The world economy’s decarbonization continues to accelerate. To mitigate the effects of climate change, a growing number of nations and businesses are looking for lower-carbon energy options. They’re also looking to lower-carbon energy for power security and to help mitigate the effects of rising commodities prices.
Brookfield Renewable will benefit greatly from these catalysts. They contributed to the company’s strong first-quarter earnings while also enhancing its long-term growth potential.
In the first quarter, Brookfield Renewable produced $292 million in normalized FFO (funds from operations), or $0.45 per share, up 18 percent on a per-share basis. Strong asset availability, increasing power pricing, and recent acquisitions helped the company.
The hydropower operations of the corporation continue to produce consistent results. Hydroelectric power prices are rising as demand for dependable carbon-free baseload electricity grows, particularly as additional intermittent renewable energy sources are added to the power system. Brookfield is able to secure favorable long-term deals for its hydro assets as a result of this. Nevertheless, its wind and solar businesses are doing well. They also produce predictable cash flows guaranteed by long-term contracts.
Finally, the firm’s distributed generation (i.e., power generated close to end customers, such as rooftop solar), storage, and other areas are growing in importance. Brookfield is helping an increasing number of industrial and commercial customers reach their decarbonization goals. Meanwhile, storage is critical in tackling renewables’ intermittency, giving Brookfield the ability to stabilize the system and supply backup power.
During the quarter, Brookfield also made outstanding progress on its expansion ambitions. Power contracts of 1,400 GWh (gigawatt-hours) of clean energy were signed, with 500 GWh coming from business customers.
These agreements allow the company to expedite its development efforts. Brookfield presently has 15 GW of initiatives in the works or the advanced stages of development. Solar, hydro, wind, storage, and green hydrogen initiatives, both distributed and utility-scale, are all included. Once completed, Brookfield anticipates them to add over $150 million to its yearly FFO.
Brookfield is also adding to its overall backlog. It is now pursuing 69 GW of the development projects. That’s more than three times its present operating capacity of 21 GW. It recently completed the acquisition of Urban Grid, which brought 22 GW of solar energy development. Meanwhile, it is collaborating with a partner to secure two 1.4 GW offshore wind farm projects in the Netherlands.
In addition, the corporation agreed to invest a total of $360 million in numerous transactions. One of these investments was into a novel decarbonization asset class. Brookfield is putting money into a top North American provider of modular carbon capture technology. As it strives to help businesses decarbonize their operations, the company sees a big opportunity to expand its carbon capture impact in the coming years.