Brookfield Renewable Partners L.P. Limited Partnership Units

Good day and thank you for standing by. Welcome to the Brookfield Renewable Partners third quarter 2021 results conference call and webcast. At this time, all participant lines are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star then one on your telephone keypad. Please be advised today's conference may be recorded. If you require operator assistance during the call, please press star then zero. I'd now like to hand the conference over to your host today, Conor Teske, Chief Executive Officer. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our third 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 risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on CDAR, EDGAR, and on our website. To kick off today's call, we will first provide an update on the business and our recent growth initiatives. Next, Wyatt will provide an overview of our operating results, as well as our balance sheet and liquidity. And following our remarks, we look forward to taking your questions. We continue to advance our goal of establishing Brookfield Renewable as one of the preeminent clean energy companies in the world. With approximately 56,000 megawatts of operating and development assets on five continents diversified across all major renewable technologies, we are on the ground in every major global market, providing our platform the flexibility to move capital across geographies to the opportunities with the best risk-adjusted returns. Our balance sheet has significant access to capital to invest in the largest and most attractive growth opportunities, with over $3 billion of available liquidity plus access to our sovereign and institutional client capital to enable us to grow. The stability of our business is underpinned by high-quality inflation-linked contracted cash flows that are diversified by both technology and region across a high-quality customer base, with a weighted average remaining contract duration of 14 years. Over the last 50 years, there were a handful of global energy supermajors that delivered sustained profitable growth. These businesses were defined by a global presence, operating capabilities, and the scale to execute on the most attractive opportunities around the world. As decarbonization increasingly becomes an objective of the global economy and more and more businesses look to power their operations and their products with green electricity, we believe that the next generation of energy supermajors will have similar attributes to those of the past, but with platforms and capabilities focused on clean energy. With our global reach, our operating, development, and power marketing capabilities, and our scale, we believe we are uniquely positioned to capture the growing decarbonization opportunity, and we recently increased our annual target for investing equity capital into growth to $1.2 billion. Throughout our platform, we are consistently executing business plans that not only enhance and de-risk our existing assets, but also create future growth and development opportunities. Accordingly, while the outlook to deploy capital through M&A remains robust, we also benefit from a number of fully financed organic growth projects that are already under construction and contracted. We are fortunate to have operating capabilities to enhance the scale of these ongoing growth opportunities to further supplement our expansion through acquisitions. As a result, we are well positioned to continue to deliver strong FFO per unit growth to support our long-term distribution target of 5% to 9% annually. While we expect to continue to deploy increasing amounts of capital through acquisitions, we believe that we can achieve the upper end of our growth targets through organic initiatives alone. This comes from inflation escalation in our contracts, margin expansion through revenue growth and cost reduction initiatives, and the building out of our growing development pipeline, including 8 gigawatts of capacity over the next three years at premium returns. We will now walk you through the highlights for the quarter. We generated record third quarter funds from operation of $210 million, or 33% cents per unit, a 32% increase over the same period in the prior year, as our assets continue to perform well with high levels of asset availability and contributions from new acquisitions. We agreed to 19 power purchase agreements for approximately 1,300 gigawatt hours of renewable generation with corporate offtakers across major industries. We progressed approximately 8,000 megawatts of development projects through construction and advanced stage permitting. We also added approximately 5,000 megawatts to our global development pipeline, which is now approximately 36,000 megawatts. We invested or agreed to invest approximately $2.4 billion or $600 million net to Brookfield Renewable of equity across a range of transactions year-to-date. And finally, we have maintained a robust balance sheet with over $3.3 billion of available liquidity and no meaningful near-term maturities. Now, turning to our growth initiatives. This quarter, we executed on several growth opportunities that demonstrate the value of our global platform, deploying capital across multiple technologies and jurisdictions, enhancing our position as a leading diversified clean energy business. We continue to grow our leading distributed generation business both in the United States and globally, positioning us as a partner of choice to companies and other institutions by providing a one-stop solution for on-site and off-site energy generation, storage, and efficiency services. In the U.S., We have grown our distributed generation business by almost five times since the beginning of the year to 3,600 megawatts of operating and development assets. We accomplished this through a combination of acquisitions, both larger scale platforms and smaller tuck-ins, and organic growth initiatives such as channel partnerships, joint development agreements, and our recently announced cooperation agreement with Trane Technologies. Recently, in Europe and Latin America, we agreed to acquire interest in portfolios of an aggregate 785 megawatts of operating and development assets for a total investment of $250 million, or $60 million net to Brookfield Renewable. Further, in China, our rooftop solar joint venture with a local partner has continued its strong growth momentum since and is expected to have 400 megawatts of operating assets by the end of 2021, in addition to a further development pipeline of over 1 gigawatt in the region. As one of the only globally diversified DG platforms, we believe we are uniquely positioned to leverage our customer relationships and economies of scale on a global basis to maximize each of our regional businesses and continue our current track record of substantial growth. In addition, we signed an agreement to acquire three late-stage solar development projects in the U.S., which have a total installed capacity of 475 megawatts. We will be closing on each of these projects once they have been significantly de-risked, which is expected over the next 12 to 24 months. Concurrently, we are progressing PPA discussions with a large corporate buyer of renewable power to fully contract the generation. The projects are expected to be commissioned by 2024, and we expect to invest $135 million of equity or $35 million net to Brookfield Renewable. We are also in the early stages of seeing meaningful growth in emerging technologies. One that we are following very closely is green hydrogen. Green hydrogen plays to the strengths that have defined our business for decades. knowledge of global power markets, clean energy expertise, large-scale capital, and best-in-class operating and development capabilities. Although still in its relative infancy, the potential market for green hydrogen is significant due to its storage capabilities and the ability to address harder-to-abate emissions coming from the heavy-duty and industrial sectors such as long-haul transport and steel production. And while green hydrogen is not yet economic on a widespread basis, we are increasingly seeing specific opportunities to invest at attractive risk-adjusted returns. We are currently advancing almost one gigawatt of green hydrogen opportunities, positioning us well to be a first mover so that we can invest in scale as the cost curve continues to come down and the technology is adopted more broadly. In addition, In addition to our agreement to fully energize a hydrogen company's planned green hydrogen production plant in Pennsylvania, one of the first industrial-scale facilities in North America, we are also progressing one of Canada's largest green hydrogen projects, providing green hydrogen to a pipeline operator as the off-taker for injection into its natural gas network in Quebec, with construction targeted to start next year. With that, I'll turn the call over to Wyatt to discuss our operating results and financial position.

