative to our, our global, procurement needs. Well, that's our exposure today.

Speaker Change: In terms of.

Speaker Change: So and while we do have a good relationship with Nevada, and we'd happily use.

Some of those solar panels when they.

<unk> are up and running and producing.

Speaker Change: Our investment exposure is is.

I would say very very modest relative to our global procurement needs.

Speaker Change: <unk>.

Well, that's our exposure today.

Connor Teskey: We are seeing around the world a trend towards just the scaling up of the supply chain for both renewable power and other decarbonization solutions. And we could see ourselves in the future look to be an investor in the scaling up of that supply chain, but only if we can do so on a very attractive risk-adjusted return basis and with an investment profile that we are comfortable with. And that essentially means we would only do it if our investment was backstopped by long-term take-or-pay offtake contracts, very similar to what we look for when we build a new solar plant or build a new wind farm. So, we would not rule out investing in supply chain in the future, but only if we can do so with an investment profile commensurate with what we typically target.

Connor Teske: We are seeing around the world a trend towards just the scaling up of the supply chain for both renewable power and other decarbonization solutions. And we could see ourselves in the future as an investor in the scaling up of that supply chain, but only if we can do so on a very attractive risk-adjusted return basis and with an investment profile that we are comfortable with. And that essentially means we would only do it if our investment was back-stocked by long-term take-or-pay off-take contracts, very similar to what we look for when we build a new solar plant or build a new wind farm. So we would not rule out investing in the supply chain in the future, but only if we can do so with an investment profile commensurate with what we typically target. And that means it would have to be backed by long-term off-take contracts. That's a great color,

Speaker Change: We are seeing around the world a trend towards just the scaling up of the supply chain for both renewable power and other decarbonization solutions and we could see ourselves in the future look to be an investor in the scaling up of that.

Speaker Change: Supply chain, but only if we can do so on a very attractive risk adjusted return basis and with an investment profile that we are comfortable with and that essentially means we would only do it if the our investment was backstopped by long term take or pay offtake.

Speaker Change: <unk> contracts very similar to what we look for when we build a new solar plant or build a new wind farm. So.

Connor Teskey: So, we would not rule out investing in supply chain in the future, but only if we can do so with an investment profile commensurate with what we typically target.

Speaker Change: We would not rule out investing in supply chain in the future, but only if we can do so with an investment profile commensurate with what we typically target and that means it would have to be backed by long term offtake contracts.

Connor Teskey: And that means it would have to be backed by long-term offtake contracts.

Nelson Ng: That's great color. I'll, I'll leave it there. Thanks, Connor.

Speaker Change: That's great color.

David Quezada: I'll leave. Our next question will come from the line of David Quezada with Raymond. Thanks. Good morning, everyone.

Speaker Change: Thanks Connor.

Operator: Our next question will come from the line of David Kisada with Raymond James.

Speaker Change: Our next question will come from the line of David <unk> with Raymond James.

David Quezada: Thanks. Morning, everyone. Maybe first one for me, just on the comments in the release around inbounds that you've gotten, inbound calls, since the Origin deal was announced. Just curious if there's any color you can provide on what kind of opportunities you see there, maybe in terms of the nature of those deals, geographical location, the scale of those opportunities. Any color on that?

David: Thanks, Good morning, everyone.

Connor Teske: Maybe a first one for me just on the comments in the release around inbound calls that you've gotten since the origin deal was announced. Just curious if there's any color you can provide on what kind of opportunities there are, maybe in terms of the nature of those deals, geographical location, the scale of those opportunities, any color on that? For sure. What we would say is that the outcome of the Origin vote was disappointing.

David: Maybe first one for me just on.

The comments in the release around inbounds that you've gotten inbound calls since the origin deal was announced I'm just curious if theres any.

David: Any color you can provide on what kind of opportunities you see there maybe in terms of the nature of those deals geographical location.

David: The scale of those opportunities any color on that.

Connor Teskey: For sure. What we would say is, while the outcome of the Origin vote was disappointing, going through that process and the highly public nature of it, we really demonstrated, one, not only the business plan we were willing to sign up for, but also the operating capabilities and capital commitment we would throw behind one of those large-scale business transformation or power transformation opportunities. The other thing that I think was demonstrated throughout Origin is, while, yes, it did represent buying perhaps a different initial business than when we buy a pure-play renewables developer, what became very clear in our explanation of what we were doing there is, our business plan was really predicated on the exact same thing we do everywhere else around the world.

