Nelson Ng

Nelson Ng inquired about the potential for excess interconnection capacity at Clearway's existing portfolio and whether a broader trend of co-locating battery storage, including hybridizing the entire fleet, should be expected. He also asked for an updated timeframe for the pending Deriva acquisition, noting the previous guidance of the first half of this year.

Answer

Craig Cornelius, President and CEO, confirmed that the Utah solar fleet serves as a test case for hybridization, demonstrating the value of firming capacity using existing interconnection. He noted opportunities for similar hybridization at other solar projects, particularly in California, with tax credits extending well into the next decade. For the Deriva acquisition, Mr. Cornelius stated that it is on a very solid track to conclude imminently, well in advance of the first half of the year, with the first phase of non-recourse financing already in place.

Nelson Ng inquired about an updated timeframe for the pending Deriva acquisition, noting that previous guidance indicated a first-half-of-this-year closing.

Answer

CEO Craig Cornelius stated that the acquisition is on a very solid track and expected to conclude imminently, well in advance of the end of the first half of this year. He mentioned that the first phase of non-recourse financing is already in place.

Nelson Ng asked for more details on the assumptions for Clearway's flexible generation portfolio in the 2030 outlook and an update on how contracted those assets currently are. He also inquired whether Clearway Energy, Inc. (CWEN) should be expected to buy 50% or 100% of future development pipeline projects.

Answer

President and CEO Craig Cornelius stated that the 2030 range for flexible generation assumes contributions similar to 2024 and 2025 levels, with optimism for harvesting even more value due to factors like the marginal cost of four-hour storage and increasing demand forecasts. He noted that the company is patient in optimizing incremental resource adequacy contracts. Regarding dropdowns, Mr. Cornelius said that projects identified through 2027 are planned for 100% CWEN equity investment, but later in the decade, they will evaluate capital allocation and potential complementary funding sources while maintaining simple financing structures.

Nelson Ng requested more details on the assumptions for Clearway's flexible generation portfolio in the 2030 outlook and an update on how contracted those assets are. He also asked whether Clearway Energy, Inc. (CWEN) should be expected to acquire 50% or less than 100% equity interest in future dropdown projects, given the large development pipeline.

Answer

Craig Cornelius, President and CEO, stated that the 2030 outlook for flexible generation assumes contributions similar to 2024 and 2025 levels, with optimism for harvesting even more value due to factors like the marginal cost of four-hour storage and increased demand forecasts. He noted that all identified CWEN investments through 2027 are planned for 100% equity interest. For later in the decade, CWEN will evaluate its funding capacity and may selectively pace development assets or explore complementary funding sources, always prioritizing simple financing structures for predictable financial performance.

Nelson Ng asked about XPLR Infrastructure's capital allocation strategy for 2026-2030, specifically regarding the use of free cash flow, potential for unit buybacks or distributions, and assumptions for excess cash utilization towards debt reduction by 2030. He also inquired about any changes in the plan for CEPF 3, which previously suggested selling underlying assets.

Answer

Alan Liu, President and CEO, explained that the priority is to invest retained cash flows into the portfolio to enhance value and realize upside, covering CEPF buyouts and equity investments, with project debt supplementing the balance. Regarding CEPF 3, Mr. Liu clarified there is no change in the plan, emphasizing it's a call option maturing in 2027, allowing time to decide between asset sales or letting cash flows flip to the investor.

Nelson Ng asked about XPLR's capital allocation strategy for 2026-2030, specifically regarding the use of Free Cash Flow before growth, funding for CEPF buyouts and investments, and the potential for unit buybacks or distributions. He also inquired about any changes in the plan for CEPF 3.

Answer

Alan Liu, President and CEO of XPLR Infrastructure, clarified that retained cash flows are intended to fully cover CEPF buyouts and equity investments, with incremental cash flow and project debt financing the balance of announced investments. Regarding CEPF 3, Mr. Liu stated there was no change in the plan, emphasizing it's a call option with maturity in 2027, allowing time to evaluate options like asset sales or allowing cash flows to flip to the CEPF investor.

