Brookfield Renewable Partners LP Aktie

Thank you for standing by, and welcome to the First Quarter 2026 Brookfield Renewable Earnings Results and Webcast. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Connor Teskey. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us for our first quarter 2026 conference call. Before we begin, we would like to remind you that a copy of our news release and investor supplement 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 SEDAR+, EDGAR and on our website.

On today's call, we will review our first quarter 2026 performance and discuss what we are seeing today in the broader energy market and what this means for our business. We will then turn the call over to Jehangir Vevaina, our Chief Investment Officer, to discuss our approach to growth through M&A and our recently announced agreement to acquire Boralex. Patrick will then conclude the call with a discussion of our operating results, financial position and funding activities, along with the potential simplification of our structure to a single listed corporate entity. Following our comments, we look forward to taking your questions.

We had a very strong start to the year, delivering record financial results, advancing key strategic initiatives, and further strengthening our balance sheet. We generated FFO of $375 million, up 19% year-over-year and 15% on a per unit basis, equating to $0.55 per unit. We deployed our committed $2.2 billion into growth or $550 million net to BEP highlighted by the privatization of Boralex, a leading global renewable platform with a significant operating base and a large and derisked development pipeline.

From a development perspective, we brought online 1.8 gigawatts of new capacity in the quarter and contracted 1.7 gigawatts of development projects from our advanced development pipeline. In addition, we continue to scale our capital recycling program selling assets that will generate nearly $3 billion of proceeds or over $800 million net to BEP at returns in line with our targets.

This includes the launch of Northview Energy which represents a new and recurring way, we are monetizing our derisked assets in North America to some of the world's largest and most sophisticated private investors. We did all of this while continuing to strengthen our balance sheet, opportunistically executing almost $4 billion of financings and ending the quarter with over $4.7 billion of available liquidity.

Now taking a step back and looking at the global energy market today, this past quarter, we saw the disruption with the outbreak of the conflict in the Middle East. First and foremost, the safety and well-being of our employees and our customers in the region remains our highest priority. We are happy to report that our teams are safe and our limited investments in the region today have not been directly impacted and are all continuing to perform. While some markets are experiencing higher energy prices as a result of the conflict, our business is largely contracted, and therefore, we do not expect a material impact on our cash flows in the near term.

What the conflict has done is put a renewed spotlight on the importance of energy security. Reliable power is the essential foundation for economic growth and without a secure, consistent and affordable supply corporations and governments cannot confidently commit to large-scale capital investments that underpin broader economic development. This is leading to governments and corporates to increasingly prioritize energy security and domestic supply, reinforcing investments in renewables, which are the lowest cost form of generation to meet demand today and do not rely on an imported fuel and nuclear, which can meet the growing need for large-scale baseload generation while offering a high degree of energy security with the ability to store significant amounts of fuel on site.

Against this backdrop of accelerating energy demand and an increased focus on energy security, we are bringing on more new renewable generation capacity than ever before. In the last 12 months alone, we commissioned over 9 gigawatts of new capacity which is nearly double the capacity we delivered just 2 years ago, and we remain on track to increase our annual commissioning run rate to approximately 10 gigawatts per year in 2027. Another great example of how accelerating energy demand is helping drive growth in our business is with our recently announced partnership with the U.S. government to accelerate the build-out of new Westinghouse large-scale nuclear reactors in the United States.

During the quarter, we made good progress advancing the development of new utility scale reactors in the U.S. with a focus on progressing key work streams, including the ordering of long lead time equipment for Westinghouse's proprietary AP1000 technology. In summary, the current environment is defined by the convergence of accelerating energy demand driven by electrification, reindustrialization and digitalization and an increased focus on energy security. Together, these dynamics are driving the need for an any-and-all approach to energy supply and creating one of the strongest backdrops we have seen for the sector and in turn, our business.

Those with operating assets and scale development capabilities stand to benefit the most. And we believe we are a leader on both fronts. Importantly, capturing this opportunity also requires significant access to capital, which has always been a key differentiator for our business. And in this regard, we believe we are stronger today than at any point in our history. As a result, we remain well positioned to deliver outsized earnings growth in the near term and more importantly, we are better positioned than ever to generate significant value for our investors over the long term.

With that, we will turn the call over to Jay to discuss our approach to growth and our recently announced agreement to acquire Boralex.

Thank you, Connor, and good morning, everyone. In the current environment, characterized by accelerating power demand and an increased focus on energy security, we're seeing some of the most compelling investment opportunities for our franchise to date both through continued execution of our 80 gigawatt advanced stage development pipeline and M&A.