Speaker Change: For sure.

Speaker Change: What we would say is as well.

Speaker Change: The outcome of the origin.

Speaker Change: <unk> was disappointing going through that process and the highly public nature of it we really demonstrated one not only the business plan, we were willing to sign up for but also the operating capabilities and capital commitment we would throw behind.

Connor Teske: Going through that process and the highly public nature of it, we really demonstrated one, not only the business plan we were willing to sign up for, but also the operating capabilities and capital commitment we would throw behind one of those large-scale business transformation or power transformation opportunities. The other thing that I think was demonstrated throughout Origin is, while, yes, it did represent buying perhaps a different initial business than when we bought a pure-play renewables developer, what became very clear in our explanation of what we were doing there is... Our business plan was really predicated on the exact same thing we do everywhere else around the world. It was predicated on being a leading, high-quality, best-in-class renewable power developer and just doing that within a different company or business construct. I think that was very illustrative and illuminating to the market because we have received inbounds, and I would say those inbounds are across North America, South America, Europe, and Australia since the announcement of Origin.

Speaker Change: One of those large scale.

Speaker Change: Our business transformation.

Speaker Change: Transformation of our power transformation opportunities.

Connor Teskey: The other thing that I think was demonstrated throughout Origin is, while, yes, it did represent buying perhaps a different initial business than when we buy a pure-play renewables developer, what became very clear in our explanation of what we were doing there is, our business plan was really predicated on the exact same thing we do everywhere else around the world.

Speaker Change: The other thing that I think was demonstrated throughout origin is well, yes. It did represent buying perhaps a different initial business than when we buy a pure play renewables developer what became very clear in our explanation of what we were doing there is.

Our business plan was really predicated on the exact same thing we do everywhere else around the world. It was predicated on being a leading high quality best in class renewable power developer and just doing that within a different.

Connor Teskey: It was predicated on being a leading, high-quality, best-in-class renewable power developer and just doing that within a different company or business construct. I think that was very illustrative and illuminating to the market because we have received inbounds, and I would say those inbounds are across North America, South America, Europe, and Australia since the announcement of Origin. The one point I would highlight, however, David, is these are very large and strategic decisions for our company to make. This is really changing the trajectory of a business, you know, a large-scale CapEx program to transition businesses, leading businesses in their market, to less carbon-intensive and more de-risked and more valuable business strategies, but over a multi-year period. Therefore, those types of transactions, they don't happen overnight.

Speaker Change: Company or business construct.

I think that was very illustrative and illuminating to the market because we have received inbounds and I would say those inbounds or across North America, South America, Europe and Australia.

Since the announcement of origin.

The one point I would highlight however, David is.

Connor Teske: The one point I would highlight, however, David, is these are very large and strategic decisions for a company to make. This is really changing the trajectory of a business, from a large-scale CapEx program to leading businesses in their market to less carbon-intensive and more de-risked and more valuable business strategies, but over a multi-year period. Therefore, those types of transactions don't happen overnight. They involve a long-term courtship period, an education process, and working with those companies before a transaction can be agreed upon or come to fruition.

Speaker Change: These are very large and strategic.

Speaker Change: Decisions for our company to make.

Connor Teskey: This is really changing the trajectory of a business, you know, a large-scale CapEx program to transition businesses, leading businesses in their market, to less carbon-intensive and more de-risked and more valuable business strategies, but over a multi-year period. Therefore, those types of transactions, they don't happen overnight.

Speaker Change: This is really changing the trajectory of our business.

Speaker Change: Large scale Capex program to transition businesses that leading businesses in our market to less carbon intensive and more derisked and more valuable business strategies, but over a multiyear period. Therefore, those types of transactions they don't happen overnight.

Connor Teskey: They involve a long-term courtship period, education process, working with those companies, before a transaction can be agreed upon or come to fruition. So while we are having a number of those conversations today, I would suggest that we're excited about them, but they do tend to be longer lead time deals.

Right.

They involve a long term core chip period education process working with those companies before I transaction can be agreed upon or come to fruition. So while we are having a number of those conversations today I would suggest that.

David Quezada: While we are having a number of those conversations today, I would suggest that we're excited about them, but they do tend to be longer-lead time deals. Excellent. Thanks for that, Connor. And then, maybe just one more for me.

Speaker Change: We're excited about them, but they do tend to be longer lead time.

Speaker Change: Deals.

