Q2 2024 Brookfield Renewable Corp Brookfield Renewable Partners LP Earnings Call

Yeah.

Operator: Good day, and thank you for standing by. Welcome to the Brookfield Renewables second quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Connor Teskey, Chief Executive Officer. Please go ahead.

Good day, and thank you for standing by welcome.

Speaker Change: Welcome to the Brookfield renewables second quarter 'twenty 'twenty four earnings conference call. At this time, all participants are in listen only mode.

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

Speaker Change: Ask a question during the session you will need to press star one one of your telephone.

Speaker Change: I didn't hear an automated message advising your hand is raised to withdraw your question. Please press star one again please.

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

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

Connor Tusky: Thank you operator.

Connor Teskey: Thank you, operator. Good morning, everyone, and thank you for joining us for our second quarter 2024 conference call. Before we begin, we would like to remind you that a copy of our news release, industry supplement, and letter to unit holders can be found on our website. We also want to remind you that we may make forward-looking statements during this call. These statements are subject to known and unknown risks, and future results may differ materially.

Connor Tusky: Good morning, everyone and thank you for joining us for our second quarter 'twenty 'twenty four conference call.

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 also want to remind you that we may make forward looking statements on this call. These statements are subject to known and unknown risks and future results may differ materially for more information you are encouraged to review our regulatory filings available on SEDAR.

Connor Teskey: For more information, you are encouraged to review our regulatory filings available on CDAR, EDGAR, and on our website. On today's call, we will provide a review of our second quarter performance, the environment for renewables, and how our differentiated access to capital and capabilities has positioned us to excel in the current market. Then, Ed Bayford from our investment team will speak about our recently announced proposed acquisition of NEOIN. And lastly, Wyatt will conclude the call by discussing our operating results and financial position. Following our remarks, we look forward to taking your questions.

Connor Tusky: And on our website.

Connor Tusky: On today's call, we will provide a review of our second quarter performance the environment for renewables.

Connor Tusky: How our differentiated access to capital and capabilities has positioned us to excel in the current market.

Ben: Then at Baker from our investment team will speak to our recently announced proposed acquisition of nailing it.

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

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

Connor Teskey: The business performed well this quarter, building on our strong start to the year. We delivered record funds from operations for the second quarter, benefiting from our growth and development activities. And we remain well positioned to deliver on our double-digit FFO per unit growth target for the year. During the quarter, we successfully deployed significant capital into growth opportunities that further enhanced our market-leading reach and scale. We did this by adding leading platforms and attractive markets with large operating businesses and development pipelines that complement our current operations and further diversify our cash flow. We also progressed the projects in our development pipeline and successfully commissioned approximately 1.4 gigawatts of new capacity in the quarter. All together, across our development activities and M&A capital, we have deployed or committed to deploy.

Wyatt: The business performed well this quarter building on our strong start to the year.

Speaker Change: We delivered record funds from operations for the second quarter benefiting from our growth and development activities and we remain well positioned to deliver on our double digit <unk> per unit growth target for the year.

During the quarter, we successfully deployed significant capital into growth opportunities and further enhanced our market leading reach and scale.

Speaker Change: We did this by adding leading platforms in attractive markets with large operating businesses and development pipelines that complement our current operations and further diversify our cash flows.

Speaker Change: We also progressed the projects in our development pipeline and successfully commissioned approximately one four gigawatts of new capacity in the quarter.

Altogether across our development activities and M&A capital, we deployed or committed to deploy.

Connor Teskey: We invested almost $9 billion, or almost $1 billion net to Brookfield Renewable, a record for our business. Our success in identifying and executing on attractive opportunities that deliver returns at or above our target is a function of both our differentiated capabilities and access to capital at a time when funding is scarce for some players. This is currently paired with a very constructive market environment for renewables where demand is outpacing supply, driven by data-centered demand and broader electrification.

Speaker Change: We invest it up almost $9 billion or almost $1 billion net to Brookfield renewable a record for our business.

Speaker Change: Our success in identifying and executing on attractive opportunities that deliver returns at or above our target is a function of both our differentiated capabilities.

Speaker Change: And access to capital at a time when funding is scarce for some players.

Speaker Change: This is currently paired with a very constructive market environment for renewables.

Speaker Change: Demand is outpacing supply driven by data center demand and broader electrification.

Connor Teskey: Indicative of this, just this past week, PGAM, a top market for data center development, and a market where we have a significant presence, had its capacity auction for 2025 and 2026 delivery. In this auction, prices hit record highs, increasing almost 10 times from the last auction, indicative of supply and demand dynamics in the market.

P.J.: Indicate indicative of this just this past week P. J a N a top market for data center development and a market, where we have significant presence.

Speaker Change: Its capacity auction for 2025 and 2026 delivery.

P.J.: And this auction prices hit record highs, increasing almost 10 times in the last auction indicative of supply and demand dynamics in the market.

Connor Teskey: Data center investment continues to accelerate globally, and it is widely estimated that data centers could reach up to 10% and 20% of electricity consumption globally and in the United States, respectively, by the end of the decade. This is on top of the electrification of industrial capacity, heating for houses, and other uses that are driving unprecedented demand for electricity. To put this in perspective, the global installed capacity for electricity generation is expected to more than double over the next 20 years, while also trying to replace half of the existing capacity that will be retired as it is very carbon intensive. A truly unprecedented undertaking.

P.J.: Datacenter investment continues to accelerate globally and it is widely estimated the data centers could reach up to 10, and 20% of electricity consumption globally and in the United States, respectively by the end of the decade.

P.J.: This is on top of the electrification of industrial capacity heating for houses and other uses that is driving unprecedented unprecedented dented demand for electricity.

P.J.: To put this in perspective.

P.J.: Global installed capacity for electricity generation is expected to more than double over the next 20 years, while also trying to replace half of the existing capacity that will be retired as it is very carbon intensive.

P.J.: A truly unprecedented undertaken.

Connor Teskey: Coming at this dynamic from a different perspective, as recently as two decades ago, energy production from wind and solar accounted for a negligible portion of global electricity, which compares to last year, when it accounted for approximately 13% of the electricity consumed globally. This means consumption from these sources has doubled every three and a half years or grown at almost a 25% compound annual growth rate for 20 years, a staggering achievement over a sustained period of time.

Speaker Change: Coming out of this dynamic from a different perspective.

P.J.: As recently as two decades ago.

P.J.: Production from wind and solar accounted for a negligible portion of the global electricity mix.

P.J.: Which compares to last year, where it accounted for approximately 13% of the electricity consumed globally.

P.J.: This means consumption from these sources has doubled every three and a half years are growing at almost 25% compound annual growth rate for 20 years, a staggering achievement over a sustained period of time.

Connor Teskey: Remarkably, this trajectory is expected to continue, driven by the demand we are seeing from technology companies, electrification, and replacement of thermal capacity. This sustained level of growth has resulted in the development and scaling of a supply chain for renewable energy that has helped position these technologies as the lowest cost sources of bulk power in most markets globally. We've seen the cost for solar and wind decrease by 90% and 65%, respectively, in the last 15 years. And while there was policy support and tax credits that helped the initial growth of these technologies...

P.J.: Remarkably this trajectory is expected to continue driven by the demand, we're seeing from technology companies electrification and replacement of thermal capacity.

P.J.: This sustained level of growth has resulted in the development and scaling of our supply chain for renewable energy that has helped position. These technologies as the lowest cost sources of bulk power in most markets globally.

P.J.: We've seen the cost for solar and wind decreased 90% and 65% respectively. In the last 15 years.

P.J.: And while there was policy support in tax credits that helped the initial growth at these technologies. It is squarely the cost competitiveness and other features such as energy independent and clean characteristics that together with the accelerating demand from commercial and industrial customers to support digitalization and <unk>.

Connor Teskey: It is squarely the cost competitiveness and other features, such as energy independence and clean characteristics, that, together with the accelerating demand from commercial and industrial customers to support digitalization and electrification, are driving increased returns for these assets both today and going forward. Renewables are fundamentally acting as an enabler of growth, as increased access to clean, low-cost power permits further investment from businesses, which results in increased consumption of power, like we are seeing with data center growth.

P.J.: Rectification are driving increased returns for these assets, both today and going forward.

P.J.: Renewables are fundamentally acting as an enabler of growth as increased access to clean low cost power permits further investment from businesses, which results in increasing consumption of power like we are seeing with data center growth.

Connor Teskey: A side effect of the increase in demand for power is that it further reduces costs from the build-out of a larger and more competitive supply chain, creating additional economies of scale, reducing costs further, and spurring even further incremental demand.

P.J.: A side effect of the increase in demand for power is that it further reduces cost from the build out of a larger and more competitive supply chain, creating additional economies of scale, reducing costs further and spring even further incremental demand.

Connor Teskey: In this very constructive environment, we are continuing to differentiate ourselves with a large operating fleet and an expansive development pipeline, which now stands at over 230,000 megawatts, of which approximately 65,000 megawatts has advanced stage land interconnection and permitting status in core renewables markets. This large advanced pipeline and our credibility in delivering projects is enhancing our position as the partner of choice for the largest buyers of clean power. To put it very simply, nobody is better placed to provide clean power on a global basis to fuel this AI revolution and the growing increase in electricity demand.

Speaker Change: In this very constructive environment, we are continuing to differentiate ourselves with a large operating fleet and expansive development pipeline, which now stands at over 230000 megawatts of which approximately 65000 megawatts has advanced stage land interconnection and permitting.

Speaker Change: Natus and core renewables markets.

P.J.: This large advanced pipeline and our credibility and delivering projects is enhancing our position as the partner of choice for the largest buyers of clean power to.

P.J.: It very simply nobody is better placed to provide clean power on a global basis to fuel this AI revolution, and the growing increase in electricity demand.

Connor Teskey: Our activities this quarter further enhance our position as a key enabler of the technology sector, including our acquisition of NEOEN that adds a large operating and development pipeline in new core renewables markets. This is an increasingly valuable pipeline as we are seeing growing near-term demand for clean energy outpacing supply in these regions. It is this pipeline, our diversity across technologies, and our strong reputation and capabilities that we have built up over decades that have allowed us to secure partnerships that de-risk our future growth, like the framework agreement with Microsoft, where we have agreed to deliver over 10.5 gigawatts of new renewable energy capacity between 2026 and 2030.

