Good day, and thank you for standing by. Welcome to the Brookfield Renewable’s Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your host today, Connor Teskey, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2023 conference call. Before we begin, we would like to remind you that a copy of our news release, investor supplement, and letter to unitholders can be found on our website. We would also like to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR, EDGAR, and on our website. On today’s call, we will provide a review of our 2023 performance and an update on the business and our growth initiatives before handing it over to Stephen Gallagher, CEO of Brookfield Renewable U.S., who will discuss how we are enabling the growth of the largest and fastest-growing companies around the world and what that means for our business. And then lastly, Wyatt will conclude the call by discussing our operating results and financial position. As always, following our remarks, we look forward to taking your questions. 2023 was a record year for our business on many metrics. We generated record funds from operations benefiting from organic growth and acquisitions, we deployed a record amount of capital into attractive and accretive opportunities across all our key markets, and we developed more capacity than we ever have before, all while strengthening our balance sheet. We have established ourselves as a global clean energy supermajor evolving from a pure play renewable energy producer to a preeminent platform for renewable power and decarbonization solutions with scale and the breadth of capabilities and relationships that set us apart from our peers. In a year where we saw rising interest rates and supply chain challenges facing the sector, we were able to execute across our business plan. Most notably, our disciplined approach to development, which focuses on removing risks upfront, meant that our development activities remained robust, delivering a record year and preserving our returns. All at a time when some market participants saw headwinds. We also saw the benefit of our prudent approach to financing our business, which combined with the strength of our balance sheet, durability of our cash flows, and diverse sources of scale capital, ensured that we were able to continue to pursue growth at a time when some could not and there was less competition. We deployed or agreed to deploy $9 billion of capital alongside our partners, highlighted by our acquisitions of Westinghouse, Deriva Energy, the remaining 50% interest in X-Elio, which we did not own, Banks Renewables, and investments in CleanMax and Avaada in India. And while our proposed acquisition of Origin Energy did not receive the required level of shareholder support, we are confident in achieving our target deployment of $7 billion to $8 billion over the next 5 years and growing our cash flows and distributions in line with our targets. Since the initial announcement of the Origin transaction, we have received in-bounds from businesses around the world who are seeking a partner with significant capital and deep operating expertise to accelerate their transition goals and enhance the value of their businesses. With respect to our development, we continued to scale up our capabilities and delivered almost 5,000 megawatts of new capacity in the past year, up from 3,500 megawatts in 2022, and we also pulled forward the rest of our pipeline. Our advanced stage pipeline is materially de-risked with over 25% of the next 3 years planned capacity already under construction, an additional over 20% with revenues and inputs fully contracted, and an incremental over 30% in the final stages of securing PPAs and construction contracts. Between our de-risked, highly visible development pipeline, the growth opportunities we are seeing in the market, and our organic growth levers, we are confident in achieving over 10% FFO per unit growth in 2024 and beyond. With that, we are pleased to announce an over 5% increase to our annual distribution to $1.42 per unit. This is the 13th consecutive year of at least 5% annual distribution growth dating back to 2011 when Brookfield Renewable was publicly listed. Now, we will turn it over to Stephen to discuss how we are enabling the growth of the global technology companies and what that means for our business.