And while the opportunity set is better than ever, our proven M&A playbook and disciplined approach to investing has not changed. Our competitive advantage from an M&A perspective stems from the fact that we are able to invest at scale globally across both public and private markets, acquire or invest in assets and businesses spanning the development life cycle and have deep commercial and operational know-how to drive value that others cannot. Broadening our opportunity set and allowing us to be highly selective in when and where we deploy capital.

Our first step in identifying potential opportunities is focusing on scale platforms and businesses in attractive markets with strong and growing demand for power. We look for businesses led by experienced management teams with large portfolios of assets and expertise in mature, proven technologies. Once we have identified a potential investment opportunity, we then evaluate the quality and durability of the business' cash flows ensuring highly contracted revenues with high credit quality counterparties that can underpin our investment returns.

Lastly, we assess how we can enhance the value of the platform by leveraging our access to scale capital and differentiated capabilities through the value chain. With clearly defined initiatives in our business plan to drive sustainable growth and strong long-term returns. Some of the key initiatives we can usually execute on to help drive our returns, including leveraging our commercial relationships with the largest buyers of power including integrating newly acquired platforms into our existing frameworks, such as our Microsoft and Google agreements.

We are also able to leverage our global supplier relationships to enhance procurement and deliver economies of scale as well as optimize the capital structure and provide financing for growth, supported by our strong relationships with financial institutions, significant liquidity and robust funding sources. Taken together, these initiatives and capabilities enable us to accelerate growth across our business and support the delivery of stronger return than others can deliver over the long term.

Our recently announced privatization of Boralex alongside La Caisse is a great example of our disciplined, repeatable and consistent approach to value creation through M&A. Similar to our recent successful acquisitions of Neoen in France and Australia, OnPath in the U.K. and acquisitions in the U.S. of Geronimo, Deriva, Scout and Urban Grid, where we were able to acquire excellent businesses that meet our investment criteria and execute on our value-enhancing initiatives. We're now adding a leading Canadian-based platform where we can execute our proven playbook.

Boralex's strong base in its core markets, including Canada, complement our current business and give us an opportunity to do more in this highly attractive and growing market. Under the terms of the transaction, La Caisse will increase its ownership from 15% to 30%, while BEP alongside institutional partners will acquire the remaining 70% of the business at an implied enterprise value of $6.5 billion. The transaction is subject to shareholder and normal course regulatory approvals and is expected to close later this year.

Our acquisition of Boralex is expected to contribute positively to our financial results on close, and we see significant opportunity to enhance value over time by accelerating growth and through the execution of our business plan to deliver outsized returns. We expect to add value following our acquisition by leveraging our access to capital and commercial and supplier relationships to accelerate development across the platform.

We also see an opportunity to enhance Boralex's leading position in its core markets by expanding its capabilities across technologies and delivering differentiated energy solutions, including incorporating battery storage. We expect to be able to drive efficiencies within Boralex through the sharing of best practices across Brookfield's global businesses and create value by establishing an asset recycling program within the platform, drawing on Brookfield's experience to scale asset recycling alongside development, supporting a growth model of recycling capital into higher-returning opportunities at the business.

Boralex has a strong and experienced management team, and we're looking forward to supporting them with the additional resources and flexibility that come from being part of Brookfield Renewable as we work together to grow and enhance the value of the business. Going forward, we will continue to employ a disciplined approach to capital deployment in a market where we're seeing more attractive opportunities than ever for players such as ourselves. We have the capabilities and capital to unlock value through M&A and execute development of our large project pipeline.

With that, I will pass it on to Patrick to discuss our operating results in more detail our financial position and funding activities and the potential simplification of our structure to a single listed corporate entity.

Thanks, Jay, and good morning to everyone on the call. We delivered record financial results this quarter, generating FFO of $375 million or $0.55 per unit, up 19% or 15% per unit year-over-year. In the last 12 months, we delivered $1.394 billion of FFO or $2.08 per unit, up 13% or 12% on a per unit basis compared to the prior year period. Our results reflect the strength of our diversified global platform and the continued execution of our strategy. Our hydroelectric segment generated $210 million of FFO, up almost 30% year-over-year, supported by strong generation across our Canadian and Colombian fleets and a realized gain on the sale of our 25% interest in a noncore hydro portfolio in the U.S. all of which offset weaker hydrology at our U.S. operations.

Our wind and solar segments delivered a combined $245 million of FFO, up over 60% year-over-year. benefiting from contributions from development, acquisitions and accretive capital recycling across several of our platforms. Lastly, our distributed energy storage and Sustainable Solutions businesses contributed $58 million of FFO, reflecting strong development activity and continued growth at Westinghouse, driven by new reactor design and engineering work. And organic growth within its core fuel and maintenance services business.