Nelson Ng asked about potential headwinds or bottlenecks from the federal government regarding permitting for onshore wind and solar projects in the U.S., and sought clarification on the flat year-over-year realized power prices for the U.S. hydro segment, inquiring if an increase is expected. He also questioned the capital recycling framework, specifically the $1.5 billion additional sales to existing buyers, and how repeat customers streamline the process.

Answer

CEO Conor Teskey stated that solar and battery development in the U.S. is accelerating with no slowdown, while onshore wind permitting has seen some slowdown but projects are still progressing. He explained that U.S. hydro prices should increase going forward due to the high scarcity value of hydro power and new long-term, inflation-linked PPAs with hyperscalers. Regarding capital recycling, he noted that frameworks with repeat buyers significantly de-risk development platforms and funding plans, creating a recurring, predictable source of capital.

Nelson Ng with RBC Capital Markets inquired about improvements in the pace of permitting for power deployment in the U.S. and discussed regions outside the U.S. for data center power discussions.

Answer

CEO Connor Teskey noted incremental but not dramatic improvements in U.S. permitting, highlighting execution as the bottleneck despite strong stakeholder intent. He also confirmed global data center demand, with the largest concentration in the U.S. and Western Europe, extending to Australia, India, and South America, and mentioned growing sovereign compute demand.

Nelson Ng asked about the pace of permitting improvements for power deployment in the U.S. and the global regions outside the U.S. where Brookfield Renewable is discussing power for data centers.

Answer

CEO Connor Teskey noted incremental but not dramatic improvements in U.S. permitting, emphasizing strong stakeholder intent to accelerate approvals. He stated that data center demand is almost global, with the largest concentration in the U.S. and Western Europe, and growing interest from countries for sovereign compute.

Nelson Ng from RBC Capital Markets asked about Brookfield's ability to accelerate development in the PJM market following high capacity payments, the reason for the significant increase in the North American development pipeline for 2027, and how large tech companies are balancing their need for baseload versus intermittent renewable energy.

Answer

Connor Teskey, CEO of Renewable Power & Transition, explained that the PJM auction results reflect a broader supply-demand imbalance they see globally. He stated Brookfield is already accelerating development where possible, using M&A, and leveraging partnerships with large power buyers to gain a 'hunting license' for new projects. Teskey clarified that the 2027 pipeline increase is purely due to the timing of specific projects coming online. He also noted that tech companies are showing growing sophistication, increasingly demanding 24/7 power and bundled products that include capacity, which plays to Brookfield's strengths.

Nelson Ng of RBC Capital Markets inquired about the U.S. permitting situation for renewable projects, the potential for additional framework agreements similar to the one with Microsoft, and the drivers behind the growth in the Asia Pacific development pipeline.

Answer

Connor Teskey, an executive, clarified that tariff impacts are not material and that permitting delays are minimal, primarily affecting a small portion of their U.S. wind pipeline. He confirmed strong interest from other corporate counterparties for framework agreements, suggesting more could be signed in 2025. Teskey attributed the Asia Pacific pipeline growth primarily to the acquisition of a French-headquartered company with significant operations in Australia, focusing on wind and batteries, and also highlighted strong growth in their Indian platforms.

Nelson Ng of RBC Capital Markets asked about the potential for acquiring gas-fired generation to support data centers, how contracts are structured to mitigate risks from potential U.S. tax subsidy changes, and the forward-looking capital allocation mix between M&A and development.

Answer

Executive Connor Teskey responded that while gas has a role in the energy transition, the company's focus remains on renewables as the cheapest power source. He confirmed that new PPAs increasingly include adjusters to pass through any changes to tax credits, protecting development margins. Teskey also stated that the company expects to be very active in M&A in 2025, noting that public markets currently look particularly attractive for potential acquisitions.

Nelson Ng asked if recent market volatility post-U.S. election creates more capital deployment opportunities and questioned whether future hydro recontracting would be driven more by direct demand from big tech or continue with utilities.