Thank you, Connor, and good morning, everyone. With the significant growth in demand for data globally, the position of the technology mega cap, as the largest and fastest growing businesses in the world continues to solidify. Since 2020, the cloud computing segments of these companies have grown by over 30% per annum representing their highest growth segments and generating their highest margins. Increasing demand for cloud computing from digitalization and the adoption of AI-enabled tools are driving these companies to continue to invest heavily in their capabilities and capacity. And two of the key ingredients needed to deliver these products are computing power and energy. Over the last 12 months, the race to increase computing power has been illustrated by the increase in demand for certain inputs such as computer chips. However, we believe most investors have yet to grasp the importance of a secure energy source in enabling the delivery of the data center and computing power growth. The largest cloud computing businesses run on clean power. These companies have committed to 100% clean energy targets and have grown their consumption by approximately 50% per annum over the last couple of years, making them the largest buyers of green power globally. And now, the highly power-intensive nature of AI is acting as a multiplier on energy demand, which is increasingly becoming a key bottleneck for growth of cloud computing. For example, the integration of AI uses up to 10 times more power when integrated into a typical search process. Renewable power, as the cheapest form of bulk electricity production, is the solution to this growing electricity demand. Furthermore, as the scale and energy intensities of data centers increases, these facilities put pressure on the global electricity grids. As a result, certain regulators are now requiring data center developers to provide a power solution in order to receive their data center permits. This has put access to power on the critical path to growth for these technology companies. This is leading our partners to engage in commercial conversations earlier in the process to develop solutions with us, which is the dual benefit of both de-risking the technology company’s power needs and also our development pipeline. It is widely estimated that global electricity consumption from data centers will increase to approximately 10% of total electricity demand by 2030, up from approximately 2% today. To put this in context, this means that to satisfy the needs of data centers alone, which doesn’t factor in the penetration of EVs or broader electrification, additional generation capacity will be required equivalent to the size of the current U.S. grid. For the better part of a decade, we have been positioning our business to capitalize on these trends. By building a leading global development platform, combined with our early focus on corporate power marketing capabilities, this has allowed us to serve the needs of the largest and fastest growing buyers of green power. The global technology companies have been among the largest corporate customers of our businesses now for years, as we have differentiated ourselves with our scale and credibility, delivering new energy projects on time to enable their growth. Our ability to deliver 24/7 clean power solutions at scale and across geographies positions our business to continue to be a major beneficiary of this robust demand growth. Further, our ability to provide unique and tailored solutions at scale allows us to avoid competition and drive better returns in the bilateral markets. We have signed contracts to provide over 60 terawatt hours of power over the past 2 years to these large technology companies, an amount we expect to increase dramatically in the coming years. As a result, going forward, we expect a vast majority of our new renewable power development will be contracted to corporate customers, where we are seeing strong demand from our differentiated offerings at attractive contract terms. Currently, we have approximately 22 terawatt hours per year of generation contracted to corporate customers, representing approximately 30% of our total contract volumes, over double the volumes contracted to these types of customers 5 years ago. Based on our existing development pipeline, we expect contracted generation to corporate customers to double again by 2028, to approximately 44 terawatt hours per year or 45% of our contracted volumes. With that, I will pass it on to Wyatt to discuss our operating results and financial position.

Thank you, Stephen, and good morning, everyone. Our operations continue to perform well this quarter, benefiting from the diversification of our fleet and strong all-in power prices. We delivered solid results in the fourth quarter with FFO of $0.38, up 9% year-over-year; and on a full-year basis, we delivered record FFO at $1.1 billion or $1.67 per unit, a 7% increase over the prior year. While our results fell slightly below our target of over 10% FFO per unit growth for the year, largely due to later-than-expected transaction closings during the fourth quarter, we remain well positioned to achieve our goal going into 2024 and beyond. We are already seeing the benefits of our growth activities, which were back-end weighted this year, as we commissioned nearly half of our almost 5,000 megawatts of new capacity in the fourth quarter. We are also seeing strong cash flows from the closing of the previously mentioned major acquisitions that took place in the final 3 months of the year, and are expected to contribute over $100 million in incremental annual FFO. We also expect to receive an uplift as our fleet reverts to long-term average generation, particularly from our hydro assets, where we often see cyclicality. During the year, we continue to execute on our growth initiatives, as Connor highlighted, while simultaneously strengthening our balance sheet. We executed on almost $15 billion in non-recourse financings generating almost $500 million in upfinancing proceeds to Brookfield Renewable. We were also successful with our capital recycling program, which we continue to scale with our development growth, generating $800 million of proceeds over the past 12 months, representing over 3 times our invested capital. We take a disciplined and practical approach to asset rotation, looking to sell assets when they are in demand and attracting valuations at or above our internal assessments, regardless of technology or geography. This approach has served us well and generated returns above our underwriting targets for investors. During the second half of the year, we saw a disconnect between the price of our shares in the public markets and the underlying value of our business, and took that opportunity to repurchase 2 million units under our normal course issuer bid. Looking forward, we will continue to allocate capital based on where we are seeing the best risk-adjusted returns and remain confident we will continue to create meaningful value for our investors going forward. In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors, while remaining disciplined allocators of capital, leveraging our deep funding sources and operational capabilities to enhance and de-risk our business. On behalf of the Board of Management, we thank all our unitholders and shareholders for the ongoing support. We are excited about Brookfield Renewable’s future and look forward to updating you on our progress throughout 2024. That concludes our formal remarks for today’s call. Thank you for joining us this morning, and with that, I will pass it back to our operator for questions.