Turning to our balance sheet. We continue to strengthen our financial position. completing almost $4 billion of financings across the platform in the first 3 months of the year alone, extending maturities and optimizing our capital structure, while ending the quarter with over $4.7 billion of available liquidity. The quarter was highlighted by the issuance of CAD 500 million of 30-year notes, priced at the tightest spread we have ever achieved. With this issuance, we now have an average maturity on our corporate level debt of approximately 14 years, representing the longest average corporate maturity in our history.

Put simply, during a period of significant growth and value creation, our business has the most durable and stable capital structure in its history. In addition to recent successful financings, we are also progressing recontracting initiatives on a scale portfolio of hydro assets in Ontario during the quarter, which once signed, will support significant up financings that we plan to execute over the course of the year, providing additional capital to deploy into growth.

We also had a very strong start to the year from a capital recycling perspective. Closing or agreeing to sell assets expected to generate approximately $2.8 billion or $820 million net to BEP. Recently, we agreed to sell our remaining 50% interest in a portfolio of noncore U.S. hydro assets, crystallizing significant value we created under our ownership. We also completed the IPO of CleanMax in India, selling approximately half of our interest. With the IPO, we have returned all of our original invested capital while continuing to maintain exposure to the platform's long-term growth trajectory and generated a 25% IRR to date.

We also closed a previously announced sale of a portfolio of operating solar assets in the U.S. from our Deriva platform. Our asset recycling in the quarter was also highlighted by the creation of a new private renewable vehicle focused on operating renewable assets in North America, Northview Energy, which is a partnership between BCI, Norges Bank Investment Management and a Brookfield Fund. The creation of Northview Energy is in response to the strong demand we are seeing from our institutional partners for high-quality derisked infrastructure-like assets with long-term contracted and durable cash flows. We seeded the vehicle through the sale of 22 operating onshore wind and utility scale solar assets, generating total proceeds of $1.3 billion or $315 million net to BEP. Beyond the initial seed assets sold into the platform, the arrangement with BCI and Norges also established a framework to sell additionally new developed assets from our pipeline into the vehicle with a framework to acquire assets generating up to an additional $1.5 billion of incremental gross proceeds over time.

While Northview is the first vehicle of its kind, we have launched, we continue to progress similar initiatives of meaningful scale across our global platform. During the quarter, we also launched our at-the-market equity issuance program for BEPC which we paired with the buying of BEP LP units under our normal course issuer bid. In the first quarter, we issued 2.8 million BEPC shares with proceeds from the issuance used to repurchase the same number of BEP units, resulting in approximately $27 million of realized cash gains.

Lastly, as our business in the broader market continues to evolve, we remain focused on ensuring that our structure is aligned with the best interest of our shareholders. We are currently exploring whether a single combined corporate structure would better serve our investors going forward with the goal to determine if on a tax-free basis, we can create a single corporate security to enhance liquidity, increase index inclusion and create value for our investors. We expect to have more details to provide later in the year as we begin our work and look forward to updating you on our progress.

In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors, supported by our strong operating platform disciplined capital allocation and our growing capital recycling program. On behalf of the Board and management, we thank all our unitholders and shareholders for their ongoing support. We are excited about Brookfield Renewable's future and look forward to sharing further updates on our progress over the course of the year. 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.

Certainly. And our first question comes from the line of Sean Steuart from TD Cowen.

I want to start with asset recycling. You guys have a lot on the go there. The magnitude is accelerating, I guess, in tandem with an expanding organic pipeline as well.

Can you give us updated perspective on the cadence and magnitude of overall asset recycling plans over the next year? And you referenced the CleanMax IRR, but broader perspective on returns you're crystallizing through those initiatives.

Thanks for the question, Sean. Three things perhaps it's worth saying about capital recycling. First, the growth in our asset recycling activities is a very natural expansion of our business that is tied on a slightly lagged basis to the growth in our organic and development activities. And as we have been building more and more wind, solar and other assets in-house, we increasingly are looking to sell those down to lower cost of capital buyers capture our development margin and redeploy that capital into accretive growth.

And while it has been growing incrementally in recent years, we do expect it to grow on a similar trajectory going forward. And it's increasingly becoming a very normal course and part of our business. In terms of targets for size and scale and amount of capital recycling, we're going to continue to be entirely driven by the values we see in the market. And if we see opportunities to sell assets at values above where we think they will produce within our portfolio, we will sell them for cash and redeploy that cash.

