Brookfield Renewable Partners L.P. Limited Partnership Units

Thank you for standing by, and welcome to the BEP second quarter 2021 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. It is now my pleasure to introduce CEO of Brookfield Renewable, Connor Teske.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our second quarter 2021 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 also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risk, and our future results may differ materially. For further information, you are encouraged to review our regulatory filings available on CDAR, EDGAR, and our website. To kick off today's call, we will provide an outlook on the business, and an update on recent growth initiatives. After our initial remarks, Wyatt will provide an update on Brookfield Renewable Corporation, an overview of our operating results, as well as our balance sheet and liquidity, after which we look forward to taking your questions. The tailwinds for renewables continue to accelerate as stakeholders around the world increasingly focus on the global imperative to decarbonize. This is driving increased demand for green energy and other clean solutions. It should come as no surprise that there is both a growing investment opportunity as well as increasing amounts of capital being allocated towards the sector. As one of the few businesses with the scale, track record, and global capabilities to both partner with governments and businesses and also invest to help them achieve their decarbonization goals, we believe we have a great runway ahead of us. We have continued to earn excellent returns in these market conditions. We have remained focused on opportunities where we can leverage our global reach, operating and development expertise, and scale access to capital. And as industry tailwinds accelerate, the number of scale, value-add opportunities that favor investors with our skill set is also increasing. We will now walk through a number of highlights for the quarter. We generated FFO of $268 million dollars or 42 cents per unit, a 23% increase on a normalized per unit basis over the same period in the prior year. As our assets continue to perform well with high levels of asset availability, and we benefit from growth from both new acquisitions and a number of our development assets coming online. We've signed 28 agreements. for approximately 800 gigawatt hours of renewable generation with high-quality corporate off-takers across all major industries. Our momentum with corporate contracting continues to grow and demonstrates our leadership in a rapidly growing industry trend. We progressed approximately 7,500 megawatts of development projects through construction and advanced permitting, and it added approximately 4,000 megawatts to our global development pipeline, which is now over 30,000 megawatts around the world. Year to date, we have invested or agreed to invest approximately $1.9 billion, or approximately $500 million net to Brookfield Renewable, of equity across a range of transactions. Our balance sheet remains robust, with almost $3.3 billion of available liquidity and no meaningful near-term maturities. And finally, we raised approximately $1.3 billion, or over $650 million net to Brookfield Renewable, from asset recycling and strategic up-financing activities so far this year. Now turning our attention to some recent growth initiatives. As more capital continues to flow into renewable energy and decarbonization solutions, our approach to growth will continue to favor those opportunities that allow us to utilize our strengths, investing for value and leveraging our operating capabilities to drive cash flow growth. We recently executed several agreements and transactions that highlight this approach. In June, we commenced the repowering of the fully contracted 845 megawatt Shepherd's Flat wind project, which we acquired earlier this year. Shepherd's Flat, which is located in the United States, is one of the largest repowering projects in the world. We will replace the turbine hardware with longer rotors and more efficient equipment while maintaining the rest of the infrastructure. This is expected to increase production by approximately 25% generating 400 gigawatt hours of additional clean energy annually, while also meaningfully extending the asset's useful life. Furthermore, given that the cost is only a fraction of a comparable greenfield project and the enhanced generation can support a more robust capital structure, the repowering requires no additional equity from us. meaning that the investment will generate attractive mid- to high-teens returns. This repowering is an example of how we capitalize on our competitive advantages in the current market environment. By the time we complete the repowering by the end of 2022, it is expected that 320 turbines will have been retrofitted with rotors measuring almost 130 meters and other technologically advanced equipment as we continue to deliver power and receive revenues under the current power purchase agreement. Doing so requires the combination of both our operating capabilities as well as our position as one of the leading renewable power platforms in the world. We have leveraged our existing relationships