Our first question comes from Sean Steuart with TD Securities.

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

Good morning, Sean. Thanks for the question. So maybe we’ll come at this in a slightly different way, but we’ll answer your question head on. What we are seeing as a result of significant increases in new electricity demand, this is being driven by the data center demand, this is being driven by increased penetration of electric vehicles, this is being driven by electrification of industrial processes, is right now there is far more corporate offtake demand than there are ready to build projects. In key locations there is simply a supply-demand imbalance in favor of those that have ready-to-build projects in key locations. And the way this shows up in terms of pricing is the dynamic that we’ve been seeing for a number of years now, which is we are able to pass through higher CapEx costs, higher funding costs through to the off-taker in the form of higher PPA prices, while preserving our development margin. And, therefore, we are able to continually service this increased amount of demand and put more projects through into that increased amount of demand at the same development returns that we were seeing previously, if not even a little bit higher today because of that really robust supply-demand dynamic. So that’s what we’re seeing in terms of pricing. It will obviously depend on the respective power market and things like CapEx and funding costs within those respective markets. But what we are seeing because of that increased demand is the ability to preserve or even perhaps marginally enhance our development margins. And then in terms of contract duration, one thing we have been very uncompromising about for years now is, there’s been this perception that as renewables over the last 10 years came off government feed-in tariffs increasingly onto corporate contracts that meant that contract durations got shorter. We simply aren’t seeing that. And we’re seeing significant demand for long-term corporate contracts 15, 17, 18, and 20 years. Those are obviously very attractive to us and can be financed very attractively if we deal with high credit quality counterparties, and that’s really the bulk of demand that we’re seeing today.

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

Sean, it’s a really astute question, because you’re absolutely right. This demand, while significant, is not equal in all places. The power needs to be in a place where it can service that corporate demand load. But we are seeing a number of dynamics. First and foremost, the ability to work with the counterparties where there is the potential to co-locate new data centers near power generation that can be built. And our really strong relationships with the large corporate off-takers allow us to proactively work with them to identify those locations, and then either through M&A or through greenfield development prospecting, we can look to create development pipeline in those regions to service that demand. The second point I would make in regard to your question here is, the opportunity to service this corporate demand is really today. It’s not something that we’re seeing for the future. This is happening in real time. So in order to service this corporate demand, it’s not simply having the capability or the capital to do it. You actually need to already have a very large pipeline of projects. And this is where our strategy for the last few years is really coming to fruition, where we have been focused on buying premium developers with large development pipelines in core markets to ensure that we are well positioned to meet this demand as it has accelerated. And today, those pipelines are very valuable because they are in the ground, they are existing, they are working through their development process, and they can meet that demand in the near-term as opposed to simply planning for projects 3, 5, or 7 years out.

That’s great detail. Thanks, Connor. I will get back in the queue.