And therefore, we're not working to a consistent target. But perhaps to give you some direction or steer. At our Investor Day last year, we spoke about a $9 billion to $10 billion deployment of equity into growth over a 5-year period. and we would expect at least 1/3 of that capital over a 5-year period to come from asset recycling and perhaps more if we see strong values in the market. And this largely brings us to the last point where we do have a fairly robust capital recycling program ahead of us in 2026. And this is purely a result of the strong bids we are seeing for both platforms as well as stabilized assets in the current market. And therefore, I would say, on balance, the returns that we are generating through this capital recycling program, we are consistently seeing at the high end or maybe even above the high end of our target range.

Second question is with respect to the M&A opportunity set. The previous quarter's commentary was public equities offered a more compelling opportunity than private M&A opportunities, and that's consistent with the Boralex deal. Do you still see that gap in place? And post Boralex, can you qualify your continued M&A appetite?

So we continue to see both. Undoubtedly, for all the same reasons we mentioned last quarter, we continue to see opportunities in the public market. Those opportunities didn't stop and end with Boralex. The opportunities in the public market continue to exist. And similar to last quarter, it is because some companies in the public market are more constrained for capital, and therefore, not able to capture the tremendous demand environment that we're currently operating in.

We continue to see an environment where public companies with access to capital are -- that they can use to capitalize on the really attractive demand environment are performing well. and companies that don't have the right access to capital are struggling in the public markets. And therefore, we do continue to see opportunities in the public markets, but I would highlight we're seeing a pretty robust pipeline across both private and public for the remainder of the year.

And our next question comes from the line of Mark Jarvi from CIBC.

Connor, can you just clarify the comments you made about progress on the U.S. government with Westinghouse in terms of long lead items. Have those long lead items been actually signed right now and you're starting to get the support from the U.S. government at this point? If not, when does that come?

Mark, this is a very live discussion, and we hope to be in a position to announce some significant progress, not only in 2026, but in the near term. Since our announcement in Q4 of last year, we continue to see tremendous demand from nuclear both around the world, but in particularly in the United States from both the government as well as the utilities.

And that demand is coming from, I would say, all stakeholders across the environment. It's coming from offtakers, it's coming from the utilities. It's coming from the government. We continue to make significant progress on establishing frameworks under which initial orders can be made. And we hope to make some announcements in that regard...

Did that answer your question?

Yes. Sorry, just my [ catching ] broke for a second there. Next question, just -- I think there was a commentary earlier in the call, you said something about outsized ability to drive growth here. in the near term. Is the expectation then that you can exceed the 10% FFO per unit growth in the next couple of years? And if so, the primary drivers of that right now?

In the current environment, we do feel that we are well positioned to exceed our long-term target of 10%. This is driven by a number of things. Obviously, M&A in our business, the significant addition of new capacity that's coming online from organic growth.

And then lastly, our ability to recycle assets at very attractive values in the current environment. There could obviously be some timing variables on each of those things. But based on the underlying fundamentals of those 3 drivers, we feel that for both the short and short to medium term, we are well positioned to exceed that 10% per year target.

And so just to follow up on that. So obviously, asset sale gains would be a component of that. But if you put those aside, would you say the ability to drive FFO growth from the organic development and M&A side is stronger today ex asset sale gain?

Yes, we would. We would absolutely say that the operating fundamentals of our business and the organic growth profile of our business is as strong as it's ever been. And the ability to generate gains on sale above and beyond that and to recycle that capital accretively into even further growth would be upside.

And our next question comes from the line of Baltej Sidhu from National Bank of Canada.

Just on Northview Energy, how should we think about the cadence of future drop-downs and the potential mix of assets into this vehicle? And -- should we think about this as more of a steady-state annual funding lever or something that could scale more opportunistically depending on market conditions?

Thank you. From BEP's perspective, it's important to recognize that we have the option, but not the obligation to sell assets into Northview Energy. And the assets that fit that pool of capital are high credit contracted long-duration wind and solar assets in North America at prices and go-forward returns, which are very consistent with what we have seen and expect to achieve in our asset sales to third parties outside of this vehicle.

This is critical and we think immensely additive to our business because the structure helps us in derisking our development and enabling us to fund further high-margin growth. In terms of the drop-downs and the cadence of them, we'll really make 2 comments. One, the additional capital for future drop-downs we expect that to be utilized, we would say, over a 2- to 3-, 2- to 4-year period among asset sales to third parties outside of Northview.

At the end of the consumption of that initial allotment of capital, we will consider what to do next. We -- and that is a discussion for the future, we could potentially expand this vehicle, create new vehicles. But for now, we are just focused on consuming that initial commitment, which we expect will take 2 to 3 or 2 to 4 years.