David Quezada: Excellent. Thanks for that, Connor. And then maybe just one more for me. Any quick thoughts on... I mean, I know it certainly sounds like the M&A pipeline is alive and well, and you know, with the stabilized rate environment, things have been better. But I'm just curious what you think the, I guess, uncertainty around the US election, how could that affect things as the year goes on, maybe uncertainty around what happens with the tax credits?

Speaker Change: Excellent thanks for that corner and then maybe just one more for me.

Any any quick thoughts on.

Connor Teske: Any quick thoughts on, I mean, the M&A pipeline is alive and well, and you know the stabilized rate environment things have been better, but I'm just curious what you think the uncertainty around the U.S. election could affect things as the year wears on, maybe uncertainty around what happens with the tax credit? Yeah, certainly. Great question.

Speaker Change: Certainly it sounds like.

Speaker Change: The M&A pipeline is alive and well and.

Speaker Change: The stabilized rate environment things have been better, but I'm just curious what you think the I.

Speaker Change: I guess uncertainty around the U S election, how could that affect things as the year wears on maybe uncertainty around what happens with the tax credits.

Connor Teskey: Yeah, certainly. Great question. We'll revert back to a point that I think it's really critical not to lose sight of, and it ties to a bunch of the major themes we've been discussing on today's call. To date, energy transition, decarbonization, and renewable power development is undoubtedly driven by corporate demand, far, far, far more than it is by government push. And therefore, while politics does have a role to play, it is in no way going to disrupt the rapid growth and the current trend line of investment and opportunity in those sectors.

Speaker Change: Yes, certainly a great question and.

Speaker Change: We.

Connor Teske: And we'll revert back to a point that I think it's really critical not to lose sight of, and it ties to a bunch of the major themes we've been discussing on today's call. Today, energy transition, decarbonization, and renewable power development are undoubtedly driven by corporate demand far, far, far more than it is by government push. And therefore, while politics does have a role to play, it is in no way going to disrupt the rapid growth and the current trend line of investment and opportunity in those sectors. However, I do think it is important to, you know, respond to some of the rhetoric and headlines in the market today, depending on what might happen in the U.S. elections. And I do think there are two very important things to highlight. One, under IRA today, the vast majority of IRA funds are going to Republican states. So while there may be changes to that bill under a different leadership, we wouldn't expect it to change dramatically. And then there is the second thing to highlight.

Speaker Change: We will revert back to a point that I think it's really a.

Speaker Change: Critical not to lose sight of and it ties to a bunch of the major themes, we've been discussing on todays call to date energy.

Speaker Change: Energy transition decarbonization and renewable power development is undoubtedly.

Speaker Change: Driven by corporate demand far far far more than it is by government push and therefore well.

Speaker Change: Politics does have a role to play it is in no way going to disrupt the rapid growth and the current trend line of investment and opportunity in those sectors.

Connor Teskey: However, I do think it is important to you know respond to some of the rhetoric and headlines in the market today, depending on what might happen in the US elections. And I do think there's two very important things to highlight. One, under IRA today, the vast majority of IRA funds are going to Republican states. So while there may be changes to that bill, under a different leadership, we wouldn't expect it to change dramatically. And then the second thing to highlight is, what's fantastic about the current situation in the United States is, we've seen what happens for renewables growth under both a Republican or a Democratic leadership in recent years.

However, I do think it is important too.

Speaker Change: Respond to some of the rhetoric and headlines in the market today, depending on what might happen in the U S elections, and I do think Theres, two very important things to highlight one.

Speaker Change: Under IRR today, the vast majority of IRA funds are going to Republican states. So well there may be changes to that bill under a different leadership, we wouldn't expect it to change dramatically and then the second thing to highlight is.

Connor Teskey: So while there may be changes to that bill, under a different leadership, we wouldn't expect it to change dramatically. And then the second thing to highlight is, what's fantastic about the current situation in the United States is, we've seen what happens for renewables growth under both a Republican or a Democratic leadership in recent years.

Connor Teske: What's fantastic about the current situation in the United States is we've seen what happens to renewable energy growth under both Republican and Democratic leadership in recent years. And even going back to when there was Republican leadership in the United States, that was one of the fastest growing periods for renewable power in that country. So I think that does reiterate that while government policy can have an effect on things, that trend line of corporate demand is going to set the pace and growth of this industry, and government policy is simply going to put a little bit of ebb and flow around that trend line. It's certainly not going to wildly change our approach to the market or our strategy. That's great, Collar. I appreciate it. I'll turn it over to you.

