Brookfield Renewable Partners L.P. Limited Partnership Units

Ladies and gentlemen, thank you for standing by, and welcome to the BEP fourth quarter 2020 results conference call and webcast. At this time, all participant lines are in listen-only mode, so if you require operator assistance, please press star, then zero. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, then one. Please be advised that today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. Connor Teske, Chief Executive Officer. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2020 conference call. Before we begin, we would like to remind you that a copy of our news release, investor supplement, and letter to unit holders 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 CDAR, EDGAR, and our website. To kick off today's call, we would like to provide an outlook on our business and an update on our recent growth initiatives. Afterwards, Wyatt will provide an overview of our operating results, balance sheet and funding plan, as well as an ESG update. Following our remarks, we look forward to taking your questions and comments. 2020 was another year of significant growth for Brookfield Renewable. Despite the economic challenges around the world, we delivered record results and continue 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. Advancing the transition to a lower carbon future will require substantial capital, in excess of $100 trillion over the next three decades. It will also require significant operating expertise. Over 70% of the world's carbon emissions can be traced directly or indirectly back to power generation and the energy sector. This will translate into even greater build-out of renewables, and in various regions, a substantial conversion of carbon-intensive industries to cleaner and more sustainable methods of production. Our size, scale across multiple technologies, and depth of operating and development expertise continues to be a meaningful differentiator in sourcing growth opportunities. In 2020 alone, we invested nearly $4.6 billion of equity across various transactions. We will now spend the next few minutes going through a few key highlights for the fourth quarter. In the United States, we continue to build the largest distributed generation business in the country with over 2,000 megawatts of operating and development solar. This business helps commercial and industrial customers procure renewable power that is produced directly on site decarbonizing their own businesses by reducing their consumption from fossil fuel-based generation. In Canada, we invested in a large power producer looking to reduce its carbon emissions in order to meet federal carbon targets. Further, we also partnered with a utility to pursue green hydrogen opportunities, leveraging our existing fleet of operating hydro projects. In Europe, we are building new wind farms backed by long-term contracts with both leading global technology companies who are looking to support an increasing carbon-free electricity requirement for their green data centers, as well as global energy companies that are looking to transition their businesses. We are also investing in offshore wind development and scale. Lastly, In Brazil, we started construction on one of the largest greenfield solar projects in the world. This solar park will total 1,200 megawatts once completed and will sell power to commercial customers as well as utilities in the country. In the corridor, we also increased the size of our global development pipeline to approximately 23,000 megawatts. Development remains a core competitive advantage of ours. extending across solar, wind, hydro, and distributed generation and storage in every market we operate in. While we have a tremendous opportunity ahead of us, we remain focused on delivering strong shareholder results. We are pleased that over the last 20 years, we have generated an annualized 20% per share compounded total return, while maintaining a very strong balance sheet and a robust liquidity position. Equally as important, we continue to be a leader in accelerating decarbonization globally, and our total portfolio of approximately 42,000 megawatts of operating and underdevelopment assets, once completed, will help avoid approximately 56 million tons of CO2 emissions. or the equivalent of planting almost 1 billion trees. Next, we want to spend a few minutes walking through three recent transactions. First, in December, we agreed to acquire Exelon Generation Company's U.S. distributed generation business, comprising of 360 megawatts of operating generation across nearly 600 sites, with an additional over 700 megawatts of underdevelopment projects for $810 million. In 2017, we took our first step into distributed generation 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've expanded the business as demand for on-site generation continued to grow as both cost declines in solar technology and the decarbonization ambitions of commercial and industrial clients accelerated. With this acquisition, we will own one of the leading DG businesses in the United States 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 institutions a one-stop solution for both on- and off-site energy generation, storage and procurement, and energy efficiency services to help them achieve their decarbonization goals and transition to a more sustainable future. Secondly, and also in December, we agreed to acquire the Shepherd's Flat Wind Farm, an 845 megawatt fully contracted wind generation facility located in Oregon for $700 million. 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 experience in driving operational efficiencies while generating attractive returns. The third transaction to highlight was that 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 auction over 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, recently built contracted wind and solar assets, more than doubling our renewable energy capacity in the country. In conclusion, we'd like to finish by summarizing our activities in 2020. We advanced key commercial priorities, including delivering on almost four sorry, including delivering on almost $40 million of cost-saving initiatives, securing contracts to deliver 3,500 gigawatt hours of clean energy annually, which has the equivalent carbon avoided of planting almost 30 million trees. And we also signed a number of strategic contracts with key corporate off-takers. Also in 2020, we completed the merger of Terraform Power, both increasing and consolidating our activities in North America and Europe. During the year, we commissioned approximately 460 megawatts of new capacity and progressed almost 4,200 megawatts through construction and advanced stage permitting. And we also broadened our investor base with the creation of BEPSI and through the addition to several U.S. and global indices. Given our strong outlook and financial position, we are pleased to announce a 5% increase to our distribution to $1.22 per unit on an annualized basis. With that, we will now turn the call over to Wyatt to discuss our operating results and financial position.