P.J.: Our activities this quarter further enhance our position as a key enabler of the technology sector, including our acquisition of now and that adds a large operating and development pipeline in new core renewables markets.

P.J.: This is an increasingly valuable pipeline as we are seeing growing near term demand for clean energy outpacing supply in these regions.

P.J.: It is this pipeline our diversity across technologies, and our strong reputation and capabilities that we have built up over decades that have allowed us to secure partnerships that derisked our future growth.

P.J.: Like the framework agreement with Microsoft where we have agreed to deliver over 10, five gigawatts of new renewable energy capacity between 2026 and 2030.

Connor Teskey: In the past quarter, we continued to build on our strong relationships with commercial and industrial customers, and 90% of the generation we contracted for new assets was signed with these types of customers. Looking forward, we are also seeing a similar scenario to solar play out in terms of the economics and demand for battery energy storage systems, where cost reductions are spurring increased demand, resulting in further cost reductions and again further, more incremental demand growth. Costs for batteries have declined 85% in the last decade and 60% in the last six years.

P.J.: In the past quarter, we continued to build on our strong relationships with commercial and industrial customers and 90% of generation. We contracted for new assets was signed with these types of buyers.

P.J.: Okay.

P.J.: Looking forward. We are also seeing a similar scenario to solar play out in terms of the economics and demand for battery energy storage systems.

P.J.: Cost reductions are spurring increased demand, resulting in further cost reductions and again further more incremental demand growth.

P.J.: Cost per batteries have declined 85% in the last decade, and 60% in the last six years batteries.

Connor Teskey: Batteries are benefiting from economies of scale with the growth of the electrical vehicle market, from Incremental Demand for Capacity and Grid Stabilizing Services, and from enabling increased penetration of low-cost renewables by providing a power solution for customers when the sun is not shining or the wind is not blowing. With lower capital costs, higher potential revenues, and increasing demand for this type of solution from customers, we are focused on deploying capital into battery energy storage solutions in select markets. This quarter, inclusive of NALIN.

P.J.: Batteries are benefiting from economies of scale with the growth of a lot of the electrical vehicle market.

P.J.: From incremental demand for capacity and grid stabilizing services.

P.J.: And from enabling increased penetration of low cost renewables by providing a power solution for customers. When the Sun is not shining or the wind is not blowing.

P.J.: With lower capital costs higher potential revenues and increasing demand for this type of solution from customers. We are focused on deploying capital into battery energy storage solutions in select markets.

Neyland: This quarter inclusive of Neyland.

Connor Teskey: We were awarded 20-year capacity contracts for 800 megawatts of battery storage from the grid operator in Ontario. The projects have attractive risk-adjusted return profiles given the long-dated fixed revenue stream and high-quality offtake. We also began construction on 220 megawatts of battery storage capacity in Texas, targeting commissioning in the second half of 2025, where we expect very strong returns. With this development project and the closing of the NAON acquisition, we will be one of the largest battery storage developers globally with over 2.3 gigawatts of operating and under construction capacity, including our pumped storage assets, which are benefiting from the same demand drivers as batteries.

P.J.: We were awarded 20 year capacity contracts for 800 megawatts of battery storage from the grid operator in Ontario.

P.J.: The projects have attractive risk adjusted return profiles, given the long dated fixed revenue stream and high quality off taker.

P.J.: We also began construction on 220 megawatts of battery storage capacity in Texas targeting.

Neyland: Targeting commissioning in the second half of 2025, where we expect very strong returns.

Neyland: With this development projects and the closing of the <unk> acquisition, we will be one of the largest battery storage developers globally with over two three gigawatts of operating and under construction capacity.

Neyland: Including our pump storage assets, which are benefiting from the same demand drivers as batteries, we will have almost five gigawatts of operating and under construction storage capacity.

Connor Teskey: We will have almost five gigawatts of operating and under construction storage capacity, alongside our hydro assets, which have significant reservoir capacity. These assets are increasingly critical to enabling the deployment of low-cost, 24-7 clean power solutions that meet customers' needs and represent a significant competitive advantage for our business. With that, we will now turn it over to Ed to discuss how we are approaching growth and speak to our acquisition of NAON.

Neyland: Alongside our hydro assets, which have significant reservoir capacity.

Neyland: These assets are increasingly critical to enabling the deployment of low cost 24, 7% clean power solutions that meet customers' needs and represent a significant competitive advantage for our business.

Neyland: With that we will now turn it over to Ed to discuss how we are approaching growth and speak to our acquisition of <unk>.

Ed Bayford: Thank you, Connor, and good morning, everyone. This quarter, we have successfully sourced and executed several acquisitions by leveraging our global investment team, access to scale capital, and experience integrating complex classes. We are a customer-focused business, guided by the needs of our partners. With this in mind, we were able to execute on acquisitions that bring increased scale and breadth to our portfolio, further differentiating our platform, and in particular, enhancing our position as the global leader in servicing technology and AI-driven power demand, and doing so at a time when there is less funding available in the market, enabling us to secure acquisitions at good value.

Ed: Thank you Conor and good morning, everyone.

Ed: This quarter, we have successfully sourced and executed several acquisitions by leveraging our global investment team access to scale capital and experience integrating complex platforms.

Speaker Change: We are a customer focused business guided by the needs of our partners.

Neyland: With this in mind, we were able to execute on acquisitions that bring increased scale and breadth to our portfolio.

Neyland: Further differentiating our platform.

Neyland: In particular, enhancing our position as the global leader in servicing technology, and AI driven power demand.

Neyland: And doing so at a time when there is less funding available in the market, enabling us to secure acquisitions at good value.

Ed Bayford: The quarter was highlighted by our proposed acquisition of publicly listed Neon, which values the company at a $6.7 billion equity value and is the largest investment to date within our renewable power and transition business. We have signed an agreement to acquire 53% of the outstanding shares of the company, following closing, which is subject to customary regulatory approvals.

Neyland: The quarter was highlighted by our proposed acquisition of publicly listed Neil N, which.

Neyland: Which values the company at a $6 $7 billion of equity value.

Neyland: And is the largest investment to date within our renewable power and transmission business.

Neyland: We have signed an agreement to acquire a 53% of the outstanding shares of the company.

Neyland: Following closing, which is subject to customary regulatory approvals.

Ed Bayford: We intend to launch an all-cash tender offer for the remaining shares, which we expect we will complete in early 2025. Neoen is a business that we have closely monitored since its IPO in 2018, and we have been impressed by the pace and profitability of its growth, enabling NeoN to consistently meet ambitious targets year over year. We secured this opportunity as we were able to offer a compelling solution to the existing anchor shareholders.

Neyland: We intend to launch an all cash tender offer for the remaining shares.

Neyland: Which we expect we will complete in early 2025.

Neyland: New and is a business that we have closely monitored since their IPO in 2018.

Neyland: And we have been impressed by the pace and the profitability of that growth.

Neyland: Enabling near N to consistently meet ambitious targets year over year.

Neyland: We secured this opportunity as we were able to offer a compelling solution to the existing anchor shareholders.

Ed Bayford: Funding certainty, access to capital, and underwriting capabilities across our global team were key differentiators that enabled us to acquire, for good value, a high-quality platform that really complements our existing global footprint. NEOEN is a fully integrated pure-play renewables platform with best-in-class management and market-leading positions in each of France, Australia, and the Nordics. The company owns and operates a diversified portfolio of over 8 gigawatts of operating or under construction assets across three core technologies, solar, onshore wind, and battery energy storage. These assets are young and highly contracted through long-term off-take contracts with high-quality counterparts. Contributing Visible Cash Flows and Meaningful Downside Protection for our Investors.

Speaker Change: Funding certainty access to capital and underwriting capabilities across our global team were key differentiators that enabled us to acquire for good value a high quality platform that really complements our existing global footprint.

Ed Bayford: In addition, Neoen brings over 20 gigawatts of advanced stage development pipeline and more than 10 gigawatts of additional early stage pipeline, diversified across those same three core technologies. Nuen's growth has always been overwhelmingly organic through their leading in-house development engine, which has a strong track record of launching well over one gigawatt of new capacity into construction in each of the last few years, with enhanced access to capital and complementary capability.

Neyland: Near end is a fully integrated pure play renewables platform with best in class management and market leading positions in each of France, Australia and the Nordics.

Neyland: The company owns and operates a diversified portfolio of over eight.

Neyland: <unk> gigawatts of operating or under construction assets.

Neyland: <unk> three core technologies.

Neyland: Solar and onshore wind and battery energy storage.

Neyland: These assets are young and highly contracted through long term offtake contracts with high quality Counterparties.

Neyland: Contributing visible cash flows and meaningful downside protection on our investment.

Neyland: In addition, new and brings over 20 Gigawatts of advanced stage development pipeline.

Neyland: And more than 10 gigawatts of additional early stage pipeline.

Neyland: Diversified across those across those same three core technologies.

Neyland: <unk> growth has always been overwhelmingly organic through their leading in house development engine.

Neyland: Which has a strong track record of launching well over one gigawatt of new capacity into construction in each of the last few years.

Speaker Change: With enhanced access to capital and complementary capabilities, we intend to support and accelerate the build out of new <unk> pipeline.

Ed Bayford: We intend to support and accelerate the build-out of Neon's Pipeline, growing the annual run rate deployment to 2 gigawatts per year or more. NEOEN's core markets are some of the fastest growing for renewables globally, with strong corporate power demand and high barriers to investment. NEOEN's pipeline and development capabilities perfectly fit the growing demand we are seeing for clean energy solutions. The addition of NeoN to our portfolio immediately makes us a top player in each of its three core markets, where we can supplement the company's existing end-to-end local capabilities with our global value-add in areas such as procurement, corporate contracting, and capital marketing.

Neyland: Growing the annual run rate deployment to two gigawatts per year or more.

Neyland: <unk> core markets of some of the fastest growing for renewables globally.

