All amounts in U.S. dollars unless otherwise indicated
BROOKFIELD, News, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable” or "BEP") today reported financial results for the three and twelve months ended December 31, 2020.
“2020 was another year of significant growth for our business. Despite the economic challenges around the world, we delivered record results and continued to broaden our operations, as we look forward to a multi-decade opportunity to advance decarbonization and assist with the transition of global electricity grids to a more sustainable future,” said Connor Teskey, CEO of Brookfield Renewable. “Our size, scale across multiple technologies, and depth of operating and development expertise continues to be a meaningful differentiator in sourcing growth opportunities, and executing large, high value investments.”
Financial Results
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| Millions (except per unit or otherwise noted) | For the three months ended December 31 | | For the twelve months ended December 31 |
| Unaudited | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| Total generation (GWh) | | | | | | | |
| – Long-term average generation | 14,333 | | | 13,850 | | | 57,457 | | | 53,926 | |
| – Actual generation | 13,248 | | | 12,465 | | | 52,782 | | | 52,560 | |
| Brookfield Renewable Partner's share (GWh) | | | | | | | |
| – Long-term average generation | 7,354 | | | 6,561 | | | 27,998 | | | 26,189 | |
| – Actual generation | 6,583 | | | 5,977 | | | 26,052 | | | 26,038 | |
| Net loss attributable to Unitholders | $ | (120 | ) | | $ | (74 | ) | | $ | (304 | ) | | $ | (103 | ) |
| Per LP unit(1) | (0.22 | ) | | (0.15 | ) | | (0.61 | ) | | (0.26 | ) |
| Funds From Operations (FFO)(2) | 201 | | | 171 | | | 807 | | | 761 | |
| Per Unit(1)(2)(3) | 0.31 | | | 0.29 | | | 1.32 | | | 1.30 | |
| Normalized Funds From Operations (FFO)(2)(4) | 265 | | | 167 | | | 924 | | | 725 | |
| Per Unit(1)(2)(3)(4) | 0.41 | | | 0.28 | | | 1.52 | | | 1.24 | |
| (1) | Adjusted for the 3-for-2 Unit split effective December 11, 2020. |
| (2) | Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”. |
| (3) | Average Units outstanding for the three and twelve months ended December 31, 2020 were 645.5 million and 609.5 million, respectively (2019: 583.6 million and 583.5 million, respectively), being inclusive of our LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and general partner interest. The actual LP units outstanding at December 31, 2020 were 645.5 million (2019: 466.9 million). |
| (4) | Normalized FFO assumes long-term average generation in all segments except the Brazil and Colombia hydroelectric segments and uses 2019 foreign currency rates. For the three and twelve months ended December 31, 2020, the change related to long-term average generation totaled $41 million and $75 million, respectively (2019: $(4) million and $(36) million, respectively) and the change related to foreign currency totaled $23 million and $42 million, respectively. |
Brookfield Renewable reported FFO of $807 million ($1.32 per LP unit) for the twelve months ended December 31, 2020, a 6% increase from the prior year supported by contributions from growth initiatives and strong asset availability. After deducting non-cash depreciation, our Net loss attributable to Unitholders for the twelve months ended December 31, 2020 was $304 million or $0.61 per LP unit.
Highlights
- Advanced key commercial priorities, including delivering on almost $40 million in cost saving initiatives ($17 million net to Brookfield Renewable), securing contracts to deliver 3,500 gigawatt hours of clean energy annually (which has the equivalent carbon avoidance of planting almost 30 million trees), and signing a number of strategic contracts with corporate offtakers;
- Agreed to invest ~$4.6 billion (~$2.5 billion net to Brookfield Renewable) of equity across ten transactions, deploying capital in every major market we operate;
- Completed the merger of TerraForm Power, consolidating our activities in North America and Europe;
- Commissioned approximately 460 megawatts of new capacity and progressed close to 4,200 megawatts through construction and advanced-stage permitting, and increase the size of our development pipeline to over 23,000 megawatts;
- Maintained a strong balance sheet and bolstered our liquidity, with over $3.3 billion of available liquidity, raising over $1 billion from asset recycling initiatives, closing $3.4 billion of investment-grade financings and extending the average duration of our corporate debt from 10 to 14 years; and
- Broadened our investor base with the creation of BEPC and through our addition to several U.S. and global indices.
