Brookfield Renewables acquires distributed generation developer for $700m

Just months after it acquired clean power developer Urban Grid in a $650 million deal, Brookfield Renewable Partners said it paid $700 million for what it termed a “leading integrated distributed generation developer” in the U.S.

The deal was announced as part of the firm’s second quarter financial report, released August 5. During the quarter that ended June 30, the company reported commissioning 1 GW of renewable energy capacity and also earmarked $3 billion for growth initiatives. It said it continued to execute on a roughly 17 GW under-construction and advanced-stage pipeline, and expanded its development pipeline to 75 GW.

Brookfield Renewables reported funds from operations of $294 million for the three month period. It said that was a 10% increase over the same period in the prior year. 

Through the first half of the year, the company deployed or agreed to deploy $4.5 billion of capital across a range of investments, including battery storage, carbon capture, distributed generation, and utility-scale wind and solar. It said these investments “represent new and incremental growth levers for our business,” beyond its continued work in renewables.

The company said it would name its most recent acquisition at a later date, but said the business has in-house expertise across all stages of the development lifecycle. The business has 500 MW of contracted operating and under construction assets located primarily in the U.S. northeast, and an 1,800 MW development pipeline, of which almost 200 MW have what Brookfield said were “long-term, creditworthy counterparties.”

During the quarter, the company also invested in a private owner and operator of long-term power and utility assets across the Americas with 1,200 MW of installed capacity. The investment is expected to support a development plan that includes a roughly 1,300 MW renewable development pipeline. Brookfield said it committed to invest up to $500 million through both preferred shares and a 20% stake in the common equity.

Brookfield Renewables also reported that it expanded its North American carbon capture and sequestration platform through a joint venture to establish a new carbon management business. Under an arrangement with California Resource Corporation (CRC), Brookfield said it would partner to fund the development and construction of identified CCS projects in California, with an initial goal of deploying up to $500 million of capital. 

It said it expects the joint venture would benefit from a first-mover advantage through CRC’s ownership of prospective storage reservoirs in California. It said the state is “one of the most desirable jurisdictions globally” given the state’s Low Carbon Fuel Standards credit system.

Brookfield said the joint venture is targeting the injection of 5 million metric tons per annum and 200 million metric tons of total carbon dioxide storage development, which if reached, could result in an additional investment of approximately $1 billion.

In Brazil, the company signed an agreement to acquire a 600 MW greenfield solar project in late-stage development. The project is expected to require around $190 million of equity capital.

The company also agreed to acquire its first renewable energy park in India. The 500 MW facility is expected to enable Brookfield to provide decarbonization services to commercial and industrial customers. The project is expected to require around $110 million of equity capital. 

Across the rest of Asia, the company agreed to acquire around 750 MW of wind assets consisting of primarily ready-to-build or under-construction projects for a total investment of approximately $340 million. The projects, some of which we are being acquired alongside Apple’s renewable energy fund, are expected to be commissioned over the next year.

The company said it is on track to commission an additional 2,800 MW of capacity by end of the year. This includes wind repowerings in the U.S., including the 850 MW Shepherds Flat project, which Brookfield is expected to achieve “substantial completion” by the end of the year. 

Brookfield Renewable has a portfolio that consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia, and totals around 23,000 MW of installed capacity. 

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with over $750 billion of assets under management.