Neyland: With strong corporate power demand and high barriers to entry.

Neyland: <unk> pipeline and development capabilities perfectly fit the growing demand we are seeing for clean energy solutions.

Neyland: The addition of near end to our portfolio immediately makes us a top player in each of its three core markets.

Neyland: Where we can supplement the company's existing end to end local capabilities with our global value add in areas, such as procurement corporate contracting and capital markets.

Ed Bayford: Lastly, we highlight that NEO-N is a global leader in battery storage. As Connor discussed, we are seeing a real inflection point for this technology driven by steep cost declines and its role as a key enabler of increased renewables penetration. Today, NEO-N has almost 2 gigawatts of battery storage operating or under construction, and a significant global pipeline, which will further diversify and complement our technology toolkit, allowing us to service our partners with even more complete and integrated clean energy solutions.

Neyland: Lastly, we highlight that near end is a global leader in battery storage.

Neyland: Kona discussed we are seeing a real inflection point for this technology driven by steep cost declines and its role as a key enabler of increased renewables penetration.

Speaker Change: Today Neogen has almost two gigawatts of battery storage operating or under construction and a significant global pipeline, which will further diversify and complement our technology toolkit.

Neyland: Allowing us to service our partners with even more complete and integrated clean energy solutions.

Ed Bayford: NeoN is a textbook example of the type of transaction that leverages the core competencies of our business, and we are very excited about its future prospects within our platform. With that said, I will pass it on to Wyatt to discuss our operating results and financial position.

Neyland: Neil is a textbook example of the type of transaction that Leverages. The core competencies of our business and we are very excited about its future prospects within our platform.

White: With that I'll pass it onto white to discuss our operating results and financial position.

Wyatt Hartley: Thanks, Ed. And good morning, everyone.

White: Thanks, Ed and good morning, everyone.

White: Our operating business had a strong quarter delivering record funds from operations as we benefited from our asset development.

Wyatt Hartley: Our operating business had a strong quarter delivering record funds from operations, as we benefited from our asset development, recent acquisitions, and strong All-In Price. We generated FFO of $339 million in the quarter, up 9% year over year, or $0.51 per unit. These results and our outlook for the remainder of the year have us positioned to deliver on our double-digit FFO per unit growth target. Our hydro fleet continues to benefit from strong all-in pricing in the current market, where demand for clean power is accelerating.

White: Acquisitions and strong all in pricing.

White: We generated <unk> of $339 million in the quarter up 9% year over year or 51 per unit.

Speaker Change: These results and our outlook for the remainder of the year have us positioned to deliver on our double digit <unk> per unit growth target.

Neyland: Our hydro fleet continues to benefit from strong all in pricing in the current market where demand for clean power is accelerating.

Wyatt Hartley: Our wind and solar segments benefited from recent platform additions in North America, the UK, and India, and our distributed energy, storage, and sustainable solutions segments continue to benefit from meaningful growth. West Ninos, our nuclear services business, continues to perform well, and the outlook is getting stronger. We are seeing long-term upside in the business, driven primarily by an improved outlook for the nuclear fuel business and new plant development as the only baseload carbon-free power at scale that exists with proven technology.

Neyland: Our wind and solar segments benefited from recent platform additions in North America, the UK and India, and our distributed energy storage and sustainable solutions segments continue to benefit from meaningful growth.

Speaker Change: Western he knows our nuclear services business continues to perform well and the outlook is getting stronger.

Neyland: We're seeing long term upside in the business driven primarily by an improved outlook for the nuclear fuel business and new plant development.

Neyland: Only baseload carbon free power at scale that exists with proven technologies.

Wyatt Hartley: As new nuclear generation is increasingly viewed as part of the solution to growing electricity demands both for corporate customers, including technology players, and centralized utilities, we are exceedingly well positioned to benefit, given Westinghouse's global leadership position and leading technology offerings.

Neyland: As new nuclear generation is increasingly viewed as part of the solution to growing electricity demand both for corporate customers, including technology players and centralized utilities, we are exceedingly well positioned to benefit.

Neyland: Even Westinghouse global leadership position and leading technology offering.

Wyatt Hartley: We continue to grow and advance our development pipeline, which now stands at 200 gigawatts, with 65 gigawatts of that in the advanced stage. We expect to commission approximately seven gigawatts of new capacity this year, which when completed, we expect to add approximately $90 million of annual incremental FFO. We are scaling up our development activities and expect to grow our annual commissioning capacity to approximately 10 gigawatts per annum over the next several years.

Neyland: Yeah.

Neyland: We continue to grow and advance our development pipeline, which now stands at 200, Gigawatts with 65 gigawatts of that in advanced stage.

Neyland: We expect the commission approximately seven gigawatts of new capacity this year, which when completed we expect to add approximately $90 million of annual incremental <unk>.

Neyland: We are scaling up our development activities and expect to grow our annual commission and capacity to approximately 10 gigawatts per annum over the next several years.

Wyatt Hartley: Our balance sheet remains very strong, with $4.4 billion of available liquidity to deploy in the current environment where we are seeing a significant volume of opportunities to invest at attractive risk-adjusted returns. We were successful in executing our asset recycling initiatives this quarter, signing deals generating over $400 million of proceeds on sales, or approximately $250 million net to Brookfield Renewable, representing more than a two times multiple on invested capital. We continue to see a strong market for right-sized, de-risked, operating renewable power assets and have a number of other sales in the pipeline which we are moving forward with.

Neyland: Our balance sheet remains very strong with $4 4 billion of available liquidity to deploy in the current environment, where we are seeing a significant volume of opportunities to invest at attractive risk adjusted returns.

Neyland: We were successfully executing on our asset recycling initiatives this quarter signing deals generated over $400 million of <unk>.

Neyland: Proceeds on sales or approximately $250 million net of Brookfield renewable representing more than a two times multiple on invested capital.

Neyland: We continue to see a strong market for rightsize de risked operating renewable power assets and have a number of other sales in the pipeline, which we are moving forward.

Wyatt Hartley: We expect to generate approximately $3 billion or $1.3 billion net to Brookfield Renewable in total proceeds this year from asset sales, as strong returns, and look forward to providing further updates on our activities throughout the rest of the year. During the quarter, we also took advantage of tightening spreads by executing on almost $2 billion of project-level financing. We continue to execute on opportunities to refinance project-level debt, extending maturities in what is a constructive financing market. In July, we opportunistically issued CAD$300 million of 10-year notes and CAD$100 million of 30-year notes at interest rates of approximately 4.9% and 5.4%, respectively.

Neyland: We expect to generate approximately $3 billion or $1 $3 billion net to Brookfield renewable and total proceeds this year from asset sales at strong returns and look forward to providing further updates on our activities throughout the rest of the year.

Neyland: During the quarter. We also took advantage of tightening spreads by executing on almost $2 billion of project level financing.

Neyland: We continue to execute on opportunities to refinance project level debt.

Neyland: Extending maturities and what is a constructive financing market.

Neyland: In July we Opportunistically issued $300 million Canadian dollars of 10 year notes and $100 million Canadian dollars of 30 year notes at interest rates of approximately four 9% and five 4% respectively.

Wyatt Hartley: The issuances extended our average corporate debt maturity profile beyond 12 years at an attractive cost of capital. In closing, we remain focused on delivering 12 to 15% long-term total returns for our investors by prudently deploying capital and executing on our operating initiatives. On behalf of the board and management, we thank all of our unit holders and shareholders for their ongoing support. We are excited about Brookfield Renewable's future and look forward to updating you on our progress at our Investor Day in September. 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.

Neyland: This has extended our average corporate debt maturity profile beyond 12 years at an attractive cost of capital.

Neyland: In closing, we remain focused on delivering 12% to 15% long term total return for our investors by prudently deploying capital and executing on our operating initiatives.

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

Neyland: We are excited about Brookfield renewable future and look forward to updating you on our progress at our Investor Day in September.

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.

Speaker Change: Thank you.

Operator: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To dismiss your questions, please press star 11 again. [inaudible] Our first question comes from the line of Sean Steuart of TD Towers.

Speaker Change: Your line is to ask a question. Please press star one on your telephone.

Neyland: Yeah.

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

Paul: Hello, Paul.

Neyland: Our first question comes from the line of Sean Stewart of TD Cowen.

Neyland: Your line is now open.

Sean Steuart: Thanks. Good morning, everyone. I have a couple questions.

Sean Stewart: Thanks, Good morning, everyone a couple of questions.

Wyatt Hartley: The advanced development pipeline increased to 65 gigawatts from 24 gigawatts at the end of Q1. If we factor in the incremental pipelines from NAON and some of the other acquisitions you guys referenced in the MD&A from... India, South Korea, and Australia, we'd still fall short of reconciling that revised figure. Can you give us some context on where some of that extra incremental growth and the pipeline is coming from with respect to technology and region? And it sounds like most of these incremental projects, post-2026 time frame, any sense of the timeline for those projects coming to a commercial operation?

Speaker Change: The advanced development pipeline, increasing to 65 Gigawatts from 24 Gigawatts at the end of Q1.

Speaker Change: If we factor in the incremental pipelines from the O N and some of the other acquisitions you guys referenced in the MD&A from.

Speaker Change: India, South Korea, and Australia, we'd still fall short of reconciling that revised figure can you give us some context on.

Speaker Change: Worse some of that extra incremental.

Speaker Change: Growth in the pipeline is coming from with respect to technology in region and it sounds like most of these incremental projects.

Sean Stewart: Post 2026 timeframe any.

Sean Stewart: Yes.

Speaker Change: The timeline for those projects coming to commercial operation.

Sean Stewart: Okay.

Connor Teskey: Yes, thanks, Sean. Look, I think the overall point is, as you mentioned, we are with the acquisitions in the corner. We did meaningfully increase that advanced pipeline. But we also did a finer review of the pipeline and effectively looked at how broadly the market was communicating what was an advanced stage, and then looking at per sets and what have you. And ultimately, there is also a piece of that was just defining the advanced pipeline where we have effectively a good position on securing permitting, land or site control, as well as interconnection.