with equipment suppliers, financing partners, and power off-takes to largely de-risk this project. With an estimated 200 gigawatts of global wind capacity reaching 15 years of age within the next five years, the global market for repowerings is large. Shepard's Flat is by no means the only opportunity, and this is only one segment where we continue to grow our business at attractive returns. Given our global reach and operating capabilities, we expect to capitalize on scale opportunities to repower other projects, both across our existing portfolio as well as those we acquire to deliver attractive returns for our investors. This quarter, we also signed a strategic collaboration agreement with Amazon to develop new renewable projects supported by power purchase agreements and to work together on additional green energy opportunities in the future. This agreement, with the world's largest corporate buyer of renewable power, will leverage our deep operating capabilities and local teams in North America, Europe, Brazil, and Asia to support the construction of projects from our 31,000 megawatt development pipeline. We are excited to collaborate with Amazon and support them in achieving their climate goals while at the same time helping to transition global electricity grids to greener energy. Furthermore, We agreed, with trained technologies, to jointly pursue and offer decarbonization as a service for commercial, industrial, and public sector customers. This will comprise of energy-efficient retrofits and upgrades of building energy infrastructure, along with captive distributed solar, energy storage, and other power generation across North America. The agreement leverages our leading U.S. distributed generation business and trains leading energy efficiency, engineering, and project development experience to jointly develop and implement new customer opportunities. The decarbonization solutions provided will help customers meet sustainability targets while reducing operating costs through upgrading critical energy infrastructure and installing on-site renewable energy. In our Polish renewables business, we made significant progress on our development activities. We secured 25-year contracts to support the build-out of almost 1.5 gigawatts of offshore wind projects at attractive prices escalating with inflation with no basis or curtailment risk. As we have stated previously, we believe these are some of the most attractive contract structures available in the global offshore wind sector. We are now focused on executing construction activities with the goal of delivering the facilities starting in 2025. In addition, we are on track to deliver our 200 megawatt under construction onshore wind portfolio by next year and are advancing opportunities to grow our onshore wind and solar footprint in the country. To fund these growth initiatives, shareholders have agreed to capital increases required over the next two years providing the framework for us to invest an additional 150 million euros or approximately 50 million dollars net to Brookfield Renewable and increase our stake in the business to almost 40 percent. In Brazil, our construction activities continue to progress on budget and on schedule across our almost two gigawatt portfolio of under construction wind and solar projects. Recently, We completed construction activities at our approximately 300 megawatt solar project ahead of schedule and under budget. Our global procurement platform and construction capabilities have positioned us well, and we are on track to deliver an additional approximately 900 megawatts of fully contracted projects in 2022. In China, alongside Apple's China Renewable Energy Fund, which was raised by Apple and its local suppliers to advance their collective transition to net zero in the country, we agreed to acquire a 55% stake in a 213 megawatt contracted portfolio of wind assets for $60 million, or approximately $15 million net to Brookfield Renewable. This transaction continues to expand and diversify our platform in China, providing a path to continue to prudently grow our capacity in the country. This acquisition is expected to close in the third quarter. And lastly, in India, we agreed to invest $130 million, or $35 million net to Brookfield Renewable, across two transactions totaling 900 megawatts of capacity. The first is with a local solar developer from whom we acquired assets in 2019. We will acquire a 450 megawatt fully contracted ready to build solar project. This opportunity is just the first potential transaction of part of a 1.7 gigawatt development pipeline that we are developing in a joint venture with our partners where they undertake the development activities and we have the option to acquire the projects once they are fully permitted and ready to begin construction. The second transaction is with a large Indian solar developer that was one of the underlying borrowers in a portfolio of loans we acquired in late 2020. The investment gives us the right to acquire a 450 megawatt fully contracted solar project one year following commissioning once the project has been substantially de-risked. With that, I'll turn the call over to Wyatt to discuss our operating results and financial position.