Speaker Change: What's fantastic about the current situation in the United States is we've seen what happens for renewables growth under both a Republican or Democratic leadership in recent years and even going back to when there was Republican leadership in the United States that was one of the.

Connor Teskey: And even going back to when there was Republican leadership in the United States, that was one of the fastest-growing periods for renewable power in that country. So, I think that does reiterate that while government policy can have an effect on things, that trend line of corporate demand is going to set the pace and growth of this industry, and government policy is simply going to put a little bit of ebb and flow around that trend line. It's certainly not gonna wildly change our approach to the market or our strategy.

Speaker Change: Fastest growing periods for renewable power in that country. So I think that does reiterate that while government policy can have an effect on things that trend line of corporate demand is going to set the pace in growth of this industry and government policy is simply going to.

Speaker Change: To put a little bit of ebb and flow around that trend line, it's certainly not going to wildly change our approach to the market our strategy.

David Quezada: That's great, Collier. Appreciate it. I'll turn it over. Thank you.

Speaker Change: That's great color I appreciate it I'll turn it over thank you.

Operator: Our next question comes from the line of Ben Pham with BMO.

Ben Pham: Our next question comes from the line of Ben Pham with BMO. Hi, thank you. Good morning.

Speaker Change: Our next question comes from the line of Ben Pham with BMO.

Ben Pham: Hi, thank you. Good morning. I wanted to continue the topic of corporate M&A versus asset acquisitions. And I'm curious, when you think about corporate deals with Brookfield Renewable historically, or even how you think about it going forward, what do you think the main benefits for you specifically on a corporate transaction, especially when you talk about maybe the long drawn-out process for courtship?

Alright. Thank you good morning, I wanted to continue to the topic of.

Connor Teske: I wanted to continue on the topic of Corporate M&A versus Asset Acquisitions. And I'm curious when you think about corporate deals, renewable, historic, or even how you think about them going forward.

Ben Pham: Corporate M&A versus asset acquisitions.

Ben Pham: I'm curious when you think about corporate deals.

Ben Pham: Brookfield renewable historically or even how you think about it going forward.

Ben Pham: What do you think the main benefit is for you specifically in a corporate transaction, especially when you talk about maybe that long drawn-out process in court? Yeah, certainly. So Ben, it's a great question.

Ben Pham: What do you think the main benefits for you specifically on a corporate transaction, especially when you talk about maybe not a long drawn out process for courtroom.

Connor Teskey: Yeah, certainly. So, Ben, it's a great question, and there, there's two or three things I would highlight. In particular, it's an environment where we can very much differentiate ourselves using our scale and operating capabilities. Those corporates are essentially picking a partner to help them transition to a new business model that is going to be more sustainable and more valuable for decades to come. They don't want to pick a partner who isn't very credible without best-in-class capabilities. So we do think it is an environment where we can do those types of deals on a bilateral basis, and really be differentiated and therefore hopefully target some very attractive returns on our capital.

Speaker Change: Yes, certainly.

Speaker Change: Ben It's a great question.

Connor Teske: And there are two or three things I would highlight. In particular, it's an environment where we can very much differentiate ourselves using our scale and operating capabilities. Those corporates are essentially picking a partner to help them transition to a new business model that is going to be more sustainable and more valuable for decades to come. They don't want to pick a partner who isn't very, very credible without best-in-class capabilities.

There is two or three things I would highlight in particular, it's an environment, where we can very much differentiate ourselves using our scale and operating capabilities.

Speaker Change: At those corporate.

Speaker Change: <unk> essentially picking a partner to help them transition to a new business model that is going to be more sustainable and more valuable for decades to come.

Connor Teskey: They don't want to pick a partner who isn't very credible without best-in-class capabilities. So we do think it is an environment where we can do those types of deals on a bilateral basis, and really be differentiated and therefore hopefully target some very attractive returns on our capital.

Speaker Change: I don't want to pick a partner who is in very very credible without best in class capabilities. So we do think it is an environment, where we can do those types of deals on a bilateral basis.

Connor Teske: So we do think it is an environment where we can do those types of deals on a bilateral basis and really be differentiated and, therefore, hopefully, target some very attractive returns on our capital. The other thing that is important to highlight is that, not dissimilar to what we've seen in other, call it power transformation or business transformation opportunities, there is an underappreciated benefit in some of those deals. These are often large and leading corporations in many of the markets that they operate in.

And really be differentiated and therefore <unk>.