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

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

Sure. So, good morning, Rob, and thanks for the question. You are right that this dynamic is going to lead to concentrations in certain regions, this data center demand dynamic. And to be clear, there is without question the greatest concentration of data center growth that needs power supply is in the United States. We are very fortunate that over half of our development pipeline globally sits in the United States. The second thing to highlight here is, while individual projects might be signing contracts to support individual data centers, the corporate counterparty that backstops that contract is the corporate hold-co of these large tech companies. We have a corporate guarantee from the trillion-dollar-plus market cap companies around the world. It is not a ring-fenced counterparty credit individualized to a singular data center. And I think that’s a really important dynamic to understand because we take great comfort that as this growing opportunity set continues to expand, these are literally the best counterparties around the world. These are not individual assets. These are the large tech companies themselves that are the counterparties. And then to your question about scale, this is going to play into the hands of the larger players, but I think the reason for that is perhaps a little bit nuanced. We would really focus on two things. The power demand that is required by these large tech companies is truly remarkable. Sometimes it’s tough to put the magnitudes in context. And therefore, if you are a large technology company looking to secure your power supply, you can either work with literally thousands of individual small developers or you can work with a smaller number of very large developers. We are very fortunate to be in that group, or even at the top of the list when it comes to that group that can provide to meet the needs of these large technology companies at a scale that few others can, and really move the needle for them in terms of debottlenecking their future growth. So that would be point one. The other point that should not be underestimated, and why we are so constructive on this market is the most important thing to these counterparties is that projects are delivered on time, and that the developer does not walk away from the projects if they can’t get the equipment or they get knocked off schedule because of supply chain or shipping issues. Our global capabilities and our ability to push through issues using our operational capabilities when they arrive ensure that we are the most reliable counterparties to these large tech companies. The power will be delivered on schedule. I would say that is a completely underappreciated benefit for large players such as us because the worst thing for a tech company is if the power isn’t there and the data center can't turn on. This is why we’re finding them to be very constructive in terms of contract terms when working with large, reliable counterparties such as ourselves because the most important thing to them is that reliability and that the project will be delivered on time. That’s a reputation and a capability we’ve been reinforcing and enhancing for years now.

I appreciate that. Maybe as a follow-up and more broadly, with recovering equity markets, how are you thinking about allocating capital in 2024? Does the returns kind of skew more to the development side versus the buy side right now? Or how are you seeing that opportunity set?

Certainly. Really what we’ve seen, particularly in the last, call it, maybe 4 weeks of Q4 and into 2024 is that we’ve seen stabilization in interest rates. In 2023, rates were going up and up and up. The great part about our business is, this is a real returns business. It works whether interest rates are at 3%, 4%, or 5%, but everyone can appreciate that when markets are uncertain and rates seem like they’re going up in perpetuity that became a more tougher market for people to transact in. As we turn the page into a new calendar year here, what we have is stability in interest rates. Maybe they land at 3.75%, maybe they land at 4.5%, but they’re going to be within a pretty tight range here, and that is a very constructive level for our industry. As a result, we think this year will be very, very active from a transaction perspective both on the investment side and on the capital recycling side. Some of the uncertainty, particularly in the last half of 2023, probably caused a number of people to stand on the sidelines, but early indications in 2024 show that with this reduced uncertainty in the market, people are open for business, and we’re seeing that in our sales processes that have launched and we’re also seeing that in our engagement in terms of new growth opportunities. In terms of where specifically we’re seeing those opportunities, I would say it’s across the spectrum, and public companies still do remain a key focus of ours, even with somewhat of the relief rally in the latter part of the year. At where interest rates are settling, it’s a pretty good level for buying both operating assets and development assets, and I think we would be pretty balanced this year going forward.

Our next question comes from the line of Rupert Merer with National Bank.