Very good. And just one more for me. Just on the prevailing hyperscaler agreements that we have in place. Could you provide an update on how those agreements are progressing forward and what the potential pipeline looks and how conversations with such parties are evolving?

So there's probably 2 things that characterize our activity with the hyperscalers in the context of those agreements and more broadly. One, is the demand -- and we apologize for sounding like a broken record call after call, but demand continues to go up. It is higher today than it was last quarter. It's higher today than it was last year, and we expect it to be higher next year than it is today.

The demand for energy, particularly from the hyperscalers, particularly in their core markets, continue to increase at paces, we would say, significantly above previous market expectations. The other thing we are seeing in terms of our activities with the hyperscalers within those frameworks is our activities continue to broaden and evolve. I'll give the example of the first framework agreement we did was with Microsoft, and it was really focused on wind and solar assets. We continue to contract more and more wind and solar assets with Microsoft under that arrangement. But last quarter, we also contracted some hydros under a long-term contract with them.

And we're now to meet their evolving demands increasingly looking at including battery storage, either with the projects that we're contracting with them or as part of the broader arrangement with them. So the 2 points we would make is the demand and the activity continues to grow and accelerate, but it also continues to broaden. And we feel it's the second point where our scale and diversity continues to differentiate us in our ability to serve the largest corporate consumers of electricity.

[Operator Instructions] Next question comes from the line of Christine Cho from Barclays.

I just wanted to ask about this single combined corporate structure. You guys have been trying to increase the liquidity of Pezzi for a while. So this seems sort of like a natural progression. But can you walk through what led you to evaluate this and what's on the table other than the tax rate part of this, could you talk about other things that need to be considered in trying to do this? And would this change how you view your distribution policy?

Christine, it's Patrick. There isn't much more that we can say other than what we have already said sort of in our opening remarks as well as in our press release. But what I will say is our focus in beginning our work is really looking at, can we achieve a simplified structure while achieving a rollover on a tax-free basis for our investors and also try to capture some of the potential benefits around broader index inclusion enhanced trading liquidity that we are observing amongst corporate securities relative to partnerships.

And then lastly, just focusing on can this broadly create value for the entire investor base. But we can't really say much more than what we've already said in our opening remarks, Christine.

Okay. I appreciate that. And then are there any regions or technologies where execution risk has increased a little more than you would have thought, especially with the current administration, the surge in demand for power from hyperscalers and just general pushback from communities that we're seeing, whether it's on like permitting, interconnection and supply chain that we should be more mindful of?

Christine, I'll take the second one. Maybe just so it doesn't get missed on your previous question. We would not expect any change to the corporate structure to adjust our dividend policy. I'll just make sure we didn't gloss over that point.

In terms of what we are seeing in terms of opportunity and dynamics around different types of projects and different types of development. There's probably 2 things worth noting across our business. One -- maybe 3, I apologize. One is, this is pick your tagline any and all in all of the above type solutions. The demand for energy is going to require all types of sources. We are seeing the greatest growth in renewables because they are quick to deploy, and they are cheap, but we are going to see demand across all types of energy in terms of additions to meet the demand forecast going forward.

The second thing that's worth noting is undoubtedly the fastest-growing technology across Brookfield Renewable today is batteries and energy storage. We are seeing that within all of our existing development platforms. We are increasingly looking at stand-alone energy storage opportunities. And the rationale for this is very simple. They remove grid congestion. They don't add to it. So they solve that problem, and they are very quick to deploy.

Further, this has been -- this opportunity has been driven by the fact that CapEx for batteries and energy storage has come down 65% to 70% over the last 24 months, making these investments very economic and financially attractive. The third point, and this is probably the most insightful in terms of hitting your question head on. We are seeing a dramatic increase in interest and growth in behind-the-meter solutions.

The reality is the demand trajectory ahead of us is greater than the pace at which grids can expand. And therefore, we are going to see significant expansion of electricity demand on grids, but we're increasingly seeing demand for behind-the-meter solutions. It's important to recognize that while behind the meter solutions are perhaps growing faster on a relative basis, they are coming off a very, very low base and the vast majority of demand growth is still going to go through grids the way it has in the past, but we are seeing increasing demand for behind-the-meter solutions.

And our next question comes from the line of Nelson Ng from RBC Capital Markets.

Connor, you previously talked about how battery storage is a pretty big opportunity. When you look at your like current solar and wind portfolio, is it economic to add batteries to existing sites? And I know many of those assets are contracted. So are you seeing offtakers willing to pay that extra amount to firm up their power?