Thank you, Connor. In the third quarter, we generated FFO of $210 million, or 33 cents per unit, a 32% year-over-year increase as our business benefited from recent acquisitions and strong asset availability. Globally, we are seeing elevated power prices, as economies around the world ramp back up. Our business is well positioned in this environment. Although our portfolio is almost entirely contracted, we have been able to benefit across our hydroelectric and storage businesses, given the ability of these facilities to provide dispatchable, carbon-free baseload generation. For instance, in the UK, where below-average wind resource and elevated natural gas prices drove higher and more volatile power prices, our pumped hydro facility delivered record results during the quarter as we sold critical balancing and stabilizing services to the grid. In Brazil, where the country continues to deal with historically dry conditions, our production is well matched to our delivery obligations but we are opportunistically leveraging government power procurement opportunities to recontract our assets to take advantage of the high-price environment. And more broadly, across our global portfolio, we have taken advantage of the strong pricing environment to both lock in attractive all-in pricing for our hydro facilities that are available for recontracting, as well as to secure attractive long-term PPAs for new wind and solar development projects. During the quarter, our hydroelectric segment delivered FFO of $142 million, with favorable generation in the U.S. and Colombia, offset by below average generation in Brazil and Canada. The portfolio continues to exhibit strong, resilient cash flows, given the increasingly diversified asset base and high asset availability. Our wind and solar segments generated a combined $130 million of FFO. We continue to generate stable revenues from these assets and benefit from the growth in the business and highly contracted nature of the cash flows with long-duration power purchase agreements. Our energy transition segment generated $48 million of FFO during the quarter as our portfolio continues to grow while we assist our commercial and industrial partners achieve their decarbonization goals and become their partner of choice for energy transition solutions. Despite widespread challenges to global supply chain, we are making good progress executing on our approximately 7,000 megawatt construction pipeline. In the U.S., our wind repowering projects are progressing well, At our New York project, over half of the turbines are operating, and we expect to complete the remainder by the end of the year. At our Shepherd's Flat project in Oregon, the repowering equipment is on site, and we have begun replacing the turbines in line with our plan to deliver the project by the end of next year. In Brazil, during the quarter, we delivered our 360-megawatt Alex Solar project ahead of schedule, and construction is progressing on our 1,200 megawatt Wanuba solar project. We also expect to start construction on our 270 megawatt Brazilian wind project in the first half of 2022. Finally, in Poland, following the award of an inflation-linked 25-year contract for 1,400 megawatts of offshore wind capacity, we are finalizing the environmental permits and have begun to procure turbines. These opportunities represent only a subset of the organic growth initiatives that we expect to execute in the coming years. Next, looking at our balance sheet and liquidity, 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. During the quarter, we continued to take advantage of low interest rates and executed on almost $2 billion of investment-grade financing and other financing initiatives across the business. We also continued to execute on several initiatives to further bolster our liquidity and support growth. Recently, we raised approximately $700 million of proceeds from strategic up-financings and capital recycling initiatives, including agreeing to the sale of our Mexican assets developed by Exelio, our global solar developer, for $400 million, more than doubling our invested capital over our two-year hold period. Looking forward, we expect to continue to generate meaningful proceeds from these initiatives as the market for de-risk renewables continues to be strong and the positive price environment and increasing demand for clean baseload power has created significant contracting and financing capacity within our hydro fleet. With a robust pipeline of capital deployment opportunities, we remain committed to a growth plan that is not reliant on equity funding. We continue to focus on growing and diversifying our business and executing on our key operational priorities, including maintaining a robust balance sheet, access to diverse sources of capital, and creating value through enhanced cash flows from our existing portfolio. We remain committed to helping our partners achieve their decarbonization goals, and in the process, earning our investors a strong total return of 12% to 15% over the long term. On behalf of the board and management, we thank all of our unit holders and shareholders for their ongoing support. 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 the operator for questions.