Neyland: Yes, Thanks, Sean look I think the the overall point is as you mentioned.

Neyland: We are with the acquisitions in the quarter we did.

Neyland: Increased advanced pipeline, but we also did a finer review of the pipeline.

Neyland: Affectively looked at how broadly the market was communicated and what was advanced stage.

Neyland: And then looking at per sets and what have you and ultimately it was there is also a piece of that.

Neyland: Just.

Neyland: In the advanced pipeline, where we have.

Neyland: <unk> a good position on securing permitting.

Neyland: And our site control as well as the interconnection.

Connor Teskey: If we have each of those components, that's what we're including in the advanced stage. And so it was a mix of adding from acquisitions but also refining how we're categorizing it so that we are one providing our investors with a better insight into what that looks like, but also aligning it a bit better with what we're seeing in the peers in the market. But ultimately, as I mentioned during our prepared remarks today, we're looking to deliver seven gigawatts this year, and we're on track to do that.

Neyland: And if we have each of those components, that's what we're including in the advanced stages. So it was a mix of adding from acquisitions, but also.

Neyland: Refining how we're categories in categorizing it so that we are one providing our investors are better.

Neyland: Better insight into what that looks like but also aligning a bit better with what we're seeing and appears in the market, but ultimately as I mentioned during our.

Neyland: Our prepared remarks today, we're looking to deliver seven gigawatts. This year, we're on track to do that and over the next couple of years. Following that we look to kind of ramp up to be around 10, Gigawatts a year as a general run rate in a lot of that will be that advanced stage pipeline that we have projected there.

Connor Teskey: And over the next couple years, following that, we look to kind of ramp up to around 10 gigawatts a year as a general run rate, and a lot of that will be that advanced stage pipeline that we have projected.

Connor Teskey: Thanks for that, Wyatt. Connor, let's reference the BEPS strategy being led by customer needs. And to that point, do you have any updated thoughts on how flexible gas-fired power could fit into the company's midterm plans to complement the renewable platform and to meet accelerating data center power needs?

Speaker Change: Thanks for that why it.

Conor: Conor lots reference to burp strategy being led by customer needs.

Speaker Change: And to that point do you have any updated thoughts on how flexible gas fired power could fit into.

Speaker Change: The Companys midterm plans to complement the renewable platform and to meet accelerating data center power needs.

Connor Teskey: Hi Sean. Thanks for the question.

Conor: Okay.

Conor: Hi, Sean Thanks for the question.

Connor Teskey: In terms of our strategy, we would say that Q2 was very representative of what we've been doing for the last few years, which has been looking to acquire high-quality platforms in core markets that bring one advanced pipeline that we can use to service the customer demand that we are seeing today. It's not an opportunity five years from now or seven years from now, but a pipeline that we can use to service that demand today, as well as high-quality development operations in those markets that can continuously add to that pipeline and add to that development activity so we can grow our ability to service that demand going forward.

Speaker Change: In terms of our strategy.

Speaker Change: We would say that Q2 was very representative of what we've been doing for the last few years, which has been looking to acquire.

Speaker Change: High quality platforms in core markets that bring one advanced pipeline that we can use to service the customer demand that we're seeing today, it's not an opportunity for five years from now or seven years now, but pipeline that we can use to service that demand today as well.

Conor: High quality development operations in those markets that can continuously add to that pipeline and add to that development activity. So so we can grow our ability to service that demand going forward.

Connor Teskey: In terms of your question as it pertains to broad-based energy demand and what that's going to do to the electricity mix, make no mistake, given the significant electricity demands that we are seeing, this has been driven by electrification of industry, electrification of transport, this is driven by energy security, and all those factors that have been existing for years and accelerating are now being multiplied by this tech demand being driven by AI. We are absolutely going to see more gas in the electricity mix in order to service that demand.

Speaker Change: In terms of your question in asset.

Speaker Change: Pertains to broad based energy demand and what that's going to do to the electricity mix.

Conor: No mistake, given the significant electricity demands that we are seeing this has been driven by electrification of industry electrification of transport. This is driven by energy security and all those factors that have been existing for years and accelerating are now being multiplied by this tech demand.

Conor: <unk> being driven by AI.

Conor: We're absolutely going to see more.

Speaker Change: Gas in the electricity mix in order to service that demand from a Brookfield renewable perspective that is not going to be a core part of our strategy.

Connor Teskey: From a Brookfield Renewables perspective, that is not going to be a core part of our strategy. We are going to continue to focus on renewable technologies. From time to time, as we've done in the past, we might buy a broad-based portfolio that may come with an asset or two of efficient natural gas, but our focus is going to continue to be on the wind, solar, battery, and hydro generation classes.

Conor: Going to continue to focus on the renewable technologies from.

Conor: From time to time as we've done in the past we might buy a broad based portfolio that may come with an asset or two of of efficient natural gas, but our focus is going to continue to be on the wind solar battery and hydro generation classes.

Sean Steuart: Thanks for that, Connor. I appreciate the context. That's all I have for now.

Conor: Thanks for that Conor I appreciate the context, but that's all I have for now.

Operator: Thank you. Our next question comes from the line of Nelson Ng with RBC Capital Markets. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Nelson <unk> with RBC capital markets. Your line is now open.

Nelson Ng: Great, thanks. One quick question on batteries. So, just looking at your development pipeline over the years, I think solar has become a much larger part of your development pipeline, outpacing wind. And then, with your NEON pending acquisition, you'll be wrapping up battery storage. So, like, from a big picture perspective, in the next, call it five years or so, do you think your development pipeline could be mostly solar and batteries? and maybe, like, would Wynn be like a distant third?

Nelson: Great. Thanks quick question on on batteries, so just looking.

Nelson <unk>: At your development pipeline over the years I think solar has become a much larger part of your.

Speaker Change: Development pipeline outpacing wind.

Speaker Change: And then with your.

Speaker Change: Now N pending acquisition, you'll be wrapping up battery storage.

Speaker Change: So like from a big picture perspective in the next call. It five years or so do you think your development pipeline could be mostly solar and batteries and.

Conor: And maybe like wood will be like a distant third.

Connor Teskey: Hi Nelson, great question. I think your question is a very, very intelligent one.

Speaker Change: Hi, Nelson Great question I.

Nelson: I think your question is it is a very very astute one.

Speaker Change: We continue to be technology, agnostic, and we will deploy capital wherever we see the best risk adjusted returns.

Connor Teskey: We continue to be technology agnostic, and we'll deploy capital wherever we see the best risk-adjusted return. In terms of the broader market, solar is increasingly, with the cost declines it's seen, the lowest cost form of bulk electricity production in most markets. And that is why it is seeing the largest amount of growth around the world. And that's reflected in our portfolio as well. I do think you are absolutely right that the combination of solar with batteries, given the recent cost declines in batteries and the cost declines that are expected moving forward, that is going to be a very large and growing portion of, I would say, clean energy deployment going forward.

Speaker Change: In terms of the broader market.

Speaker Change: Solar is increasingly with the cost declines it seen the lowest cost form of bulk electricity production in most markets and that is why it is seeing the largest.

Conor: The amount of growth around the world and that's reflected within our portfolio as well.

Speaker Change: I do think you are absolutely right that the combination of solar with batteries.

Conor: Given the recent cost declines in batteries and the cost declines that are expected moving forward that is going to be.

Nelson <unk>: A very large and growing portion of <unk>.

Connor Teskey: That pairing right now seems to, in many markets, be the lowest cost provider. It obviously can't service all markets, but you are right, and it certainly would be part of our strategy to lean into a dynamic where solar plus batteries is one of the most prevalent low-cost solutions.

Conor: I would say clean energy deployment going forward.

Conor: <unk> pairing.

Conor: Right now seems to in many markets be the lowest cost provider. It obviously can't service all markets, but you are right and it certainly would be part of our strategy to lean into a dynamic where solaris plus batteries.

Conor: It is one of the most prevalent low cost solutions.

Nelson Ng: Thanks for the color, Connor. And then can you also elaborate on new markets and where you're seeing the opportunities? So obviously, with Neowin, you're entering France, Australia, and the Nordics in scale. You bought, I guess, a development platform in South Korea. Are there any other obvious markets to expand into?

Speaker Change: Okay. Thanks for the color and then can you also elaborate on on new markets, and where youre seeing the opportunities. So obviously.

Speaker Change: With new in your.

Speaker Change: Entering France, Australia, and the Nordics and scale.

Speaker Change: You got a I guess a development platform in South Korea.

Speaker Change: Are there any other obvious markets to expand into.

Speaker Change: Yes.

Connor Teskey: At this point, we're not actively focused on trying to enter any new markets at scale. We would like to think that we're in an incredibly unique and powerful position where we now have leading market presence in, quite comfortably, every major renewable market around the world, and this is one of the nice attributes of the NAOIN transaction, it really elegantly filled in a few holes on the map. It actually kind of filled in all the holes on the map in one transaction.

Speaker Change: At this point, we're not actively focused on trying to enter.

Speaker Change: Any new market at scale.

Speaker Change: We would like to think that we're in an incredibly unique and powerful position, where we now have leading market presence in.

Speaker Change: Quite comfortably every major renewable market around the world and this is one of the nice attributes of the <unk> transaction is it really in one deal.

Speaker Change: Gently filled in a few holes on the map it actually kind of filled in all the holes on the map in one transaction.

Connor Teskey: That being said, we will be opportunistic, and we will be driven by where we see the best risk-adjusted returns. Therefore, we could see ourselves enter a new market in the future. But if we do so, we're going to do it in the same way we've done it in the past. We're going to be very patient. We're going to be very disciplined, and we're only going to look to do so if we can secure a very attractive entry point into that new region.

Speaker Change: That being said.

Speaker Change: We will be opportunistic and we will be.

Speaker Change: Driven by where we see the best risk adjusted returns.

Speaker Change: And therefore, we could see ourselves enter a new market in the future, but if we do so we're going to do it in the same way we've done it in the past, we're going to be very patient and we're going to be very disciplined and we're only going to look to do so if we can secure a berry.

Speaker Change: Attractive value entry point into that new region, but maybe.