Absolutely, in no uncertain terms, yes. The value proposition for batteries in today's market is very compelling for offtakers in terms of giving them a load profile that better matches their 24/7 curve. And we're seeing it, therefore, alongside existing projects in new developments and on a stand-alone basis?

Okay. And then switching gears a bit. So in South America, I know the environment isn't great for renewable development and interest rates are really high. And you're not that active on the development front. But on the M&A side, you recently increased your stake in Isagen, but can you just talk about whether there are like M&A opportunities you're seeing in South America?

Certainly. In South America

[Audio Gap]

we will [indiscernible] there when we can do so at compelling risk-adjusted returns. Our more modest activity in South America, I would say, over the last 2 or 3 years outside of the Isagen transaction, I would say, is simply episodic. A lot of it was driven by very high hydrology and rapid build-out in Brazil. that pushed prices down and made new build in that country, a little less compelling for a period of time. We're seeing demand recover. We're seeing hydrology normalize and that market strengthen again. We continue to do significant growth in Colombia, but we do it within the Isagen platform.

So it doesn't show up as a new discrete M&A transaction. And then we've continued to do smaller transactions in other regions or other countries in the region, whether it be Chile, Central America. So it is a compelling market. It is one where the value of

[Audio Gap]

It continues to be a market we focus on. And we'll be -- continue to be a portion of our business going forward, albeit smaller than our core markets in North America and Western Europe.

And our next question comes from the line of Anthony Crowdell from Mizuho.

Just 2 quick ones, if I could squeeze in. One is a follow-up from Christine's question earlier. Is there just a time line of when you hope to have a decision made on the corporate consolidation? Is it a quarter or by year-end? And then I have a follow-up on nuclear.

Anthony, it's Patrick. We have just begun our assessment, and so we can't really give any indicative time line at this moment or really add much more at this time.

Great. And then on the nuclear, you talked about the success and the momentum going on with the AP1000 and the U.S. government. I'm just curious, where do you see the bottleneck right now before we get an announcement, is it on the utility side? Is it on the government side, regulatory side. What's the bottleneck before we get an announcement?

Perhaps this is putting a positive spin on this, but I wouldn't almost look at it as a bottleneck. The potential for new build nuclear reactors in the United States, is an immense step change to what has been done over the past 10 or 20 years. We are talking about additions that exceed 10 announcing in 1 shot additions that exceed 10x what has been done over the last 15 years.

And therefore, this simply requires obtaining alignment from all the stakeholders for that scale of a build-out. That includes the government. That includes the nuclear eligible utility operators. That includes the offtakes and that includes the financing parties. we candidly would suggest that the momentum and the traction that has been made over the last 6 or 9 months is incredibly significant and reflective of the demand for growth in the asset class because what we're looking to do in the course of 6 or 12 months far exceeds what's been done in the last 10 to 15 years. So I wouldn't say it's a bottleneck. It's just getting alignment from all the appropriate groups. And at this point, the interest and support for getting this done is pretty overwhelming.

And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to Connor Teskey for any further remarks.

Thank you, everyone, for joining our earnings call this quarter. We deeply appreciate your continued support and interest in Brookfield Renewable and we look forward to updating you following our Q2 results. Thank you, and have a great day.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Good day, and thank you for standing by. Welcome to the Brookfield Renewable Partners Fourth Quarter and Full Year 2025 Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your speaker today, Connor Teskey, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2025 conference call. Before we begin, we would like to remind you that a copy of our news release and investor supplement 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 SEDAR+, EDGAR and on our website.

On today's call, we will provide a review of our 2025 performance, share our perspectives on the energy market today and provide an update on the growth outlook for our business. We will then turn the call over to Patrick, who will discuss our operating results and strong financial position as well as outline how our increasingly differentiated access to capital is providing a clear advantage for our franchise today. He will then conclude our remarks with an update on our growing asset recycling program.

Following our comments, we look forward to taking your questions. 2025 was another excellent year for our business. We delivered strong financial results, strengthened our balance sheet and most importantly, further positioned the business to continue delivering strong growth and value creation for our Unitholders going forward. This past year, we delivered $2.01 of FFO per unit, up 10% year-over-year and in line with our long-term growth target on the back of solid operating performance, expanded development activities, accretive acquisitions and growing capital recycling.

We deployed or committed a record $8.9 billion (sic) [ $8.8 ] or $1.9 billion in growth net to BEP, highlighted by the privatization of Neoen, our carve-out of Geronimo Power in the United States and our increased investment in Isagen, one of our strongest performing businesses over the last decade. We were successful in advancing our various commercial priorities, signing contracts on over 9 gigawatts of generation capacity. We also continue to scale our development activities, bringing online over 8 gigawatts of new capacity globally, a record for our business. We delivered on our asset recycling targets, reaching agreements to sell assets generating $4.5 billion of proceeds or $1.3 billion net to BEP at returns above the high end of our targets.