Thank you, Connor. Before I discuss our operating results and financial position, I want to make a few brief comments on Brookfield Renewable Corporation, or BEPC. It has been 12 months since we spun out this corporate entity. In that time, it has achieved many of the goals we set at launch, including welcoming almost 250 new institutional investors, and the addition to many indices, including the Russell 1000, the MSCI Canada, and the S&P Global Clean Energy Index. We were able to offer BEPSI shares as consideration in the privatization of Terraform Power, and we expanded the public float since launch by approximately 300%. We are very pleased with the positive market reception And looking forward, we expect that Pepsi will continue to offer investors an additional way to access our globally leading portfolio of renewable and decarbonization assets, broadening our investor base, and enhancing the liquidity of our securities. Turning to operating results, during the second quarter, we generated FFO of $268 million, or 42 cents per unit. as our business benefited from recent acquisitions, strong asset availability, and margin-enhancing initiatives. On a normalized basis, our per-unit results were up 23% year over year. During the quarter, our hydroelectric segment delivered FFO of $154 million. Despite generation for the quarter coming in below the long-term average, The portfolio continues to exhibit strong cash flow resiliency given the increasingly diversified asset base and contract profile. As we have reiterated previously, resource cyclicality is expected but does not impact how we manage the business. Our focus remains on mitigating exposure to any single resource, market, or counterparty by continuously diversifying and contracting the business while prudently managing the assets. Securing contracts that value the uniqueness of our fleet as a generator of dispatchable clean electricity and ancillary services further bolsters our portfolio against inevitable variability. Brazil has been impacted by a drier than normal rainy season this year. particularly in the southeastern region of the country, and reservoirs are well below long-term average. As a result, spot prices have increased significantly as the grid operator has been forced to dispatch higher-priced thermal generation, and there is modest risk of energy rationing in the country. Our portfolio is well positioned in this environment. we have little to no risk of being short of our power delivery obligations for the rest of this year and 2022, and we could potentially realize very strong pricing on contracts we sign for next year. Our wind and solar segments generated a combined $178 million of FFO. As we continue to generate stable revenues from these assets and benefit from the diversification of our fleet, and highly contracted cash flows with long-duration power purchase agreements. Further, to take advantage of the strong pricing environment in Brazil, we executed on a regulatory mechanism to uncontract our generation for the year of 2022 from our approximately 300 megawatt solar development project in the country. Concurrently, we executed on new contracts for this generation in the free market at double the power purchase agreement price generating an additional 135 million Brazilian Reais, or $27 million, of revenue from the project. Our energy transition segment generated $44 million of FFO during the quarter, as our portfolio continues to grow while we assist commercial and industrial partners achieve their decarbonization goals and provide critical grid stabilizing and siloing services and backup capacity required to address the increasing intermittency of greener electricity grids. Our financial position continues to be strong. We have approximately $3.3 billion of available liquidity. Our investment grade balance sheet has no meaningful near-term maturities, and approximately 90% of our financings are non-recourse to Brookfield Renewable. Recently, Fitch initiated coverage of our business assigning a BBB positive rating, which is consistent with our existing rating from S&P. During the quarter, we continued to take advantage of the low interest rate environment and executed on approximately $1.5 billion of investment-grade financings across the business. We also continued to execute on several initiatives to further bolster our liquidity and support growth. Recently, we raised over $850 million or approximately $410 million net to Brookfield Renewable of equity proceeds from capital recycling initiatives. Looking forward, we expect to continue to generate meaningful proceeds from strategic up-financing and capital recycling initiatives, so we are not relying on capital markets to fund the growth of our business. Looking ahead, we continue to focus on growing our business and executing on our key operational priorities including maintaining a robust balance sheet and access to diverse sources of capital, and surfacing value through enhanced cash flows from our existing portfolio. We remain committed to helping our customers achieve their decarbonization goals, and in the process, earn our investors a strong total return of 12% to 15% over the long term. On behalf of the Board and management of Brookfield Renewable, we thank all our unit holders and shareholders for their ongoing support and look forward to connecting with you at our annual investor day, which is scheduled to take place on the 21st of September. That concludes our formal remarks for today's call. Thank you for joining us this morning. And with that, I'll pass it back to our operator for questions.