Connor Teskey: But maybe to summarize, I think if you wanted an indication of where we expect to grow in the future, we expect the vast majority of our growth to be within the existing regions where we already have a presence as opposed to entering new regions.

Speaker Change: Maybe to summarize I think if you wanted an indication of where we expect to grow in the future. We expect the vast majority of our growth to be within the existing regions, where we already have a presence as opposed to entering new regions.

Nelson Ng: Okay, and just to follow up on that. So just looking at your development pipeline, I think your portfolio in the APAC region has been growing very quickly. I think it's about one third of your capacity additions this year, and just look at next year, close to one half. I presume it's mostly China, India, and Australia, but can you just provide a bit more color in terms of what's driving the pace of growth for you in that region?

Speaker Change: Okay, and just a follow up on that so just looking at your development pipeline.

Speaker Change: Your portfolio in the APAC region has been growing very quickly I think it's about one third.

Speaker Change: Of your capacity additions this year and just looking at next year.

Speaker Change: It's close to one half.

Speaker Change: I presume, it's mostly China, India, and Australia, but can you just provide a bit more color in terms of what's driving the pace of growth for you in that region.

Connor Teskey: Yes, certainly. The first thing I would highlight, and we appreciate you calling this out, is really the fantastic level of growth we've been seeing on our India platform. We entered the Indian market in 2017. At that point, it was a new market for us as Brookfield Renewable, but it was a country where Brookfield had been one of the largest investors for an extended period of time at that point. We've grown that platform from our initial investment of about 300 megawatts to now being one of the top two or three renewables platforms in that country, which is obviously one of the largest and fastest growing renewables markets in the world.

Speaker Change: Yes, certainly the first thing I would highlight and we appreciate you.

Speaker Change: Calling this out is really the fantastic.

Speaker Change: Level of growth, we've been seeing out of our India platform.

Speaker Change: We entered the Indian market in 2017.

Speaker Change: At that point it was a new market for us as Brookfield renewable but it was a country where broader Brookfield had been one of the largest investors for an extended period of time at that point and we've grown that platform from our initial investment of about 300 megawatts to now we are.

Speaker Change: One of the top two or three renewables platforms.

Speaker Change: In that country, which is obviously one of the largest and fastest.

Connor Teskey: One of the things that we're very proud of what we've done in the Indian market is that we've grown very prudently at very attractive returns. And we've done so without any notable missteps. That is the bulk of the increase in development in the APAC region. The secondary complementing region within APAC is Australia, where obviously, we've done a few development assets in the last, say, 12 months, but in recent quarters through NAON and other transactions, we've had more substantive development platforms that have increased our projections for that market for the next, call it, one to three years.

Speaker Change: Growing renewables market in the world and one of the things that we're very proud of what we've done in the Indian market is we've grown very prudently at very attractive returns.

Speaker Change: And we've done so without any notable missteps.

Speaker Change: That is the bulk of the increase and development.

Speaker Change: In the.

Speaker Change: The APAC region, the secondary subtle supplementing region.

Speaker Change: Within APAC as Australia, where obviously, we've done a few development assets in the last.

Speaker Change: Say 12 months, but in recent quarters through <unk> and other transactions, we've add more substantive development platforms have.

Speaker Change: <unk> increased our projections for that market for the next call. It one to three years.

Nelson Ng: Great. Thanks for the details, Connor. I'll leave it there.

Speaker Change: That's great. Thanks for the details Carter I'll leave it there.

Operator: Thank you. Our next question comes from the line of Jessica Hoyle with Scotiabank. Your line is now open.

Speaker Change: Thank you. Our next question comes from the line of Jessica <unk> with Scotiabank. Your line is now open.

Jessica Hoyle: Morning, thanks so much for taking my question. So just to start, can you talk a little bit more about what you're seeing on the asset sales side? You reiterated your target, and it looks like you've sold some assets this quarter, which are more on the development side versus operating assets. So can you just talk about what dynamics you're seeing to sell assets?

Speaker Change: Yeah.

Jessica: Good morning, Thanks, so much for taking my question.

Jessica: So just to start can you talk a little bit more about what youre seeing on the asset sales side, you reiterated your target and it looks like you've sold some assets this quarter, which are more on the development side versus operating assets.

Speaker Change: Can you just talk to what dynamics that youre seeing just sell assets.

Jessica: Thanks Jessica.

Connor Teskey: Thanks, Jessica. Well, bear with us because we'll provide a bit of detail here, and we'll come at this from two perspectives. Similar to what we said in previous quarters, it's a little bit of a unique market right now in that, while we tend to always be both active investors as well as recyclers of capital, it's been a long time since we've seen a market where we can lean so heavily into deployment at attractive risk-adjusted returns but also see very attractive opportunities to monetize assets and sell assets at very attractive values.

Speaker Change: Bear with us because we'll provide a bit of detail here and we'll come out that from two perspectives.

Speaker Change: Similar to what we've said in previous quarters is.

Speaker Change: It's a little bit of a unique market right now.

Speaker Change: In that.

Speaker Change: Well, we tend to always be both active investors as well as recyclers of capital.

Speaker Change: It's been a long time since we've seen a market where we can.

Speaker Change: Lean so heavily into deployments at attractive risk adjusted returns, but also seemed very attractive opportunities to monetize assets sell assets at very attractive values and this might be a broad over simplification, but what we would say is increasingly around the <unk>.

Connor Teskey: This might be a broad oversimplification, but what we would say is that increasingly around the world, due to the growth in the sector, there are huge capital needs. And in situations where you are investing in platforms or businesses that are going to require significant capital going forward, there is still lots of opportunity to invest for value at very attractive entry points. And that's certainly where we've been focused on that side of the equation.

Speaker Change: World.

Speaker Change: Due to the growth in this sector there are huge capital needs.

Speaker Change: And in situations, where you are investing in platforms or businesses that are going to require significant capital going forward. There are still lots of opportunity to invest for value at very attractive value entry points and Thats, certainly where we've been focused on that side of the equation.

Connor Teskey: Similarly, however, with the stabilization and now decline in interest rates, with banks increasing their lending appetite, and with the return of what I would call the strategic bid to the market, we are seeing very robust demand for high quality cash-generative assets or platforms that have a growth angle to them. And that is where we are really seeing opportunities to monetize assets at attractive returns. In terms of the comment about us holding our forecast for the year in terms of asset recycling, we are... somewhat understanding of the skepticism.

Speaker Change: Similarly, however, with the stabilization and now decline in interest rates.

Speaker Change: Banks, increasing their lending appetite with the return of what I would call the strategic bid to the market. We are seeing very robust demand for high quality cash generative assets or platforms that have a growth angle to them and that is where we are really seeing the.

Speaker Change: Opportunities to monetize assets at attractive returns.

Speaker Change: In terms of.

Speaker Change: The comment about us.

Speaker Change: As holding our forecast for the year in terms of asset recycling.

Speaker Change: We are.

Connor Teskey: How can you invest for value and monetize for value in the same market? That being said, we're very confident that we're going to demonstrate that through transactions in the back half of the year. And I would say starting in the very, very short term, we have a number of advanced sales processes that we expect to come to fruition in the next two or three months that I think are going to demonstrate that dynamic. And given the demand we've seen in those processes, that's what gives us such comfort to reinforce our expectation around asset monetization for 2024.

Speaker Change: Understanding of the skepticism how can you invest for value and monetize for value in the same market that being said.

Speaker Change: We're very confident that we're going to demonstrate that through transactions.

Speaker Change: In the back half of the year and I would say starting in the very very short to near term here. We have a number of advanced sales processes that we expect to come to fruition in the next.

Speaker Change: Two or three months that I think are going to demonstrate that dynamic and given the demand we've seen in those processes. That's what gives us comfort to reinforce.

Speaker Change: Our expectation around asset monetization for 2024.

Connor Teskey: I appreciate the detail there. And then, just moving on, can you provide more color on discussions with technology companies or even other companies that are interested in signing a framework similar to that of the Microsoft deal? Just what are you seeing on this front? Is there more and more interest coming your way?

Speaker Change: I.

Speaker Change: Get the detail there and then just moving on can you provide some more color on discussions with technology companies or even other companies that are interested in signing a framework similar to that of the Microsoft deal. Just what are you seeing them on.

Speaker Change: On this front is there more and more interest coming your way.

Speaker Change: Okay.

Connor Teskey: We like the way you framed the question. The answer there is yes. There is no doubt around the world...

Speaker Change: We like the way you framed the question the answer there is yes.

Speaker Change: There is no doubt.

Speaker Change: Around the world.

Connor Teskey: It's important to recognize that the demand for renewables has grown exponentially in recent years, not because renewables are clean, but rather because renewables are the cheapest form of electricity. And increasingly, around the world, electricity demand is growing and is forecasted to grow at a more rapid rate for the next 20 years than at any point in the last 20 years. And essentially, what we are a provider of is the lowest cost form of a commodity that the market is increasingly short of.

Speaker Change: It is important to recognize that the demand for renewables has grown exponentially in recent years not.

Speaker Change: Because renewables are clean, but rather because renewables are the cheapest form of electricity and increasingly around the world electricity demand is growing and is forecasted to grow at a more rapid rate for the next 20 years than at any point in the last 20 years.

Speaker Change: And essentially what what we are a provider of is the lowest cost.

Speaker Change: We are a provider of the lowest cost form of a commodity that the market is increasingly short up so whether it's the large tech companies or other commercial or industrial users. We are increasingly seeing the largest corporate buyers of power reach out to look to see can we either do it on an asset by asked.

Connor Teskey: So whether it's the large tech companies or other commercial or industrial users, we are increasingly seeing the largest corporate buyers of power reach out to see if they can either do it on an asset by asset deal, or can we enter into some sort of broader framework arrangement to de-risk their business plans and their power needs in the short to medium, or, in some cases, even long term. No doubt, one of the biggest impacts we've seen out of the announcement of the Microsoft transaction was simply the inbounds we've received from other corporates looking to do similar types of arrangements.

Speaker Change: That deal or can we enter into some sort of broader framework arrangement to de risk their business plans and their power needs.