Answer

Executive Connor Teskey stated that market volatility reinforces their competitive advantage by reducing others' access to capital, making their investment pipeline 'incredibly robust.' Regarding hydro assets, Teskey explained that the key driver is the significant overall increase in power demand. Whether the contract is with a utility or directly with a corporate offtaker, the underlying demand is driving higher prices for their clean, dispatchable power, and he expects a mix of both contract types going forward.

Nelson Ng from RBC Capital Markets inquired about Brookfield Renewable Partners' progress on the Microsoft Framework Agreement, the expected cadence of capacity through 2030, and the broader demand from hyperscalers. He also questioned the company's liquidity position, specifically the comfort level with the $4 billion mark relative to an expanding growth opportunity set and the dynamic nature of capital deployment. Furthermore, Ng asked about potential headwinds for onshore wind and solar permitting in the U.S., the future trajectory of U.S. hydro realized power prices, and the strategy behind capital recycling frameworks for newly built assets. He also explored the acceleration of Brookfield's battery storage development, including the mix of greenfield versus M&A and the evolving revenue model (contract vs. merchant arbitrage). Finally, Ng sought clarity on Brookfield's current stance on offshore wind opportunities, particularly in Europe, and the potential impact of the PJM backstop auction on hyperscaler engagement and existing generation repricing.

Answer

CEO Connor Teskey highlighted accelerating demand from corporates and hyperscalers, noting Microsoft's interest in broader regions and technologies, expecting growth from 2026 onwards. He clarified that U.S. solar and battery development is accelerating due to speed and cost, while onshore wind permitting faces some slowdown but projects still progress. Teskey confirmed an expected increase in U.S. hydro contracted power prices due to high scarcity value and new 20-year PPAs with hyperscalers. He detailed the capital recycling program's growth, emphasizing new frameworks for quickly recycling newly built assets at scale, which de-risks development and funding plans. Teskey explained the rapid growth in battery storage, driven by dramatic cost reductions and faster execution, with an increasing shift towards long-term contracted revenue models. He noted a more constructive view on offshore wind in specific markets like Europe, evaluating opportunities based on risk-return. Regarding the PJM backstop auction, Teskey viewed it as a reflection of energy demand and grid tightness, positive for accelerating new capacity, and noted Brookfield's PJM hydro fleet is already contracted with Google. CFO Patrick Taylor affirmed comfort with the $4 billion liquidity target, stating it's maintained by scaling capital recycling alongside the growing development pipeline, with potential for future increases as the pipeline expands.

Nelson Ng questioned whether Brookfield Renewable Partners is experiencing any federal government permitting headwinds or bottlenecks for onshore wind and solar projects in the U.S. He also asked about the flat realized power prices for the U.S. hydro segment at $83 year-over-year, inquiring if an increase is expected. Finally, he asked about the capital recycling framework, the proportion of repeat buyers, and how this streamlines the asset recycling process.

Answer

CEO Connor Teskey stated that solar and battery development in the U.S. is accelerating with no slowdown, driven by quick deployment and low costs. He noted some slowdown in onshore wind permitting from the federal government, but projects are still progressing. Regarding hydro prices, Mr. Teskey confirmed an increase is expected, highlighting the scarcity value of hydro and strong demand from corporates for long-term PPAs. He explained that new contracts, some starting in future years, will lead to higher contracted prices. Mr. Teskey also detailed that capital recycling has become a consistent funding source, with new frameworks designed to quickly recycle newly built assets at scale, significantly de-risking development platforms and funding plans.

Nelson Ng asked about improvements in the pace of permitting for power deployment in the U.S. and global regions experiencing increased data center demand.

Answer

CEO Connor Teskey noted incremental but not dramatic improvements in U.S. permitting, emphasizing strong intent from stakeholders to accelerate approvals. He also confirmed widespread global data center demand, with the largest concentration in the U.S. and Western Europe, and growing interest in sovereign compute.

Nelson Ng asked about improvements in the pace of permitting for power deployment in the U.S. given better tax credit visibility, and also inquired about data center power discussions in regions outside the U.S.