Thank you, Connor. 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%. Turning to our segment results, 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 long-term average, and our reservoirs are well positioned for a strong first quarter, which underscores the benefit of our diverse portfolio. Next, 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. 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 as our portfolio continues to help commercial and industrial partners achieve their decarbonization goals and provides critical grid-stabilizing ancillary services and backup capacity required to address the increasing intermittency of greener electric grids. For example, our first hydro storage portfolio in the UK achieved five of its highest revenue days ever in the last couple of months as we sold essential stabilizing services to the UK power grid in response to high demand from cold weather and low wind and solar 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 J.P. Morgan'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 stand at eight years in Brazil and three 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 increasingly considering potential carbon pricing mechanisms for which our business is uniquely positioned to benefit. As examples, the current US administration has reestablished a working group that is expected to increase the social cost of carbon to more than $50 per ton. And in Canada, a carbon tax has been set at $30 per ton for 2020 and is set to increase almost six times to $170 by 2030. Carbon taxes or carbon pricing provide long-term support for growing wind and solar capacity, which also increases the value of our hydroelectric power facilities due to their dispatchable nature and the grid-stabilizing services they can provide. While we always prioritize contracted generation, for our perpetual hydroelectric facilities, we always look to ensure we retain upside optionality for when we believe prices will improve. Across our hydroelectric fleet in North America, we have contracts rolling off for assets that primarily deliver power to highly liquid markets in the U.S. Northeast. Fortunately, these contracts on a net basis deliver power at prices in the range of the current market. Therefore, on renewal, we expect minimal impact to our overall revenue while retaining meaningful potential upside should prices see future support from carbon pricing mechanisms. We also continue to advance our global development activities, including progressing almost 2,800 megawatts of construction diversified across distributed and utility-scale solar, wind, storage, and hydro in over 11 different countries. We are also progressing almost 1,400 megawatts of advanced stage projects through final permitting and contracting. In total, we expect these projects to contribute approximately $110 million in FFO on a run rate basis when completed. We also continue to maintain a robust financial position. We have approximately $3.3 billion of total available liquidity, and our investment grade balance sheet has no material maturities over the next five years, and almost 85% of our financings are non-recourse to Brookfield Renewable. During 2020, we continued to take advantage of the low interest rate environment and executed on almost $3.5 billion of investment-grade financing, extending our average corporate debt maturity to 14 years and reducing our borrowing costs by $5 million per year. We continue to advance our green financing strategy to benefit from growing demand for green securities and diversifying our investor base. Turning to ESG, operating a business with strong ESG principles is simply the right thing to do. And we have always believed that strong ESG practices drive long-term value to our business and create high barriers to entry. Inherent in our position as one of the largest publicly traded renewable energy companies is the understanding that climate change possesses a serious threat to communities, businesses, and ecosystems around the world. We have established ourselves as one of the preeminent renewable franchises and are playing a critical role in addressing climate change and reducing carbon across the world by shifting power generation, which accounts for more than 70% of global carbon emissions to a sustainable pathway for the future. To demonstrate our commitment, we were proud to announce in our second ESG report, which was published today, our ambition to double our avoided carbon emissions by 2030. To summarize, with our scale, track record, and global capabilities, We are well situated to partner with governments and businesses to help them achieve their goal of greening the global electricity grid. We believe the prospects for the growth of our business are better than they have ever been, and we look forward to further opportunities to provide capital and solutions to drive decarbonization. That concludes our formal remarks for today's call. Thank you for joining us this morning. With that, I'll pass it back to our operator for questions.