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

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

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

Perfect. Thanks for the question. We have a very large critical base of baseload hydro. While that is very valuable, relative to wind and solar, hydrology is a slightly more variable asset class in terms of resource. But there’s two things I would focus on when it comes to our hydro LTA. One, we monitor it exceptionally closely and constantly need to update it for any financings or transactions that we do. Over any period of time, yes, there can be some variability a little below LTA, a little above LTA, but those long-term averages are accurate. Even when the resource can be a little above or a little below LTA, the other thing that needs to be overlaid on that dynamic is where is that resource above or below LTA. If our hydro resource is below LTA in a very high-value market versus being above LTA in a lower-value market, that can have a differing impact on our financial results. While that hydrology is a little more variable, it is very consistent over the long term. As our business continues to grow and diversify, the importance of that hydro LTA is being increasingly diluted over time. The second component of our LTA is a little bit more structural and it’s showing up a little more in our current results today for obvious reasons, which is as we buy new businesses, one of the things we often focus on is finding investment opportunities where there are clear operational enhancements that we can execute in the short- to medium-term under our ownership. So often when we buy new businesses, they do start at slightly below LTA as we take over those businesses from their previous ownership, and then as we execute our business plans and implement those operational improvements, those businesses trend up to that LTA number. As we’ve grown very rapidly over the last 12 to 36 months, we have more of that in our numbers today than we would have had, let’s say, 3 or 5 years ago. The great news is that’s all identified, that’s all within our control, and we will see those numbers trend up to LTA as we execute on some of the repowerings, refurbishments, and equipment replacements that we identified in our underwriting, and that’s all moving very much on track and should increasingly play out in our financial performance going forward.

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

I would say no. I don’t have a specific figure to provide here. But without a doubt, the most significant components of the discount to LTA are: one, just resource variability; and then secondly, those specific identified operational improvements that we are pushing through our assets. Curtailment, of course, does exist in this business, but I wouldn’t say it’s a material driver of our LTA results. I hope that answers your question. There’s perhaps one thing I would add, which is you commented on batteries and increasingly the implementation of storage. That is a very strong dynamic we are seeing in our business, in particular, the addition of batteries on an increasing proportion of the new development activity we do. We are seeing that as a very low-risk and attractive risk-adjusted return way to enhance a number of the assets that we’ve either recently acquired or are developing.

Great. Thank you for the color. I’ll leave it there.

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

Thanks. Good morning, everyone. Maybe just kind of building off your comment around interest rate stability, sort of opening up the M&A markets a little bit more, how would you frame the interest competitive dynamics around larger assets or portfolios? Is it the same as it was 6 months ago? Do you think the number of, I guess, potential interested parties have increased in the last couple of months?

I would say that the stabilization in interest rates absolutely has increased the number of interested parties. There’s no question about that. I would say we have really seen a fairly dramatic shift. Here we are at the beginning of February, end of January. If you compare the market today versus where we were at, say, the end of September 4 months ago, it is night and day in terms of the level of activity and the amount of interested parties, again, on both the buy side and the sell side. The only added point of color that we would make there, and it ties back to our answer to one of the previous questions, is that what we saw in 2023 was a number of businesses experiencing headwinds that we could largely attribute to one of two things. If you took significant basis risk in your development activities, the higher CapEx levels, and increasing CapEx levels, along with higher funding costs really caught you short, and that negatively impacted a number of developers worldwide, particularly those in the offshore space. That was one dynamic that posed a key headwind for 2023. The other dynamic was simply that the higher interest rates more materially impacted those businesses that were reliant on unfettered access to the capital markets and very cheap financing. Those businesses that had relied on that sort of funding structure suffered in last year’s economic environment. Those two dynamics have seen a little relief in the last few months, but we should be clear that they haven’t completely gone away. We have not returned yet, and I don’t think we will return to the almost zero interest rates and unlimited access to capital that was present 3 or 4 years ago. Therefore, some of those business models still don’t work and will need either capital or operating partners to get back on a stable footing. So while there is more activity in the markets, this remains a relatively robust investment opportunity set.

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

Yeah, both great questions. I would say my previous comments stand by everything and are vastly applicable. Transactions like what we did on the Duke transaction, or the Banks transaction, those were essentially bilateral deals of very significant scale where we offered something that essentially the other participants in the market could not. While there are more people active in the market today, there remains a very large opportunity set for us to do bilateral deals where either the transaction structure we can own, the operating capabilities we can bring, or the scale we can provide is relatively unmatched. For many transactions, is there more competition today? Yes. But are we seeing an inability to do bilateral transactions as we have done in the past? No, we are not.