Answer

Connor Teskey (CEO, BEP) acknowledged the strong intent from stakeholders to accelerate permitting but noted only incremental, not dramatic, progress on the ground. He expressed confidence in future improvements. Regarding data centers, Mr. Teskey confirmed global demand, with significant activity in Western Europe, Australia, India, and South America, in addition to the U.S., and highlighted 'sovereign compute' as an emerging demand source.

Nelson Ng asked about Brookfield's ability to accelerate development in the PJM market following high capacity auction results, the timing of its North American development pipeline, and how large tech companies are balancing baseload versus intermittent power needs.

Answer

CEO Connor Teskey explained that the PJM results reflect a global supply-demand imbalance and that Brookfield is already accelerating development where possible, using M&A and framework agreements to secure its pipeline. He clarified that the 2026-2027 development profile is due to specific project timing, not a strategic shift. Teskey also noted that tech companies are increasingly seeking sophisticated 24/7 power solutions, including capacity, which plays to Brookfield's strength in diverse technologies like hydro and nuclear.

Nelson Ng of RBC Capital Markets inquired about the U.S. project permitting situation, the potential for additional corporate framework agreements beyond Microsoft, and the primary drivers of the significant growth in the Asia Pacific development pipeline.

Answer

Connor Teskey, an executive, responded that permitting delays for federal permits affect a minimal portion of their U.S. pipeline and are not expected to have a material impact. He indicated it is 'far more likely than not' that similar framework agreements to the one with Microsoft will be executed in 2025. Teskey confirmed the Neoen acquisition is the largest driver of the Asia Pacific pipeline growth, particularly through its large-scale wind and battery operations in Australia, supplemented by strong growth from platforms in India.

Nelson Ng inquired about the U.S. permitting situation amid strong power demand, the potential for additional large-scale framework agreements beyond the Microsoft deal, and the drivers behind the growth in the Asia Pacific development pipeline, particularly the role of the Neoen acquisition.

Answer

Connor Teskey, an executive, clarified that permitting delays are minimal, affecting only a 'mid-single-digit portion' of their development pipeline and not having a meaningful impact. He stated it is 'far more likely than not' that similar framework agreements will be executed in 2025 due to high inbound interest. He also confirmed the Neoen acquisition is the primary driver of Asia Pacific pipeline growth, especially in Australia with a focus on wind and batteries, and highlighted strong organic growth from Indian platforms like Evren and CleanMax.

Nelson Ng inquired about the potential for developing or acquiring gas-fired generation for firm power, how contracts are structured to handle U.S. tax subsidy changes, and the expected capital allocation mix between M&A and development.

Answer

Connor Teskey (executive) stated that while gas has a role in the energy transition, Brookfield's focus remains on renewables due to superior demand and returns. He clarified that they are increasingly including adjusters in PPAs to pass through any changes in tax credits, protecting development margins. Teskey also confirmed they expect to be very active in growth during the year, noting that public markets currently look particularly attractive for potential acquisitions.

Nelson Ng from RBC Capital Markets asked for clarification on whether to expect further tax recoveries from the hydro business in Q3 and questioned if the company has the right executive team in place or if additional hires are anticipated.

Answer

Interim CFO Brian Chin stated that the hydro-related tax adjustments were finalized with a true-up in Q2 and no further updates are expected. CEO Rod West addressed the team composition, explaining that he will not signal future hires but is constantly evaluating if the company has the right skills in place to achieve its objectives, and any changes will be announced as they are made.

Nelson Ng questioned the realization of cost savings from the new CRM system implementation, given the modest increase in operating expenses. He also asked for clarification on the components of the noncontrolling interest earnings.

Answer

Chief Transformation Officer Sarah MacDonald explained the CRM implementation was focused on broad customer benefits beyond just cost savings. CEO Roderick West added that any cost benefits will be reflected in overall O&M numbers. CFO Brian Chin clarified that noncontrolling interest earnings are primarily HLBV income, with a smaller portion from the Suralis stake in Chile.

Nelson Ng inquired about the progress of the Hydro business sales process, sought clarification on the components of rate base growth, and asked about potential transition expenses in 2025 from the Renewables sale.