Speaker Change: In the short to medium or in some cases, even long term.

Speaker Change: No doubt one of the biggest impacts we've seen out of the announcement of the Microsoft transaction, which simply the inbounds. We've received from other corporates looking to do similar type arrangements.

Speaker Change: Yeah.

Speaker Change: Thanks very much.

Operator: Thank you. Our next question comes from Rupert Merer with National Bank. Your line is now open.

Speaker Change: Thank you. Our next question comes from Robert Mirror with National Bank. Your line is now open.

Rupert Merer: Hi, good morning everyone. Thanks for taking the questions. I'll start with NEO.

Speaker Change: Yes.

Robert Mirror: Hi, good morning, everyone.

Connor Teskey: And I understand the acquisition faces a competition review in Australia. What's the outlook there? What might you need to do to get the deal over the line? And I see you've also acquired an interest in the development platform in Australia. Can you give us a little color on that and how it fits into the overall plan?

Robert Mirror: Thanks for taking my questions.

Speaker Change: Start with Neil and I understand the acquisition faces a competition review in Australia.

Speaker Change: What's the outlook, there or what might you need to do to get the.

Speaker Change: Deals over the line and I see you have also acquired an interest in a development platform in Australia.

Speaker Change: Can you give us a little color on that and how it fits into the overall plan.

Connor Teskey: Certainly. So on NAOEN, this is a very large transaction for a business that operates in many regions around the world. It is subject to typical approvals in a number of jurisdictions. We are aware, due to Brookfield's existing interest in other assets in Australia, and due to experiences we've had in past transactions, we knew that there was the potential. It is yet to be confirmed, but there was the potential for us to need to undertake certain measures in order to achieve that approval.

Speaker Change: Certainly so so on.

Speaker Change: Now N.

Speaker Change: This is a very large transaction.

Speaker Change: For a business that operates in many regions around the world. It is subject to typical.

Speaker Change: Approvals in a number of jurisdictions.

Brookfield: We are aware due to Brookfield.

Brookfield: Existing interests.

Brookfield: In other assets in Australia due to experiences we've had on past transactions.

Brookfield: We knew that there was the potential it has yet to be confirmed but there was the potential.

Brookfield: For.

Speaker Change: Us to need to undertake.

Brookfield: Certain.

Connor Teskey: We are working through that process. It is something that was very well known to us at the time of the transaction, and we are very well prepared to deal with it. It's an ongoing process, and we'll have to see how it goes from here, but it's nothing surprising to us. The other point in terms of the other acquisition in Australia, this is a transaction called Windlab. It is a developer in the country that operates in different provinces of Australia than NAOEN does, so there's no overlap in the business models. And similar to our other transactions, this one is working through an approval process before we can close it.

Brookfield: Measures in order to achieve that approval, we are working through that process. It is something that was very known to us at the time of the transaction and we are very well prepared to deal with it but it's an ongoing process and we'll have to see how it goes from here, but it's nothing surprising to us.

Speaker Change: The other point in terms of the other acquisition in Australia.

Speaker Change: This is a a transaction called wind lab.

Speaker Change: It is a developer in the country that operates in different provinces of Australia, then nail and does so there's no overlap in the business models and.

Brookfield: And similar.

Speaker Change: Our other transactions that is working through an approval process before we can close it.

Rupert Merer: Okay, excellent. Thanks. Thanks for the color.

Speaker Change: Okay excellent. Thanks, thanks for the color.

Speaker Change: Secondly, PJM auction you highlighted.

Connor Teskey: Secondly, the PJM Auction. You highlighted the attractive results of that auction. Can you give us an update on your exposure to that auction and maybe some color on your contract activities in that region? And what's the upside to BEP from that recent auction?

Speaker Change: It's attractive results that auction can you give us an update on your exposure to that auction and maybe some color on your contract activities in that region and what's the what's the upside to Tibet from.

Speaker Change: Some of the recent auction.

Wyatt Hartley: Certainly, so I'll start and Wyatt, if you want to follow up with any of the specifics, please, please feel free to jump in. PJM has been a, I would say, a very representative sub-market of what we've been trying to do for the last several years. We often talk at a larger scale about focusing on countries and markets where we're seeing growing electricity demand. For a number of years, PJM has been identified as one of the highest concentrations of data center and technology company energy demand growth.

Speaker Change: Certainly so I'll start and why it if you want to follow up with any of the specifics. Please please feel free to jump in.

Speaker Change: PJM has been a I would say.

Speaker Change: A very representative sub market of what we've been trying to do for the last several years.

Speaker Change: We often talk in larger scale about focusing on countries and markets, where we're seeing growing electricity demand for a number of years PJM has been identified as one of the <unk>.

Speaker Change: <unk> concentrations of data center and technology company.

Speaker Change: <unk> demand growth.

Wyatt Hartley: We are extremely fortunate with our position in that market. We have hydro, we have wind, we have solar, and we have exceedingly large positions in that market, particularly due to some transactions we did a few years ago before the growing electricity demand was perhaps as readily apparent to the market. The most notable being our urban grid transaction in late 2020 or early 2021 that really focused on a high-quality development pipeline in PJM of projects that had very advanced interconnection queue positions.

Speaker Change: We are extremely fortunate.

Speaker Change: With our position in that market.

Speaker Change: Have hydro we have wind we have solar and we are exceedingly large positions in that market.

Speaker Change: Particularly due to some transactions we did.

Speaker Change: A few years ago before the the growing electricity demand was.

Speaker Change: Perhaps is readily apparent to the market. The most notable being our urban grid transaction.

Speaker Change: In late 2020 early 2021 that really focused on a high quality development pipeline in PJM.

Speaker Change: Projects that had very advanced.

Wyatt Hartley: So, the growth in that market has been a very strong tailwind for us. I would say that the recent capacity auctions were expected to be good, but this was probably a positive surprise to even our expectations. But in terms of the impact on our business, I would say that this is going to be a very nice tailwind over the next several years. Wyatt, is there anything you'd add to that?

Speaker Change: Interconnection queue positions so.

Speaker Change: The growth in that market.

Speaker Change: Has been.

Speaker Change: A very strong tailwind for us.

Speaker Change: I would say that the recent capacity auctions, we expected them to be good. This was probably a positive surprise to even our expectations, but in terms of the impact on our business.

Speaker Change: I would say that this is going to be a very nice tailwind over the next several years why it is there anything you'd add to that.

Connor Teskey: Yeah, Rupert, just to put a finer point on the numbers to your question, the impact on our overall business from the, you know, year on year from where capacity is priced is roughly $50 to $60 million. Now we own roughly a third of those assets, so the aggregate impact kind of versus the prior year is around $20 to $25 million of additional revenue.

Speaker Change: Yes.

Speaker Change: Just to put a finer point on the numbers to your question is the.

Speaker Change: The impact to our overall business from the year on year from where capacity is pricing is roughly $50 million to $60 million now we own roughly a third of those assets. So the aggregate impact kind of versus the prior year is around 20% to $25 million.

Speaker Change: Additional revenue.

Rupert Merer: Excellent. Thank you very much. Appreciate it. Thank you. Our next question comes from the line of Moses Sutton with BNP Paribas. Your line is now open. Thanks for taking my question. Any thoughts on

Speaker Change: Excellent. Thank you very much I appreciate the color.

Operator: Thank you. Our next question comes from the line of Moses Sutton with BNP Paribas. Your line is now open. Thanks for taking my question.

Speaker Change: Thank you. Our next question comes from the line of Moses Sutton with BNP Paribas. Your line is now open.

Moses Sutton: Thanks for taking my question.

Moses Sutton: Any thoughts on potentially expanding deeper into distributed generation, so perhaps ready solar I'm thinking there's a big market. There went through a lot of turbulence is undercapitalized.

Speaker Change: Undercapitalized players great subsidies as exposure to the retail power inflation in my mind, it seems to fit the Brookfield ability to step in as a provider of needed capital in the market that have longer term tailwind.

Connor Teskey: Hi Moses. We're getting a lot of questions these days on two markets where we historically have been very cautious. One is offshore wind development, and the other is Resi DG. These have been markets that have grown very, very quickly in recent years. But when we looked at the investment opportunities in those markets, despite the huge growth trajectory, we struggled to find entry points that we thought were attractive on a risk-adjusted return basis. On offshore, we've been very cautious in that space with only a modest exposure.

Moses Sutton: Hi, Moses.

Speaker Change: Sure.

Speaker Change: We are getting a lot of questions. These days on two markets, where we historically have been.

Moses Sutton: Im very cautious one is offshore wind development and the other is a resume D G.

Speaker Change: These have been markets that have grown.

Moses Sutton: Very very quickly in recent years.

Moses Sutton: But but when we looked at the investment opportunities in those markets.

Moses Sutton: Despite that the huge growth trajectory, we struggled to find entry points that we thought were attractive on a risk adjusted return basis.

Moses Sutton: On offshore we've been very cautious in that space with only a modest exposure and then within D. G.

Connor Teskey: And then within DG, we are very large players in that space, but we focus entirely on commercial and industrial as opposed to residential. We do think we are one of the largest players in that space, certainly in the US, if not globally. But we just found a more attractive value proposition in CNI versus Resi. In terms of where things go from here, to be clear, just because we haven't done something in the past doesn't mean we won't do it in the future.

Speaker Change: We are very large players in that space, but we focused entirely on commercial and industrial as opposed to residential.

Moses Sutton: Do think we are one of the largest players in that space certainly in the U S. If not globally.

Moses Sutton: But we just found a more attractive value proposition and in C&I versus Ramsey.

Moses Sutton: In terms of where things go from here.

Moses Sutton: To be clear.

Moses Sutton: Just because we haven't done something in the past doesn't mean, we won't do it in the future and with some of the settling out that has happened in both those markets.

Connor Teskey: And with some of the settling out that has happened in both those markets, both offshore and RESi DG, I would certainly say that we are probably closer to entry points that we view as attractive today than we have been at points in the past. But the comments that you're making about Res-EDG, I think they would apply equally importantly, if not on a bigger scale, to offshore wind as well.