Speaker Change: <unk> target some very attractive.

Speaker Change: Returns on our capital.

Connor Teskey: The other thing that is important to highlight is not dissimilar to what we've seen in other, call it, power transformation or business transformation opportunities. There is an underappreciated benefit in some of those deals. That those are often large and leading corporates in many of their markets that they operate in. And as a result, there's often some very attractive embedded infrastructure within those businesses that we can utilize to make the invested capital in renewables build-out or other transition initiatives either more de-risked or done at higher returns. Because these businesses are often leading and have been built up over years and decades, the underlying infrastructure is sometimes an underappreciated benefit of some of those transactions.

Other thing.

Speaker Change: That is important to highlight is.

Speaker Change: Sure.

Speaker Change: Not dissimilar to what we've seen in other call it power transformation or business transformation opportunities. If there is an underappreciated benefit in some of those deals those are often large and leading corporates in many of the markets that they operate in and as a result, there is <unk>.

Connor Teskey: And as a result, there's often some very attractive embedded infrastructure within those businesses that we can utilize to make the invested capital in renewables build-out or other transition initiatives either more de-risked or done at higher returns. Because these businesses are often leading and have been built up over years and decades, the underlying infrastructure is sometimes an underappreciated benefit of some of those transactions.

Connor Teske: And as a result, there's often some very attractive embedded infrastructure within those businesses that we can utilize to make the invested capital in renewables build out or other transition initiatives either more de-risked or done at higher returns. Because these businesses are often leaders and have been built up over years and decades, the underlying infrastructure is sometimes an underappreciated benefit of some of those transactions. Interesting. Maybe my second and last one, the distribution, about 5%, is quite solved in this environment. And I don't make it seem like this, this question around is not, it wasn't strong, but I'm curious more.

Speaker Change: Often some very attractive embedded infrastructure within those businesses that we can utilize to make the invested capital in renewables buildout or other transition initiatives, either more derisked or done at higher returns because these businesses are often leading and have been built up over a year.

Speaker Change: <unk> in decades, the underlying infrastructure is sometimes an underappreciated benefit of some of those transactions.

Ben Pham: Interesting. And maybe my second and last one, the distribution, 5%, quite solid in this environment, and I don't make it seem like this question around it is not... It wasn't strong, but I'm curious more that 5%, how do you- how do we think about that relative to your 10% growth rate plus, and your guidance of 5% to 9%? How do you reconcile that?

Interesting.

Speaker Change: My second and last one the distribution.

Speaker Change: 5%.

Quite solid.

Speaker Change: This environment.

Speaker Change: They make it seem like this.

Speaker Change: This question around is it does not.

Speaker Change: It wasn't strong, but I'm curious more.

Ben Pham: That 5%. How do you, how do we think about that relative year, your 10% growth rate plus and your guidance of 5-9%? How do you reconcile that?

Speaker Change: That 5% how do you how do we think about that relative to your 10% growth rate plus.

Speaker Change: And your guidance of 5% to 9% how do you how do you reconcile that.

Connor Teskey: Yeah, absolutely. So we remain very committed to our increasing our distribution within that five to 9% annual increase range that we have had in the market for years now. And our decision around where we set within that range is always dictated by where can we drive the best returns for our capital. And because we are simply seeing so much growth and have seen so much growth in our industry and in our sector, and quite frankly, within our company, specifically, both our organic pipeline and our M&A pipeline, we have been at the low end of that range, and that's simply because we are seeing such attractive opportunities to deploy that capital very accretively into growth.

Speaker Change: Yeah, absolutely. So we remain very committed to our.

Connor Teske: Absolutely. So we remain very committed to increasing our distribution within that 5% to 9% annual increase range that we've had in the market for years now. And our decision around where we set within that range is always dictated by where we can drive the best returns for our capital. And because we are simply seeing so much growth and have seen so much growth in our industry and in our sector, and, quite frankly, within our company, specifically both our organic pipeline and our M&A pipeline, we have been at the low end of that range. And that's simply because we are seeing such attractive opportunities to deploy that capital very accretively into growth. Obviously, we're a long way away from making those decisions for years to come.

Speaker Change: Increasing our distribution within that that 5% to 9% annual increase range that we.

Pat in the market for years, now and our decision around where we set within that range is always dictated by where can we drive the best returns for our capital and because we are simply seeing so much growth and have seen so much growth in.