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

100%. Sorry, I forgot to answer the second part of your question. Absolutely. We have seen strong demand to start 2024, and there appears to be still a lot of capital flowing into this sector. That capital took a pause for a couple of quarters in that more uncertain interest rate environment. It has not taken long for that capital to return. We expect to be relatively active on the capital recycling side in 2024 and in terms of where we see that activity, the same strategy we have always executed. We will be unemotional in terms of geography, asset class or technology, and we will look for opportunities where we can sell assets at greater values than we see in holding them in our own portfolio. I would say just given the relative dispersion of our portfolio that today is largely in North America and Western Europe, surely because of that concentration, that’s probably where we would see the greatest amount of asset recycling.

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

Okay. I will just sneak one more in just recent updates that had a positive turnaround maybe stepping into larger offshore wind investments, is that still something that you are really active on? Has any kind of change in terms of the likelihood of making a larger plane offshore wind sometime in 2024?

Sure. Our approach to offshore wind, and we will quickly restate it here. We love the technology. It’s large, it’s fast-growing, it’s mature, and quite frankly, because of the differentiated load pattern, it can provide to onshore wind and onshore solar. It is actually critical to many power markets around the world. What we have struggled with in the past is the investment profile or the basis risk you had to take as an investor or developer, where sometimes you had to invest hundreds of millions or billions of dollars upfront for the right to build out a project in 4, 5, or 6 years. In that time period, in that lag, market conditions could shift against you. Today, a number of market participants have seen headwinds and may need to exit some of their offshore wind projects. Some of those offshore wind projects are now much closer to construction or coming online, therefore, there is less of that basis risk that we had an aversion to. We are much more active in reviewing opportunities in the offshore space today than we would have been a couple of years ago. But like anything, we will compare those opportunities to the risk-adjusted returns we see elsewhere and allocate to the best ones.

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

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

Hi. Very good question and relatively easy to answer. The vast majority of our development activity traditionally in South America has been in Brazil, and for the last few years, we have been very, very successful in developing some large and attractive projects in that market. For those that don’t know power prices in Brazil, due to their very strong concentration of hydroelectric generation across the grid, are very dependent on hydrology levels. If you went back, I would say, 2 to 4, or 2 to 5 years ago, hydrology levels across the Brazilian system were relatively low, and that supported higher power prices that made wind and solar development very attractive. In the last 18 months, hydrology has dramatically improved in Brazil, and because that is across the system, it pushes power prices down, and today they are at very, very low historical levels. Our business in Brazil is almost 100% contracted, so we are not exposed to those lower power prices, but it does make it more difficult to find new wind and solar projects that can secure contracts in this price environment and still be developed at attractive levels. This is a short-term dynamic. Wind and solar growth in Brazil will recover and it will be very robust, but this has been driven by a relatively large shift in hydrology levels that has changed the market prices. Therefore, we are simply in a period of time where development activity in that market is going to be reduced because it’s tough to secure contracts at attractive enough levels to justify the capital expenditures.

That’s a really good color, Connor. I’m glad they’re getting more water, but too bad that slows down development. So the next question is, obviously, you’ve commissioned about 4.5 gigawatts in 2023 and that’s growing to 6.6 and 7.6 gigawatts over the next 2 years. I know you have your target of roughly deploying, call it, $1.5 billion per year on average. So of that $1.5 billion, roughly what portion of that now is going to development?

Yeah, sure. I would say going into the next couple of years, 2024 and 2025, approximately one-third, give or take, is already identified in organic growth opportunities. That number could prove to be a little light, but I would say it’s about one-third.