Moses Sutton: Both offshore.

Moses Sutton: <unk> D G.

Moses Sutton: Yes.

Speaker Change: I would certainly say that we're probably closer to entry point that we view as attractive today than we have been at points in the past.

Moses Sutton: But but the comments that you're making about <unk> D. G. I think they would apply.

Moses Sutton: Equally importantly, if not on a bigger scale to offshore wind as well.

Speaker Change: Excellent. Thank you.

Speaker Change: Thank you.

Operator: Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open.

Moses Sutton: Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open.

Mark Jarvi: Thanks. Good morning, everyone.

Mark Jarvi: Hey, Thanks, good morning, everyone Hum.

Connor Teskey: Would there be an appetite or capacity to do a larger M&A deal until NAOIN is completed? Or do you need to see that deal completed and maybe get a couple of the asset sales over the finish line before you'd act on something substantial?

Mark Jarvi: Would there be an appetite or a capacity to do a larger M&A deal with.

Speaker Change: Till now once completed.

Speaker Change: Or do you need to see that deal completed and maybe get a couple of the asset sales over the finish line before you Act on something substantial.

Connor Teskey: I would say there's certainly an appetite to do a larger transaction. But I would come at this from two different perspectives.

Speaker Change: I would say there.

Speaker Change: Certainly appetite to do a larger transaction.

Speaker Change: We.

Speaker Change: I'd come out that's from two different perspectives. One is our funding plan is in great shape right now.

Connor Teskey: One is that our funding plan is in great shape right now. The benefit of having such a strong credit rating on such a fortress balance sheet is that if we do see an influx of attractive large-scale acquisitions, we always want to be in a position to execute those no matter when they arise. I would say we're well-positioned to do that should such an opportunity pop up today. And then, secondly, in terms of asset sales, the nature of asset sales, when it comes to us deploying capital, it tends to be very opportunistic.

Speaker Change: This is the benefit of having such a.

Speaker Change: Our strong credit rating and in such a fortress balance sheet is if we do see an influx of attractive large scale acquisitions.

Speaker Change: We always want to be in a position to execute those no matter when they arrive and I would say, we're well positioned to do that should such an opportunity pop up.

Speaker Change: Today so.

Speaker Change: And then secondly.

Speaker Change: In terms of the asset sales.

Speaker Change: The nature of asset sales is when it comes to us deploying capital it tends to be very opportunistic.

Connor Teskey: It tends to be a little bit subject to what the market gives us. But when it comes to executing asset sales, there is somewhat of a lead time. We run auction sales processes, and these often take a number of months or a number of quarters to execute. Based on where we sit today, we've initiated a number of those processes in the past. Therefore, we're going to see them flow through to fruition starting in the coming quarters and rolling forward. I would say, even if the timing of the next investment and specific asset sales doesn't line up perfectly, we're very comfortable with the totality of our funding plan over the

Speaker Change: It tends to be a little bit subject to what the market gives us but when it comes to executing asset sales. There is somewhat of a lead time, we run auction sales processes needs. These often take a number of months or a number of quarters to execute.

Speaker Change: Based on where we sit today, we've initiated a number of those processes in the past and therefore, we're going to see them flow through to fruition.

Speaker Change: Starting in the coming quarters enrolling forward I would say, even if the timing of the next investment and specific asset sales don't line up perfectly we're very comfortable.

Speaker Change: In the totality of our funding plan over the next 12 to 24 36 months and there is lots of capacity for growth.

Mark Jarvi: Got it. And then I know you said it's still a good spot for being able to buy and sell. Just curious how the decline in interest rates and tight credit spreads are playing into the M&A activity and, particularly, the interest in medium to larger-sized deals. Are you seeing a few more people show up in those processes, and access to capital expand a little bit here over the last couple of months? Yeah, absolutely. There's no question about that.

Speaker Change: Got it and then I know you said, there's still a good spot for being able to buy and sell just curious how you think the decline in interest rates and tight credit spreads are playing into the M&A activity I am, particularly the interest in medium to larger size deals are you seeing a few more people show up in those processes.

Speaker Change: As to capital will expand a little bit here over the last 12 months.

Connor Teskey: We've, we've, we've noticed four things in the market. We would say the market really turned at the beginning of the year, and it's only accelerated since then. The four things that we think were driving that market, and this will tie back to your comment on interest rates, were at the beginning of the year, interest rates had stabilized, weren't going down, but they stopped going up. That was driver number one.

Speaker Change: Absolutely.

Speaker Change: No question.

Speaker Change: We've we've.

Connor Teskey: Driver two was banks increasing their lending appetites, and driver three was we were beginning to see the strategic bid for these assets return to the markets that, for a period of time, had been dominated by the financial bid. And then, number four, as we turned into the calendar year of 2024, I would say across both the institutional and strategic markets, we'd seen allocations to renewables increase. Those four things have only accelerated throughout the year, but the one tying back to your question, now we're in a period where rates have not only stabilized, they're actually beginning to decline.

Speaker Change: Noticed for things in the market and we would say the market really turned.

Speaker Change: At the beginning of the year and it's only accelerated since then the four things that we think we are driving that market and this will tie back to your comment on interest rates with at the beginning of the year interest rates had stabilized.

Speaker Change: They werent going down, but they stopped going up that that was driver one driver to with bank, we're increasing their lending appetite driver. Three was we were beginning to see the strategic bid for these assets returned to the market that for a period of time had been dominated by the financial bid and then number four.

Speaker Change: As we turned into the calendar year of 2020 for I would say across both the institutional and strategic markets, we've seen our allocations to renewables increase.

Speaker Change: Those four things have only accelerated throughout the year, but the one.

Speaker Change: Tying back to your question now we're in a period where rates have not only stabilized. They are actually beginning to decline. So we would think that would just be additive to the.

Connor Teskey: So we would think that would just be additive to the market and demand for, what we call, high quality, de-risked assets and platforms. And maybe taking a bit of a short-term view here, I think why you said in your comments about the ability to hit 10% FFO per unit growth. Given where you are at the mid-year and how resources have played out this year on your portfolio, is that still something you can achieve, or is that more of a normalized basis in terms of hitting 10% FFO per unit growth this year?

Speaker Change: The market and demand for call it high quality de risked.

Speaker Change: Assets and platforms.

Speaker Change: Got it.

Speaker Change: Maybe taking a bit of a short term view here I think why you said the column in your comments about the ability to hit 10% <unk> per unit growth just given where you are at the midyear and how resources are played out this year on your on your portfolio is that still something you can achieve or would that be more of a normalized basis in terms of hitting 10% <unk> per unit growth this year.

Connor Teskey: So I'll start, and Wyatt, if you want to jump in. We expect to achieve it this year. And, obviously, there's half a year to go. But based on what we're seeing, we do believe it is achievable. There's one.

Speaker Change: So I'll start and why it if you want to jump in.

Speaker Change: We expect to achieve it this year.

Speaker Change: Here.

Speaker Change:

Speaker Change: And obviously there is half a year to go.

Speaker Change: But based on what we're seeing we do believe it is achievable.

Speaker Change: There is one.

Connor Teskey: There's one almost nuance about our RQ2 numbers that is probably worth noting, which is our business in Colombia, Isagen, which is a tremendous business for us that produces very consistently. It's a large hydro business. It is a very consistent performer for us. It came at the end of a very strong and unique El Nino in Q2. And at the end of that El Nino season, the whole system in Colombia essentially got caught a little bit short on hydrology.

Speaker Change: Theres, one almost nuanced about our Q2 numbers that.

Speaker Change: It's probably worth, noting which is our business in Colombia, which is a tremendous business for us.

Speaker Change: That produces.

Speaker Change: Very consistently it's a large hydro business.

Speaker Change: It is a very consistent performer for us.

Speaker Change: It came to the end of a very strong and unique El Nino.

Speaker Change: In Q2 and at the end of that El Nino season.

Speaker Change: The whole system in Colombia, essentially got caught a little bit short on hydrology ethane actually far outperformed the broader system, but because of that our Q2 results for that business.

Connor Teskey: Isagen actually far outperformed the broader system, but because of that, our Q2 results for that business were a little bit substandard versus what we've come to expect. But the reality of that dynamic is because Isagen has outperformed the broader system so much, now that that El Nino dynamic is behind it, it has better hydrology than the broader system, and we're going into a period of moderately higher prices. We're expecting Isagen to catch up with a lot of that and still have potentially a record year in 2024.

Speaker Change: We're a little bit.

Speaker Change: Sub standard versus what we've come to expect but the reality of that dynamic is because <unk> has outperformed the broader system. So much now that El Nino dynamic is behind it it has better hydrology than the broader system and we're going into a period of moderately higher prices.

Speaker Change: We're expecting it to him to catch up a lot of that and still have potentially a record year. In 2024, so that that was a little bit of a nuance in our Q2 numbers that we expect to unwind throughout the remainder of the year and then just the growth.

Connor Teskey: So that was a little bit of a nuance in our Q2 numbers that we expect to unwind throughout the remainder of the year. And then just the growth and performance of our business, we see a path to 10%. Great. Thanks for your time today.

Speaker Change: And performance of our business, we see a path to 10%.

Speaker Change: Great. Thanks for the time today.

Speaker Change: Okay.

Operator: Thank you. Our next question comes from the line of Mark Strauss with J.P. Morgan. Your line is now open.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Mark Strouse with Jpmorgan. Your line is now open.

Mark Strauss: Yes, good morning. Thank you very much for taking our questions. Congratulations on all the activity this quarter. I just wanted to go back to some questions on the advanced stage pipeline. So appreciating what you said about kind of risk-adjusted returns, just looking at the big jumps that you had in your advanced stage pipeline from the deals. If those deals are relatively more de-risked because of that pipeline, is it fair to say that the near-term or maybe medium-term accretion from those deals is, I mean, how should we compare the accretion compared to some of your historical deals?

Mark Strouse: Yes. Good morning, Thank you very much for taking our questions.

Speaker Change: Congrats on all the activity this quarter I just wanted to go back to.

Speaker Change: Just some questions on the advanced stage pipeline. So appreciating what you said about kind of risk adjusted returns.