Connor Teskey: And because we are simply seeing so much growth and have seen so much growth in our industry and in our sector, and quite frankly, within our company, specifically, both our organic pipeline and our M&A pipeline, we have been at the low end of that range, and that's simply because we are seeing such attractive opportunities to deploy that capital very accretively into growth.

Speaker Change: In our industry and in our sector and quite frankly within our company specifically, both our organic pipeline and our M&A pipeline. We have been at the low end of that range and Thats simply because we are seeing such attractive opportunities to deploy that capital very.

Speaker Change: Very accretively into growth.

Connor Teskey: Obviously, we're a long way away from making those decisions for years to come, but that trend's been quite consistent for a number of years now, and no doubt played a big role in where we set the distribution increase this year.

Speaker Change: Obviously, we're a long way away from making those decisions for years to come but that trend has been quite consistent for a number of years now and no doubt.

Connor Teske: But that trend has been quite consistent for a number of years now and no doubt played a big role in where we set the distribution increase this year. Okay, understood. Thank you. Our next question comes from the line of Joe Nussbaum with BNP Power. Hi, you have a motion from BNP.

Speaker Change: Played a big role in where we set the distribution increase this year.

Ben Pham: Okay, understood. Thank you.

Speaker Change: Okay understood. Thank you.

Operator: Our next question comes from the line of Moses with BNP Paribas.

Speaker Change: Our next question comes from the line of Joe Nussbaum with BNP Paribas.

Joe Nussbaum: Hi, you have Moses on from BNP. How do you, how do you think about contracted versus spot power price going forward as the percent moves into the 80s percent and 70s?

Moses Sutton: Hi, you have Moses on from BNP. How do you, how do you think about contracted versus spot power price going forward as the percent moves into the 80s percent and 70s?

Joe Nussbaum: Hi, you have.

Joe Nussbaum: On from BNP.

Joe Nussbaum: How do you think about contracted versus spot power prices going forward.

Joe Nussbaum: How do you think about contracted versus spot power price going forward as the percent moves into the 80% and 70% range? Would you see decreases or increases in realized price and how does hedges play a role? Yeah, certainly. So our business is outside of some of the hydro facilities we own in North America, in essentially the United States, and Colombia is essentially 100% contracted business. And we continue to believe that the risk-adjusted returns you can get by fully contracting out our wind and solar pipelines, all of our new development, the attractive financing you can get against those contracts, and the stability it provides for our growth and our earnings are the most attractive thing we can do, and therefore, we remain committed to not building on SPAC, only building when we've secured that long-term contracted revenue offtake.

Joe Nussbaum: The percent moves into the 80% and 70.

[Analyst] (BNP Paribas): ... would you see decreases or increases in realized price and how would hedges play a role?

Moses Sutton: ... would you see decreases or increases in realized price and how would hedges play a role?

Joe Nussbaum: Would you see decreases or increases in realized pricing and how it hedges play a role.

Connor Teskey: Yeah, certainly. So our business is, outside of some of the hydro facilities we own in North America, essentially the United States and Colombia, essentially 100% contracted business. And we continue to believe that the risk-adjusted returns you can get by fully contracting out our wind and solar pipelines, all of our new development, the attractive financing you can get against those contracts, and the stability it provides to our growth and our earnings, is the most attractive thing we can do. And therefore, we remain committed to not building on spec, only building when we've secured that long-term contracted revenue offtake. But to your question, you know, our contract profile, I would say, almost always looks the way that it does today.

Speaker Change: Yes, certainly so our business is.

Speaker Change: Outside of some of the hydro facilities, we own in north in essentially the United States and Colombia is essentially 100% contracted business.

Speaker Change: And we continue to believe that the risk adjusted returns you can get by fully contracting out our wind and solar pipelines all of our new development. The attractive financing you can get against those.

Speaker Change: Those contract and the stability it provides to our growth and our earnings is the most attractive thing we can do and therefore, we remain committed to not building on spec only building when we've secured that that long term contracted revenue offtake.

Connor Teskey: And therefore, we remain committed to not building on spec, only building when we've secured that long-term contracted revenue offtake. But to your question, you know, our contract profile, I would say, almost always looks the way that it does today.

Joe Nussbaum: But to your question, our contract profile, I would say almost always looks the way that it does today, a little bit higher in the near term and then kind of fading down, call it 10 percentage points over the next five years. And what that is is largely just our hydro portfolio that does have some modest components of merchant. We do that to protect against the variability of the resource.

Speaker Change: But to your question.