And we accomplished this all while strengthening our balance sheet, ending the year with $4.6 billion in available liquidity. Stepping back and looking at the broader market today, it is now clear that power is a strategic priority around the world and is the bottleneck to growth for both governments and corporates. Investment in new generation capacity over the past several years was largely about replacing carbon-intensive generation in a world of modest or even flat electricity demand growth. Today, that backdrop has fundamentally shifted. Energy demand is rising at a pace not seen in decades, driven by the multi-decade trends of electrification and renewed industrial activity. This demand growth is being further amplified by AI and the unprecedented investment in energy consumption from some of the largest companies in the world.

As a result, we are not only transitioning the grid, but adding substantial net new generation for the first time in decades. Said another way, we have shifted from a period focused on energy transition to a period focused on energy addition. This shift is driving a move from incremental grid upgrades to large-scale expansion, prioritizing fast to deploy renewables, scale baseload generation and capacity to ensure reliability.

Meeting this demand will require a mix of all the scale and efficient technologies over time. Solar and onshore wind will play a critical role given their speed to market and low cost. Hydro and nuclear are important for their baseload and scale, natural gas for its flexibility and battery solutions will be critical for ensuring the reliability of grids going forward. In this evolving environment, we have deliberately positioned our business at the epicenter of many of these technologies, allowing us to capitalize on the rapidly expanding opportunity set given our operating and development capabilities, strong partnerships and significant access to capital.

First, we are scaling our development of low-cost, fast-to-market solar and onshore wind to meet the accelerating demand for power in the near term. Over the past year, we commissioned a record amount of new solar and onshore wind capacity and are on track to reach a run rate of delivering roughly 10 gigawatts of new capacity per year by 2027, all while maintaining our disciplined approach to development.

Second, against the backdrop of growing demand for reliable baseload power, we are well positioned in the current market through our operating hydro assets and our ownership of Westinghouse. As power systems require more scale baseload generation, flexibility and enhanced reliability, the value of hydro is being recognized more than ever before. This has been highlighted by the execution of 3 20-year power purchase agreements at strong pricing with hyperscalers, a first for our business as well as the signing of the framework agreement with Google to deliver up to 3 gigawatts of hydro generation in the United States.

With respect to nuclear, only slightly more than 2 years ago, we invested in Westinghouse, gaining exposure to this critical technology for current and future electricity grids given its scale and baseload characteristics. Our investment was underpinned by Westinghouse's highly contracted infrastructure-like cash flows from its fuel and maintenance business, its strong market share and its leading and proven technology for large-scale nuclear power reactors. The current energy demand environment has reinvigorated the nuclear sector with increasing recognition of the role nuclear can play to enable economic growth and provide energy security. Perhaps the most impactful development for the sector is the recently announced landmark agreement with the U.S. government to deliver new nuclear reactors utilizing Westinghouse technology in the United States. This agreement delivers significant economic value to Westinghouse and BEP via the development of multiple reactors and then through the long-term provision of fuel and maintenance services over the 80-plus year life of those reactors.

A commitment of this scale provides long-term demand certainty, helping unlock supply chain investment and positions Westinghouse to expand deployment well beyond this initial program to both corporates and governments in the U.S. and internationally. Since signing this agreement, all parties have been working to progress the sites to construction as quickly as possible, largely focusing on site selection and the ordering of long lead time items. Against this backdrop and the known development time line for nuclear, the limited new hydro capacity available and the growing backlog for natural gas plants. We are seeing batteries play an increasingly important role in the near term with their importance set to grow over time as additional low-cost renewables come online.

Battery costs have declined by an astonishing 95% since 2010, following a trajectory similar to solar panels a decade ago. And we see a growing opportunity to deploy this technology on a contracted basis at strong risk-adjusted returns. Our recent acquisition of Neoen significantly expanded our operating footprint, capabilities and development pipeline in battery technology, and we expect to quadruple our battery storage capacity over the next 3 years to over 10 gigawatts. This growth is highlighted by one of the largest stand-alone battery storage projects globally, totaling over 1 gigawatt, which we are currently advancing through Neoen in partnership with a sovereign wealth fund.

Taken together, rising energy demand across global markets is driving the need for rapid additions of renewable capacity, large-scale baseload power and battery storage. Backed by long-term partnerships with the world's largest corporate buyers of power and governments, we are delivering more generation than ever before. By being positioned in markets with accelerating demand, combined with our global scale, significant access to capital and our operating -- and development capabilities across key technologies, we are best positioned to deliver comprehensive energy solutions across all markets at scale and are entering into a period of outsized earnings growth, generating significant value for our Unitholders over the long term.