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

Sure. Our exposure to solar panel manufacturing is part of a structured, large structured investment we made in a company called Avaada Energy in India. Avaada Energy is one of the largest independent renewable power owner operators and developers, and that is the vast majority of their bulk of business. In addition to being that large scale owner and developer of renewable power, they also have had two other business lines. One, they are doing some solar panel manufacturing themselves; and two, they are also in the early stages of some green hydrogen production, all of this in India. Our exposure to this space is through Avaada, where we have made a downside protected, structured investment to fund their growth across all three of those verticals. While we do have a good relationship with Avaada and we’d happily use some of those solar panels when they are up and running and producing, our investment exposure is very modest relative to our global procurement needs. We are seeing around the world a trend towards just the scaling up of the supply chain for both renewable power and other decarbonization solutions. We could see ourselves in the future looking to be an investor in scaling up that supply chain, but only if we can do so on a very attractive risk-adjusted return basis and with an investment profile that we are comfortable with. That essentially means we would only do it if our investment was backed by long-term take-or-pay off-taker contracts, very similar to what we look for when we build a new solar plant or wind farm. So we would not rule out investing in the supply chain in the future, but only if we can do so with an investment profile commensurate with what we typically target. That means it would have to be backed by long-term off-take contracts.

That’s great color. I’ll leave it there. Thanks, Connor.

Our next question comes from the line of David Quezada with Raymond James.

Thanks. Good morning, everyone. Maybe first one for me just on the comments and the release around in-bounds that you’ve gotten in-bound calls since the Origin deal was announced. Just curious if there’s any color you can provide on what kind of opportunities you see there, maybe in terms of the nature of those deals, geographical location, the scale of those opportunities, any color on that?

For sure. What we would say is, while the outcome of the Origin vote was disappointing, going through that process and the highly public nature of it, we really demonstrated, one, not only the business plan we were willing to sign up for, but also the operating capabilities and capital commitment we would throw behind one of those large-scale business transformation or power transformation opportunities. The other thing that I think was demonstrated throughout Origin is that our business plan was really predicated on the exact same thing we do everywhere else around the world. It was predicated on being a leading high-quality, best-in-class renewable power developer and just doing that within a different company or business construct. I think that was very illustrative and illuminating to the market because we have received in-bounds, and I would say those in-bounds are across North America, South America, Europe, and Australia since the announcement of Origin. The one point I would highlight, however, David, is these are very large and strategic decisions for a company to make. This is really changing the trajectory of a business, a large-scale CapEx program to transition businesses that leading businesses in their market to less carbon-intensive and more de-risked and more valuable business strategies, but over a multi-year period. Therefore, those types of transactions don’t happen overnight. They involve a long-term courtship period, an education process, and working with those companies before a transaction can be agreed upon or come to fruition. So while we are having a number of those conversations today, I would suggest that we’re excited about them, but they do tend to be longer lead time deals.

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

Yeah, certainly. Great question. We will revert back to a point that I think it’s critical not to lose sight of, and it ties to a bunch of major themes we’ve been discussing on today’s call. Today energy transition, decarbonization, and renewable power development is undoubtedly driven by corporate demand far more than it is by government push. While politics does have a role to play, it is in no way going to disrupt the rapid growth and the current trend line of investment and opportunity in those sectors. However, I do think it is important to respond to some of the rhetoric and headlines in the market today, depending on what might happen in the U.S. elections. I think there are two very important things to highlight. One, under the IRA today, the vast majority of IRA funds are going to Republican states. While there may be changes to that bill under different leadership, we wouldn’t expect it to change dramatically. The second thing to highlight is, what’s fantastic about the current situation in the United States is we’ve seen what happens for renewables growth under both a Republican or a Democratic leadership in recent years. Even when there was Republican leadership in the United States, that was one of the fastest growth periods for renewable power in that country. This reiterates that while government policy can have an effect on things, the trend line of corporate demand is going to set the pace and growth of this industry, and government policy is simply going to put a little bit of ebb and flow around that trend line. It’s certainly not going to wildly change our approach to the market or our strategy.

That’s great color. I appreciate it. I’ll turn it over. Thank you.

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

Hi. Thank you. Good morning. I wanted to continue the topic of corporate M&A versus asset acquisitions, and I’m curious when you think about corporate deals with Brookfield Renewable, historical or even how you think about it going forward. What do you think are the main benefits for you specifically on the corporate transaction, especially when you talk about maybe that long drawn-off process with courtship?