Speaker Change: Our contract profile I would say almost always looks the way that it does today, a little bit higher in the near term and then kind of fading down call. It 10 percentage points over the next five years and what that is is largely just are.

Connor Teskey: A little bit higher in the near term and then kind of fading down, call it 10 percentage points over the next 5 years. And, and what that is, is largely just our hydro portfolio that does have some modest component of merchant. We do that to protect against the variability of the resource. And, and very simply, some of those contracts are, are rolling off over the next two or three years, but we would simply look to recontract them at that point. And I would say, you know, being at essentially 90% contracted for the current year, and, and kind of tailing off 10 percentage points from there over a 5-year forecast, I would say that profile is largely going to stay the same and just keep rolling forward as time passes.

Speaker Change: Hi drove portfolio that does have some modest component of merchant.

Speaker Change: We do that to protect against the variability of the resource.

Connor Teske: And very simply, some of those contracts are rolling off over the next two or three years, but we would simply look to recontract them at that point. And I would say, you know, being at essentially 90% contracted for the current year and kind of tailing off 10 percentage points from there over a five-year forecast, I would say that profile is largely going to stay the same and just keep rolling forward as time passes. If anything, it might go a little bit up because the power price environment today is far more constructive than it's been over the last three to five years, so we might enter into more long-term contracts on that hydro portfolio. Otherwise, I would say that that profile is largely going to stay the same even as time passes and rolls forward. Got it.

Speaker Change: And very simply some of those contracts are rolling off over the next two or three years, but we would simply look to re contract them at that point and I would say being at essentially 90% contracted for the current year.

Connor Teskey: And I would say, you know, being at essentially 90% contracted for the current year, and, and kind of tailing off 10 percentage points from there over a 5-year forecast, I would say that profile is largely going to stay the same and just keep rolling forward as time passes.

Speaker Change: In kind of tailing off 10 percentage points from there over a five year forecast I would say that profile is largely going to stay the same and just keep rolling forward as time passes if anything it might go a little bit up because.

Connor Teskey: If anything, it might go a little bit up because the power price environment today is far more constructive than it's been over the last three to five years. So we might enter into more long-term contracts on that hydro portfolio. But otherwise, I would say that that profile is largely going to stay the same, even as time passes and rolls forward.

The power price environment today is far more constructive than it's been over the last three to five years. So we might enter into more long term contracts on that hydro portfolio.

Speaker Change: Otherwise I would stay that say that that profile is largely going to stay the same.

Speaker Change: Even as time passes and rolls forward.

[Analyst] (BNP Paribas): Got it. Okay. Okay, that, that makes a lot of sense. And I guess just one more on up financing. You completed $500 million in 2023. I think it was $800 million was the most recent expectation. Is this due to the LTA performance, you know, performance versus LTA, or how should we think about this for 2024? Or is it just lumpy?

Moses Sutton: Got it. Okay. Okay, that, that makes a lot of sense. And I guess just one more on up financing. You completed $500 million in 2023. I think it was $800 million was the most recent expectation. Is this due to the LTA performance, you know, performance versus LTA, or how should we think about this for 2024? Or is it just lumpy?

Speaker Change: Got it okay. Okay that makes a lot of sense and I guess just one.

Connor Teske: Okay, okay. That makes a lot of sense. And I guess just one on up financing, you completed $500 million in 2023. I think $800 million was the most recent expectation. Is this due to the LTA performance vs. LCA, or how should we think about this for 2024, or is it just lumped together? Perhaps I'll start and then maybe, Wyatt, you can jump in if I've missed anything. I would say it certainly wasn't anything to do with LTA performance. That didn't even come into the discussion.

Speaker Change: Up financing you completed $500 million in 2023, I think it was $800 million would be most recent expectation is due to the LTA performing performance versus <unk>, how should we think about that through 2024 or is it just lumpy.

Connor Teskey: Perhaps I'll start, and then maybe, Wyatt, you can jump in if I've missed anything. I would say it certainly wasn't anything to do with LTA performance. That didn't even come into the discussion. What we are always looking to do is use excess leverage capacity within our portfolio as a means to raise liquidity at very attractive rates that we can then reinvest into growth in a very accretive manner. We'll look to do that on an opportunistic basis at all times going forward. A great example of that was how we tapped the MTN market just in January, securing 30-year term debt at very attractive rates when there was an attractive opening in that market.

Perhaps I'll start and then maybe why you can jump in if I've missed anything I would say it certainly wasn't anything to do with.

Speaker Change: LTA performance.

