Brookfield Renewable Q2 Earnings Call Highlights

Brookfield Renewable NYSE: BEPC reported record second-quarter funds from operations as the renewable power operator expanded its battery storage platform, advanced nuclear development efforts through Westinghouse and continued recycling capital from operating assets. Funds from operations, or FFO, totaled $421 million in the second quarter, up 13% from a year earlier, while FFO per unit rose 11% to $0.62. For the trailing 12 months, FFO reached $1.444 billion, or $2.14 per unit, representing year-over-year growth of 14% and 11%, respectively. Chief Executive Officer Connor Teskey said the company commissioned 1.3 gigawatts of capacity during the quarter and signed power purchase agreements for 2.6 gigawatts from its advanced development pipeline. Brookfield Renewable deployed or committed $5 billion toward growth investments, including its announced acquisition of battery storage company Aypa, with $760 million attributable to BEP. Chief Investment Officer Jay Vayna said Brookfield Renewable agreed to acquire Aypa, described as North America’s largest standalone battery storage platform, for $3 billion, or about $420 million net to BEP. Aypa has approximately 3 gigawatts of highly contracted operating and under-construction assets, another 3.5 gigawatts of contracted projects and a development pipeline exceeding 20 gigawatts, Vayna said. The acquisition will double Brookfield Renewable’s operating and under-construction battery capacity to roughly 6 gigawatts and increase its development pipeline by more than 30% to over 80 gigawatts. Vayna said Aypa, combined with Brookfield Renewable’s acquisition of Neoen at the end of 2024, establishes the company as a leading global battery storage platform. He said management sees opportunities to create value by accelerating development, optimizing capital structure and commercial strategy, and recycling assets over time. During the question-and-answer session, Teskey called batteries the company’s fastest-growing technology and said Brookfield Renewable is pursuing storage investments alongside new wind and solar projects, on a standalone basis, and at existing wind and solar sites. He said the company has relationships with major domestic and international battery suppliers and is entering global framework agreements for battery equipment. Teskey said battery levelized costs of energy have declined substantially over the past 24 months. While input costs can cause short-term variability, he said Brookfield Renewable expects long-term battery LCOEs to continue declining as supply chains expand and technology improves. Teskey said Westinghouse, Brookfield Renewable’s nuclear technology business, is benefiting from demand for reactor life extensions, restarts and new-build programs.