Baltej Sidhu

Baltej Sidhu asked about the most attractive risk-adjusted opportunities for Brookfield Renewable Partners, considering compressed renewable infrastructure valuations and the U.S.-based development pipeline, specifically whether these are operating assets, late-stage development, or early-stage platforms, and how this mix is expected to evolve into 2026. He also inquired about the market for acquiring additional hydro assets, particularly in the context of the Google HFA and the scarcity of hydro.

Answer

CEO Connor Teskey identified three primary attractive opportunity themes: public companies, carve-outs from broader utilities or energy businesses due to capital needs, and a bifurcation in the developer market where high-quality developers command a premium while others with large pipelines offer more attractive pricing. He expects to be active in acquiring projects from the latter to add to Brookfield's pipeline. Regarding hydro, Mr. Teskey noted strong demand and premium valuations in U.S. markets like PJM and MISO, with offtakers now looking beyond these regions. He indicated a focus on acquiring non-core assets in these new markets for operational improvements and recontracting under framework agreements, emphasizing that opportunities are very location-specific.

Baltej Sidhu asked about changes in BEP's perspective regarding federal tax credit eligibility for its U.S. development pipeline through 2029 and about valuation trends in private markets for asset rotation, including jurisdictional breakdown.

Answer

Connor Teskey (CEO, BEP) confirmed that BEP has safe-harbored its entire U.S. development pipeline out to 2029 for tax credits. He noted a lack of clarity on FEOC definitions but expects stricter rules to favor large players. Mr. Teskey stated that demand and valuations for high-quality, contracted operating renewables assets are significantly higher in private markets, anticipating accelerated capital recycling in North America, Western Europe, Australia, and India over the next 2-3 quarters.

Baltej Sidhu inquired about any changes in the eligibility of Brookfield Renewable's U.S. development pipeline for federal tax credits, particularly regarding safe harboring and FEOC definitions, and how private market valuations for high-quality operating renewables assets compare to public markets.

Answer

CEO Connor Teskey confirmed that Brookfield Renewable has safe-harbored its entire U.S. development pipeline out to 2029 for tax credits. He noted ongoing monitoring for FEOC definitions, expecting large players like Brookfield Renewable to be favored by stricter rules. He also stated that private market demand and valuations for recently built, contracted, high-quality operating renewables assets are significantly higher than in public markets, leading to accelerated capital recycling activities globally.

Balte Sidhu asked about the most attractive risk-adjusted opportunities for Brookfield Renewable Partners, considering compressed renewable infrastructure valuations and a largely U.S.-based development pipeline, specifically inquiring whether operating assets, late-stage development, or early-stage platforms are most appealing, and how this mix might evolve into 2026. He also followed up on the scarcity of hydros, the Google HFA, and the strategy for potentially acquiring additional hydros to meet the 3 GW target.

Answer

CEO Conor Teskey identified three key attractive opportunity themes: public companies, carve-outs from utilities/energy businesses due to capital needs, and a bifurcation in the developer market where high-quality developers command a premium, while less-scaled developers with large pipelines offer attractive pricing. Regarding hydros, he noted strong demand and premium valuations in specific U.S. markets (PJM, MISO), with offtakers now looking beyond these, creating opportunities to acquire non-core assets for operational improvement and recontracting under framework agreements.

Baltej Sidhu inquired about changes in Brookfield Renewable's perspective regarding the eligibility of U.S. development pipeline projects for federal tax credits, specifically concerning safe harboring and FEOC definitions, and how valuations are trending in private markets for renewables assets globally compared to public markets.

Answer

CEO Connor Teskey confirmed that the U.S. development pipeline out to 2029 has been safe-harbored for tax credits. He noted that while FEOC definitions lack clarity, stricter rules would likely favor large players like Brookfield. He also stated that demand and valuations for recently built, contracted, high-quality operating renewables assets are significantly higher in private markets than public, with robust demand expected across North America, Western Europe, Australia, and India for asset recycling.

Baltej Sidhu with National Bank of Canada asked about the eligibility of U.S. development pipeline projects for federal tax credits through 2029, particularly regarding safe harboring and FEOC definitions, and how private market valuations for asset rotation compare to public markets.

Answer

CEO Connor Teskey confirmed the entire U.S. development pipeline is safe-harbored through 2029. He noted ongoing uncertainty around FEOC definitions but expects stricter rules to favor large players. He also highlighted significantly higher demand and valuations for high-quality operating renewables assets in private markets compared to public, anticipating accelerated capital recycling globally.