<unk> didn't even come into the discussion what we are always looking to do is use.

Wyatt: What we are always looking to do is use excess leverage capacity within our portfolio as a means to raise liquidity at very attractive rates that we can then reinvest in growth in a very accretive manner. And we'll look to do that on an opportunistic basis at all times going forward. A great example of that was how we tapped the MTN market just in January, securing 30-year term debt at very attractive rates when there was an attractive opening in that market. I would say there is nothing specific around the timing of those up-financings, but Wyatt, I'll hand it to you if there's anything to add. Yeah. Moses, look, the financing environment for the majority of where we're looking to do those up-financings, on our hydro assets, the financing environment continues to be robust and is probably even more robust as rates have normalized. And so really, this was just a factor of timing and planning around our funding needs, etc. That capacity that we had previously mentioned, that additional $300 million, continues to be there. And it was just around us managing our sources and uses based on our growth pipeline, etc. So it was really just a factor of timing.

Speaker Change: Excess layer.

Speaker Change: Average capacity within our portfolio as a means to raise liquidity at very attractive rates that we can then reinvest into growth in a very accretive manner and we will look to do that on an opportunistic basis at all times going forward. A great example of that was how we tapped the MTN.

Connor Teskey: We'll look to do that on an opportunistic basis at all times going forward. A great example of that was how we tapped the MTN market just in January, securing 30-year term debt at very attractive rates when there was an attractive opening in that market.

Speaker Change: <unk> just in January.

Speaker Change: Hearing 30 year term debt at very attractive rates. When there was an attractive opening in that market. So I would say there is nothing specific around the timing of those up financings, but why it I'll hand to you if there's anything to add.

Connor Teskey: So I would say there is nothing specific around the timing of those upfront financings, but Wyatt, I'll hand to you if there's anything to add.

Wyatt Hartley: Yeah. Moses, look, the financing environment for the majority of where we're looking to do those up financings are on our hydro assets. The financing environment continues to be robust and is probably even more robust as rates have normalized. And so really, this was just a factor of timing and planning around our funding needs, what have you. That capacity that we had previously mentioned, that additional $300 million, continues to be there, and it was just around us managing our sources and uses based on our growth pipeline, what have you. So it was really just a factor of timing.

Speaker Change: Yes.

Speaker Change: Look the financing environment for the majority of where we're looking to do those financing.

Speaker Change: Our on our hydro assets the financing environment.

It continues to be robust it is probably even more robust.

Speaker Change: Rates have normalized and so really this was just a factor of timing and planning around our our funding needs. What have you that that capacity that we had previously mentioned that additional $300 million continues to be there and it was just around us managing our.

Speaker Change: Our sources and uses based on our growth pipeline what have you. So it was really just a factor of timing and as.

Wyatt Hartley: And as I mentioned, the capacity is there, and in fact, the environment has gotten better than we would have made that estimate around $800 million.

Wyatt: And as I mentioned, the capacity is there, and in fact, the environment has gotten better than we would have made it. That estimate is around 800 million. Very helpful. Thanks again. That's all the time we have for Q&A today.

Speaker Change: As I mentioned the <unk>.

Speaker Change: Capacity is there and in fact, the environment has gone better than we would have made.

Speaker Change: That estimate around $800 million.

[Analyst] (BNP Paribas): Very helpful. Thanks again.

Moses Sutton: Very helpful. Thanks again.

Speaker Change: Very helpful. Thanks again.

Operator: That's all the time we have for Q&A today. I'd like to turn the call back to Connor Teskey for closing remarks.

Speaker Change: That's all the time, we have for Q&A today, I would like to turn the call back to <unk> for closing remarks.

Connor Teske: I'd like to turn the call back to Connor Teske for closing remarks. Thank you everyone for joining this quarter's call. We appreciate your interest and support of Brookfield Renewable, and we look forward to updating you with our Q1 results in a couple months.

Connor Teskey: Thank you, everyone, for joining this quarter's call. We appreciate your interest and support of Brookfield Renewable, and we look forward to updating you with our Q1 results in a couple of months. Thank you, and have a great day. Cheers!

Speaker Change: Thank you everyone for joining this quarter's call. We appreciate your interest and support of Brookfield renewable and we look forward to updating you with our Q1 results in a couple of months. Thank you and have a great day.

Operator: Thank you and have a great day. Cheers. This concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Yes.

Speaker Change: Okay.

Q4 2023 Brookfield Renewable Corp Earnings Call

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