Update on Growth Initiatives
In December, we agreed to acquire Exelon Generation Company’s U.S. distributed generation (DG) business comprising 360 megawatts of operating generation across nearly 600 sites with an additional over 700 megawatts under development for $810 million (approximately $200 million net to Brookfield Renewable). In 2017, we took our first step into DG with an acquisition after having identified a significant opportunity to build a high-quality scale business in a highly fragmented and rapidly growing market. Since then, through both acquisitions and organic initiatives, we have expanded the business as demand for on-site generation continued to grow as cost declines in solar technology and decarbonization ambitions of commercial and industrial clients accelerated.
With this acquisition, we will own one of the leading distributed generation businesses in the U.S., with deep operating, development and origination capabilities, and a 2,000 megawatt portfolio that generates high-quality contracted cash flows that are diversified by geography and customer. This investment represents the continuation of this strategy and furthers our goal of offering corporates and other institutions a ‘one-stop’ solution for on- and off-site energy generation, storage and procurement and energy efficiency services to help them achieve their decarbonization objectives and transition to a lower carbon future.
In December, we agreed to acquire the Shepherds Flat wind farm, an 845 megawatt fully contracted wind generation facility located in Oregon for $700 million ($175 million net to Brookfield Renewable). The project, which is fully contracted with a high-quality offtaker, is one of the largest onshore wind projects in the United States and includes an attractive repowering opportunity that we expect to deliver by the end of 2022. This repowering opportunity is one of the largest in the world and is expected to increase total generation by approximately 25% increasing the clean energy produced by approximately 400 gigawatt hours annually. Having the expertise to undertake a project of this size showcases our decades of expertise to drive operational efficiencies while generating attractive returns.
We also continue to use our differentiated operating and commercial capabilities to acquire ready-to-build development assets in Brazil at premium returns. In December, we agreed to acquire a 270 megawatt late-stage development wind project, including an option over a further 200 megawatt expansion. Ahead of construction, we intend to leverage our energy marketing capabilities to contract the project, which is located in one of the highest wind regions in the country. Our relationships with global turbine manufacturers, as one of the largest acquirers globally, should enable us to outperform on equipment procurement, installation and operating costs. With this latest addition, in the last 18-months, we have acquired a collection of projects that once constructed, will represent a combined portfolio of over 2,000 megawatts of long-term contracted wind and solar assets, more than doubling our renewable energy capacity in the country.
Results from Operations
In 2020, we generated FFO of $807 million, a 6% increase from prior year, as the business benefited from recent acquisitions, strong underlying asset availability, and execution on organic growth initiatives. On a normalized basis, our per unit results are up 23%.
During the year, our hydroelectric segment delivered FFO of $662 million. Although we experienced some drier conditions across our fleet, particularly in regions with higher value contracts, overall generation for the year was in line with the long-term average and our reservoirs are well positioned for a strong first quarter, which underscores the benefit of our diverse portfolio.
Our wind and solar segments continue to generate stable revenues and benefit from the diversification of our fleet and highly contracted cash flows with long duration power purchase agreements. During the year, these segments generated a combined $376 million of FFO, representing a 51% increase over the prior year, as we benefited from contributions from acquisitions, and approximately 440 megawatts of solar and wind projects commissioned during the year.
Our energy transition segment generated $103 million of FFO during the year as our portfolio continues to help commercial and industrial partners achieve their decarbonization goals and provides critical grid-stabilizing ancillary services and back-up capacity required to address the increasing intermittency of greener electric grids. For example, our First Hydro storage portfolio achieved five of its highest revenue days ever in the last couple months as we sold essential stabilizing services to the UK power grid in response to high demand from cold weather and intermittently low wind generation levels.
Across our portfolio, we continue to focus on partnering with a broad range of customers in their decarbonization efforts. During the year, we executed agreements to supply 100% renewable energy to one of the first planned industrial-scale green hydrogen production plants in North America with Plug Power and over 90% of JPMorgan’s real estate operations in New York State. In South America, our focus continues to be on extending the average duration of our power purchase agreements, which today stand at 8 years in Brazil and 3 years in Colombia. We signed two long-term inflation-linked power purchase agreements for our recently acquired solar development projects in Brazil, substantially contracting these assets.
In recent months, many governments in our target markets have outlined new policies to address climate change. In North America, where the majority of our hydro fleet is located, governments are increa
