Brookfield Renewable Partners LP Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sean Steuart - TD Cowen - Analyst : Congratulations to Wyatt and Patrick. A couple of questions. Connor, with respect to the Microsoft framework agreement, you referenced exceeding targets. And I'm wondering if you can give a little more context there. Is that more capacity potentially being built into that agreement? Or is it an expedited development timeline? Any detail you can give us there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, BEP_u.TO - Q4 2024 Brookfield Renewable Partners LP Earnings Call

Question: Sean Steuart - TD Cowen - Analyst : Thanks for that. And further to that, it's been nine months since you announced that agreement. Can you give broader updates on efforts to replicate that type of framework deal with other corporates?

Question: Sean Steuart - TD Cowen - Analyst : Okay, thanks for that, Connor. And then just one last one. Asset recycling is an ongoing focus for funding. We've seen lots of valuation pressure for public equities, but it sounds like returns for your asset recycling initiatives have held in. Just interested in your perspective on how that spread for returns between asset recycling and organic development could shift. Those spreads have been strong for you over the last five years and in 2024, but any expectations on how that could shift in the near to midterm?

Question: Nelson Ng - RBC Capital Markets - Analyst : Congrats, Wyatt and Patrick. So first question, just sticking with the data center theme. So with their need for firm power and gas generation being more in favor generally in the market, Connor, what is your -- what are your thoughts in terms of developing or acquiring gas-fired generation? Can it be used to firm up your portfolio?

Question: Nelson Ng - RBC Capital Markets - Analyst : Great. That's great color, Connor. Next question. I understand your point in terms of renewables being the cheapest form of power even in the US. But with all the uncertainty in the US, can you just talk about how -- I think looking at your development pipeline, you have about, I think, 2 gigawatts of projects to be commissioned in 2025 and another like 3.4 gigawatts in '26. Can you just talk about how some of these contracts are structured? Just in terms of risk allocation, if there were any changes to the tax subsidies, are they essentially pass through? Or how are they structured in general? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, BEP_u.TO - Q4 2024 Brookfield Renewable Partners LP Earnings Call

Question: Nelson Ng - RBC Capital Markets - Analyst : Great. It's good to see that it's essentially a pass-through. And so one last question. You mentioned the public market versus private market and valuations. From your perspective, you've done a lot of acquisitions and developments in the past. Could you just comment on your capital allocation mix in the past few years compared to kind of what you see going forward? Your development pipeline is increasing, but obviously, with some of the valuations we've seen in the public market, do you expect to see -- do you expect to kind of step up your pace in the acquisition of public entities or investments in public entities?

Question: Robert Hope - Scotia Capital Inc. - Analyst : First question is on the development pipeline. When we take a look at the build-out of the renewables in the US in your pipeline, can you help us parse out how much is wind in the near term versus the long term, just given it doesn't appear that there's a little bit more uncertainty or perceived uncertainty on wind out there in the market? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, BEP_u.TO - Q4 2024 Brookfield Renewable Partners LP Earnings Call

Question: Robert Hope - Scotia Capital Inc. - Analyst : And then maybe just keeping with the US theme. In the letter, you speak about how there could be potential regulatory changes in the renewable sector in the US. However, adjustments to policies that have the greatest impact on your business, you don't think that those will occur. Can you maybe just add a little bit more color there? Like what changes do you think you could see in the US? And it seems to allude that you don't expect ITCs or PCCs to change?

Question: Rupert Merer - National Bank Financial - Analyst : Sorry, I might have missed that. I think it's maybe my turn, Rupert here. Just wanted to follow up on that last question. Now you've talked about the potential to offset the impact from tax credit changes. How much exposure do you think you have from tariffs and potential for higher equipment costs or higher steel costs? And how are you covered off on that?

Question: Rupert Merer - National Bank Financial - Analyst : Great. Thanks for the color. And second will be a follow-up on the data center market. So of course, we've seen a lot of market volatility driven by changing expectations for power demand growth from AI. When you talk to your corporate customers like Microsoft, how much of the data center growth that you see is driven by expectations for growth in demand from AI versus cloud and crypto? And are there any comments you can make on that changing landscape for AI power demand?

Question: Mark Jarvi - CIBC World Markets Inc. - Analyst : Maybe just following up on the tariff and the tax credit conversation. Has anything dramatically changed in terms of what you're hearing around that? And then if there is an adjustment and there's a period of sort of having to pass that through to customers, does that impact development opportunity to the next couple of years? Or do you think because of the Safe Harbor and things that are already going to go that that would be

Question: Mark Jarvi - CIBC World Markets Inc. - Analyst : Okay. And then just coming back to the Microsoft agreement. Are you able to share how many megawatts you've signed today? And like what's the expected amount of volume you have contracted by the end of this year? Just to sort of gauge progress through that 10.5 gigawatts.

Question: Mark Jarvi - CIBC World Markets Inc. - Analyst : Understood. And then, Connor, you mentioned about the fact that there's dislocation between private and public markets and there's some weakness in share prices. I'm sure you see the same thing on your own. So how do you view your own share price right now in terms of a place to allocate capital and buybacks versus opportunities and other investment opportunities?

Question: Mark Jarvi - CIBC World Markets Inc. - Analyst : Okay, thanks for your time. Congratulations to everyone on the new promotions.

Question: William Grippin - UBS Securities LLC - Analyst : I just wanted to see if you could provide a bit more color on some of the comments made in the press release regarding framework agreements with your suppliers. To what degree are those agreements enabling you to safe harbor your US development plans as it pertains to the PTC and ITC at that current levels? You've talked about passing higher costs through PPA rates, but I would think some of that friction or potential friction could be eliminated with safe harboring. So just trying to understand how you're thinking about that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 1:30PM, BEP_u.TO - Q4 2024 Brookfield Renewable Partners LP Earnings Call

Question: William Grippin - UBS Securities LLC - Analyst : Yeah, I hear it. I think the question was more focused on -- you specifically referenced agreements with your equipment suppliers.

Question: Anthony Crowdell - Mizuho Securities USA, LLC - Analyst : Connor, apologies, I jumped in a little late. So if you've answered this, sorry. Just -- are you surprised when we look at the pace of data center announcements and the size of them, it appears that the pace of maybe PPAs or contracts to supply electricity to these data centers seems like it's not matching up. I mean, do you see that in any thoughts or there may be a difference in tenure that the tech companies want to sign versus what the power generators want to offer?

Question: Anthony Crowdell - Mizuho Securities USA, LLC - Analyst : Great. Thanks. And this one is with apologies. I know you don't enjoy talking about other companies, but one of the other like renewable companies, smaller, different model, but a yieldco, name change, looks like it's really cut back their growth. Just curious if that's really just a separate isolated entity? Or is that maybe just the structure may be more challenging as we go forward?

Question: Anthony Crowdell - Mizuho Securities USA, LLC - Analyst : Great. Congrats, Patrick and Wyatt. Looking forward to working with you.