Answer

Executive Chris Huskilson stated that the company will test the market for its Hydro assets in the first half of the year but will only proceed if the transaction is accretive. CFO Darren Myers clarified that the main pre-2024 addition to the rate base was the IT platform and no other large additions are expected. Interim CFO Brian Chin and CFO Darren Myers confirmed that some dissynergy costs from the Renewables sale will take time to work down in 2025, with some of these costs already reflected in Q4's run rate.

Nelson Ng from RBC Capital Markets requested clarification on the renewables sale's EBITDA multiple calculation and inquired about capital allocation priorities, specifically regarding debt reduction versus share buybacks.

Answer

CFO Darren Myers confirmed the EBITDA multiple is based on the run-rate EBITDA of fully constructed assets, excluding development expenses. Both Myers and CEO Chris Huskilson emphasized that the primary use of proceeds will be debt repayment to strengthen the balance sheet, although they are not ruling out share buybacks, prioritizing financial flexibility.

Nelson Ng sought to confirm the debt assumption for the Natgasoline JV and asked for details on New Zealand production, including what output would have been without gas diversions.

Answer

CFO & SVP - Finance Dean Richardson confirmed the ~$450 million debt figure for Natgasoline is still a good estimate. President, CEO & Director Rich Sumner explained that without diversions, the NZ plant would have run inefficiently at ~60% capacity, and that diversions to the electricity market require idling the plant as it's already at minimum operating rates.

Nelson Ng asked for details on the gas supply situation in New Zealand, particularly regarding gas diversions to the power sector and whether Methanex controls these diversions. He also requested an update on the key regulatory approvals still needed to close the OCI transaction.

Answer

Executive Rich Sumner explained that gas diversions in New Zealand are based on requests from the power sector, which are more likely during winter months, rather than a decision made by Methanex. He described the situation as dynamic. For the OCI deal, he confirmed that the company is progressing through the necessary regulatory review processes in both the U.S. and Europe.

Nelson Ng asked about the company's post-OCI acquisition gas hedging strategy and whether it would remain at 70% coverage. He also sought clarification on potential tariff impacts, specifically concerning trade flows to Mexico.

Answer

President and CEO Rich Sumner confirmed the plan is to extend their existing 70% gas hedging strategy to the OCI assets after the acquisition closes. He also clarified that Methanex has no significant trade flows into Mexico, so any tariffs there would not have a direct impact on the business, with the main risk being indirect from a potential global consumption slowdown.

Nelson Ng from RBC Capital Markets asked about potential one-time costs from the Trinidad plant transition, the possibility of an asset write-down for Atlas, and the economic structure of the Entropy carbon capture project for Methanex.

Answer

President and CEO Rich Sumner expects a seamless transition in Trinidad with no significant one-time costs and no current indication of an asset write-down. For the Entropy project, he clarified that commercial terms are still being finalized, but its economics will depend on the value of incremental conventional methanol and carbon credits, not on a 'blue methanol' price premium.

Nelson Ng asked for examples of other portfolio companies benefiting from the 'reindustrial revolution' trend and how this theme influences M&A strategy. He also inquired about the current M&A environment and whether it is a buyer's or seller's market.

Answer

Anuj Ranjan, CEO, confirmed the reindustrialization theme drives their M&A pipeline, citing the recent Chemelex acquisition, and identified DexKo as another portfolio company benefiting from these trends. He described the current market as enabling for transactions, with credit markets back and bid-ask spreads narrowing, stating that for BBU's specialized targets, the focus is on their ability to find value rather than a simple buyer's or seller's market.

Asked about the company's asset sale strategy, details of the new Imperial project in California, the timeline and funding for their California projects, and the overall funding plan.

Answer

The company confirmed that asset sales are part of their strategy. The Imperial project was an advanced development acquisition with milestone payments and a strong PPA. Timelines for California projects were provided (Coso finishing soon, others starting late 2024/early 2025). Funding will come from a mix of project-level debt, capital recycling, CAFD, and holding company leverage.