Speaker Change: Just looking at the Big jump that you had in your advanced stage pipeline from the from the deals.

Speaker Change: If those deals are relatively more derisked because of that pipeline is it fair to say that.

Speaker Change: The near term or maybe medium term accretion from those deals.

Speaker Change: <unk>.

Speaker Change: How should we compare the accretion compared to some of your historical deals.

Speaker Change: Sure so.

Connor Teskey: Sure. Maybe we can get away from the specifics of these individual deals. Where we typically see the highest near-term accretion is when we buy into operating portfolios. Those typically are the transactions that provide the greatest amount of near-term accretion to our numbers. But it should be recognized that typically, when you're buying a high-quality, de-risked portfolio of operating assets, that's probably the type of transaction that's going to be at the lower end of our target return range.

Speaker Change: Maybe getting away from the specifics of them.

Speaker Change: These individual deals.

Speaker Change: Where we typically see the highest near term accretion is when we buy into operating portfolio are those.

Speaker Change: Those typically are the transactions.

Speaker Change: That provide the greatest amount of near term accretion.

Speaker Change: To our numbers, but it should be recognized that typically when you are buying a high quality derisked portfolio of operating assets that that's probably the type of transaction that's going to be at the lower end of our target return range. When we buy into a developer obviously, we're going to put some dollars in the ground.

Connor Teskey: When we buy into a developer, obviously, we're going to put some dollars in the ground there that might not become income-producing for a period of time, and therefore, it drives less near-term accretion. But over the whole of that investment, given the development exposure, we would certainly underwrite and expect those types of invested capital dollars to deliver a high-end or above-target return IRR over the life of the investment. If you take those two points of the spectrum and begin to look at the deals that we've done this quarter, and I'll use NEOEN as an example, that's probably cherry picking because it's kind of the big, prominent one, but the incredible thing about NEOEN is it's kind of the best of both worlds.

Speaker Change: There that that might not become income producing for a period of time and therefore, it drives less near term accretion, but over the whole of the bad investment given the development exposure, we would certainly underwrite and expect that those types of of.

Speaker Change: Invested capital dollars to deliver a high end or above target return IRR over the life of the investment if you take those two points of the spectrum and begin to look at the deals that we've done.

Speaker Change: This quarter and I'll use <unk> as an example, that's probably cherry picking because it it's kind of the big prominent one but the incredible thing about now and if it is kind of the best of both worlds.

Connor Teskey: It comes with eight gigawatts of operating or under construction assets that will be immediately additive to FFO, but it also comes with a development engine that today is producing about one gigawatt per year that we think can be accelerated to north of two gigawatts. So in terms of the deals we've done this quarter that have dominated that, call it, one billion net equity deployment to Brookfield Renewable, I would say, on a scale, they're probably a halfway house between buying operating portfolios and buying development portfolios because the largest transactions we've done this quarter have both.

Speaker Change: It comes with eight gigawatts of operating or under constructed under construction assets that will be immediately additive to <unk>, but it also comes with our development engine that today is producing about one gigawatt per year that we think can be accelerated.

Speaker Change: North of two Gigawatts so.

Speaker Change: In terms of.

Speaker Change: The deals we've done this quarter that have dominated that call. It 1 billion.

Speaker Change: Net.

Speaker Change: Equity deployment to Brookfield renewable I would say on mass there probably a halfway house between.

Speaker Change: Buying operating portfolios and buying development portfolios because the largest transactions. We've done this quarter have have both.

Connor Teskey: Okay, very helpful. Makes sense. Thank you. Thank you. Our next question comes from the line of Anthony Crowdell. Mizuho, Yerlana Snow, Hey, good morning, team. I just wanted to follow up, I think, on Rupert and Jessica's question. It was a little about whether you're a buyer or a seller in this.

Speaker Change: Okay very helpful makes sense. Thank you.

Operator: Thank you. Our next question comes from the line of Anthony Crowdell with Mizuho. Your line is now open. Hey, hey, good morning team. I just wanted to follow.

Anthony <unk>: Thank you. Our next question comes from the line of Anthony <unk> with Mizuho. Your line is now open.

Anthony: Hey, good morning team I just wanted to follow up I think on route Burton Jessica's question Theres, a little about whether you are a buyer or seller and it's dramatic but it was more focused on I guess, the PJM capacity auction.

Speaker Change: We go back maybe 10 15 years, we had another bullish signals on the prices.

Speaker Change: Very quickly whether the rules changed or we got a response and building capacity prices really been prominent I mean do you think this time is different and we get a sustained level of high capacity pricing in that market.

Anthony Crowdell: Thanks, Anthony. It's a good question. I don't think we have a crystal ball to forecast the future here. The one thing that I would say that is going to be very different about this cycle, if I could position it that way, versus what we saw is that from the period of, let's say, 25 years ago until two years ago, electricity demand was essentially flat in many markets. And therefore, when you saw, call it, one or two-year anomalies, that was over an extended period of flat electricity demand. And therefore, those anomalies were driven by, call it, very short-term discrete events that could unwind quickly.

Speaker Change: Thanks, Anthony it's a good question.

Speaker Change: I don't think.

Speaker Change: We have a crystal ball to forecast the future here. The one thing that I would say that is going to be very different about this cycle.

Speaker Change: And if I could position it that way versus what we saw is from the period of lets say 25 years ago until two years ago electricity demand was essentially flat in many markets and therefore when you saw.

Speaker Change: Call it one or two year anomalies that was over an extended period of flat electricity demand and therefore, those anomalies were driven by call. It very short term discreet events that could unwind quick.

Speaker Change: Quickly.

Speaker Change: The different dynamic that we're stepping into for the next 20 years is this going to be one of very sustained increases in electricity demand.

Speaker Change: <unk>.

Speaker Change: Can we sit here and predict with any level of accuracy, where capacity prices well will come in.

Speaker Change: And the next auction or the auction after that no but do we do we think the fundamentals are.

Connor Teskey: But do we think the fundamentals are robust and would drive a more sustained higher price environment? Absolutely, yes. And that's simply because there is more demand than there is supply this time. And it's expected to stay that way for a while.

Speaker Change: Robust and would drive a more sustained higher price environment, absolutely, yes, and thats simply because there is more demand than there is supply this time.

Speaker Change: And it is expected to stay that way for awhile.

Anthony Crowdell: Great, that's all I had. Congratulations on a good quarter. Thank you. Our next question comes from the line of William Grippen with UBS. Your line is now open.

Speaker Change: Great Thats, all I had congrats on a good quarter.

Operator: Thank you. Our next question comes from the line of William Grippen with UBS. Your line is now open.

Speaker Change: Thank you.

William <unk>: Our next question comes from the line of William <unk> with UBS. Your line is now open.

Speaker Change: Okay.

William <unk>: Great. Thanks, everybody I appreciate you squeezing me in I'll, just keep it to one here.

William <unk>: Just curious on the wind and solar portfolio as we saw a pretty meaningful step down year on year and the average price per megawatt hour are you able to elaborate on some of those drivers underlying that change in.

Speaker Change: Legacy PPA roll offs or more of a geographic mix.

William Grippen: Yeah, thanks for the question, Will. Look, there's two primary drivers, the first being that, as you likely know, that a good portion of that portfolio that we own is owned in Spain. It is under a regulated regime. And, you know, ultimately, there is a regulatory price that is a reference to a market price, and it's adjusted accordingly. And so the market price in Spain, year on year, did come down.

Speaker Change: Yeah. Thanks.

Speaker Change: Thanks for the question look there's two primary drivers.

Speaker Change: The first being that.

Speaker Change: As you likely know that.

Speaker Change: A good portion of that portfolio that we own is owned in Spain. It is under a regulated Roe.

Speaker Change: <unk>.

Speaker Change: And ultimately there is a.

Speaker Change: Regulatory price.

Speaker Change: A reference to a market price and its adjusted accordingly, and so the market price in Spain year on year did come down now and that meant that in the current period were recognizing less revenue, but given the regulatory construct of those assets.

William Grippen: Now, and this meant that in the current period, we were recognizing less revenue. But given the regulatory construct of those assets, it has no impact on the return from those underlying assets. So it's really just a regulatory impact. And then the second piece is, look, as we have grown the business, both through development and acquisition, the average price of the assets we're building or acquiring has been lower than our historical fleet. And that's just representative of that in an environment where wind and solar costs have come down, that the price you need, in terms of revenue, the PPA price to earn a similar return has come down as well.

Speaker Change: It has no impact on the return from those underlying assets. So it's really just.

Speaker Change: A regulatory impact.

Speaker Change: Then the second piece is as.

Speaker Change: As we have grown the business both through development acquisition the average price is.

Speaker Change: The assets were building or acquiring was lower than our historical fleet and Thats just representative of that in an environment, where wind and solar costs are coming down that the price you need in terms of revenue.

PPA price to earn a similar return has come down as well. So it's really just a combination of that regulatory piece in Spain, which again has no impact on return and then just the fact that as wind and solar has become more affordable that the price, we're realizing but earn an equal return on our growth is coming down as well.

William Grippen: So it's really just a combination of that regulatory piece in Spain, which again, has no impact on return. And then just the fact that as wind and solar have become more affordable, the price we're realizing for earning an equal return on our growth is coming down as well.

Speaker Change: Alright, I appreciate the color I'll leave it there.

Connor Teskey: Thank you. I would now like to turn the call back over to Connor Teskey for closing remarks.

Speaker Change: Thank you I would now like to turn the call back over to Conor Tusky for closing remarks.

Connor Teskey: Great, thank you everyone for your participation in today's call and your interest and support of Brookfield Renewable. We look forward to not only providing an update on next quarter's earnings but also at our investment day during the third week of September. Thank you, and have a great day. Cheers, bye.

Conor Tusky: Great. Thank you everyone for your participation in today's call and your interest and support of Brookfield renewable.

Speaker Change: We look forward to not only providing an update on at next quarter's earnings but also.

Speaker Change: At our investment day during the third week of September. Thank you and have a great day bye.

Dustin: Thank you Dustin.

Speaker Change: Does concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.

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