Yeah, certainly. It’s a great question, and I would highlight two or three things. Particularly in an environment where we can differentiate ourselves using our scale and operating capabilities. Those corporates are essentially picking a partner to help them transition to a new business model that is going to be more sustainable and more valuable for decades to come. They don’t want to pick a partner who isn’t very, very credible without best-in-class capabilities. We do think it is an environment where we can do those types of deals on a bilateral basis and really be differentiated and, therefore, hopefully target some very attractive returns on our capital. The other thing that is important to highlight is similar to what we’ve seen in other power transformation or business transformation opportunities, if there is an underappreciated benefit in some of those deals. Those are often large and leading corporates in many of the markets that they operate in. As a result, there’s often some very attractive embedded infrastructure within those businesses that we can utilize to make the invested capital in renewables build out or other transition initiatives either more de-risked or done at higher returns. These businesses are often leading and have been built up over years and decades, the underlying infrastructure is sometimes an underappreciated benefit of some of those transactions.

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

Absolutely. We remain very committed to increasing our distribution within that 5% to 9% annual increase range that we have had in the market for years now. Our decision on where we set within that range is always dictated by where can we drive the best returns for our capital. Because we are simply seeing so much growth and have seen so much growth in our industry and quite frankly within our company, both in our organic pipeline and our M&A pipeline, we have been at the low end of that range. That’s simply because we are seeing such attractive opportunities to deploy that capital very accretively into growth. We are a long way from making those decisions for years to come, but that trend has been consistent for a number of years now and no doubt played a big role in where we set the distribution increase this year.

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

Hi, you have Moses Sutton from BNP. How do you think about contracted versus spot power price going forward as the percentages move into the 80s and 70s? Would you see decreases or increases in realized price and how do hedges play a role?

Yeah, certainly. Our business is, outside of some of the hydro facilities we own in essentially the United States and Colombia, a 100% contracted business. We continue to believe that the risk-adjusted returns you can get by fully contracting out our wind and solar pipelines, all of our new development, the attractive financing you can get against those contracts and the stability it provides to our growth and our earnings is the most attractive thing we can do. Therefore, we remain committed to not building on speculation, only building when we’ve secured that long-term contracted revenue off-take. But to your question, our contract profile I would say almost always looks the way that it does today. A little bit higher in the near-term and then kind of fading down, call it, 10 percentage points over the next 5 years. That is largely just our hydro portfolio that does have some modest component of merchant risk. We do that to protect against the variability of the resource. Many of those contracts are rolling off over the next 2 or 3 years, but we would simply look to re-contract them at that point. I would say, being at essentially 90% contracted for the current year and tailing off 10 percentage points from there over a 5-year forecast, that profile is largely going to stay the same and just keep rolling forward. If anything, it might go a little bit up because the power price environment today is far more constructive than it’s been over the last 3 to 5 years, so we might enter into more long-term contracts on that hydro portfolio. Otherwise, I would say that profile is largely going to stay the same, even as time passes.

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

I would say it certainly wasn’t anything to do with LTA performance that didn’t even come into the discussion. What we are always looking to do is use excess leverage capacity within our portfolio as a means to raise liquidity at very attractive rates that we can then reinvest into growth in a very accretive manner. We’ll look to do that on an opportunistic basis going forward. A great example of that was how we tapped the MTN market just in January, securing 30-year term debt at very attractive rates when there was an attractive opening in that market. I would say there is nothing specific around the timing of those upfinancings. But, Wyatt, I’ll hand to you if there’s anything to add.

Yeah, Moses, the financing environment for the majority of where we’re looking to do those upfinancings are on our hydro assets. The financing environment continues to be robust and is probably even more robust as rates have normalized. This was just a factor of timing and planning around our funding needs, capacity that we had previously mentioned, that additional $300 million continues to be there, and it was just about us managing our sources and uses based on our growth pipeline. So it was really just a factor of timing, and as I mentioned, the capacity is there, and in fact, the environment has gotten better than we would have made that estimate around $800 million.

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

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

This concludes today’s conference call. Thank you for participating. You may now disconnect.