And with that, I'll pass it on to Patrick to discuss our operating results, our diverse sources of scale capital, our balance sheet as well as our recent capital recycling initiatives.

Thanks, Connor, and good morning to everyone on the call. As Connor noted at the outset of his remarks, 2025 was a strong year across almost every metric, with the business delivering 10% FFO per unit growth, achieving our target while maintaining our best-in-class balance sheet and further positioning ourselves to generate significant growth and value going forward. In the fourth quarter, we delivered FFO of $346 million, up 14% year-over-year or $0.51 per unit. On a full year basis, we delivered FFO of $1.334 billion or $2.01 per unit, up 10% year-on-year.

Results were driven by the strength of our contracted inflation-linked cash flows across our diversified global operating fleet, growth from development activities, accretive acquisitions and scaling capital recycling. Looking across our segments, our hydroelectric segment delivered strong results this year with FFO of $607 million, up 19% from the prior year, benefiting from solid generation across our Canadian and Colombian fleets, higher revenues from commercial initiatives and gains from the sale of a noncore hydro portfolio, all of which offset weaker hydrology in the U.S.

Our wind and solar segments generated a combined $648 million of FFO, supported by contributions from the acquisitions of Neoen and Geronimo Power as well as our investment in a portfolio of contracted offshore wind assets in the U.K. This growth was offset by gains on sales recorded in last year's results, which included the sale of Saeta and the partial disposition of Shepherds Flat. In our distributed energy, storage and sustainable solutions segments, we generated record results of $614 million, up almost 90% from the prior year, driven by growth through development, the acquisition of Neoen and strong performance at Westinghouse on the back of continued momentum in the nuclear sector.

In addition to the strong results, a continued focus of ours has and will always be to maintain balance sheet strength and financial flexibility. This enables us to be opportunistic when it comes to deploying capital into growth and protecting us against downside risks. We ended 2025 with $4.6 billion of liquidity. And over the past year, we reaffirmed our BBB+ investment credit -- investment grade credit rating, which we remain firmly committed to maintaining going forward. Our rating, significant liquidity and strong financial position enable us to be very opportunistic with respect to our financing activities, which further strengthens our balance sheet.

In 2025, we executed over $37 billion in financings, a record for our franchise. These financings were highlighted by the completion of $2.2 billion in investment-grade up financings, primarily at our hydro assets, where we are seeing strong lender demand for these assets and are leveraging the benefits of newly signed long-term contracts at strong pricing. In March of this past year, we issued CAD 450 million Canadian of 10-year notes at what was our lowest spread in almost 20 years at the time. We then more recently topped this, issuing CAD 500 million of 30-year notes this January at our lowest spread ever, reflecting the strong demand for our credit and our ability to be nimble and take advantage of a favorable spread environment.

In November this past year, we also executed a $650 million, bought deal equity raise in concurrent private placement. We were successful deploying capital ahead of our targets in the 12 months prior to the equity raise, and this financing provides capital to invest even further in the expanding opportunity set in areas where we have a differentiated ability to deploy capital, such as hydro, nuclear and battery storage. Our strong balance sheet is further enhanced by the fact that we deploy our capital alongside a large pool of third-party funds raised by Brookfield Asset Management.

In 2025, Brookfield successfully completed fundraising of over $20 billion for its second vintage of its global transition fund. This capital will support large-scale investments alongside BEP that few others can make, further enhancing our access to large, high-quality M&A opportunities that help us achieve strong and consistent growth. In addition to our financing activities across the business, we are continuing to scale our capital recycling program, which is increasingly providing significant liquidity to support our growth and crystallize value creation within our business.

We continue to see robust demand from private investors for derisked infrastructure-like cash flowing operating assets. At the same time, with our scaling development activities, we have a growing portfolio of assets and platforms that we are selling on an annual basis. The size of our portfolio and our flexibility to sell whole platforms, stand-alone assets or minority stakes is enabling us to be active in the market, consistently selling at prices that deliver on our target returns. This past year, we generated record proceeds of $4.5 billion or $1.3 billion net to BEP from asset recycling alone.

This year, our asset rotation activities were highlighted by the sale of a major North American distributed energy platform, a 50% interest in a portfolio of noncore hydro assets in the U.S. and the establishment of an asset rotation program at Neoen that was successful in executing the sale of $1 billion of enterprise value of assets in our first year of ownership alone. Looking ahead, we are focusing on continuing to scale our capital recycling program and generating proceeds from sales in a more recurring manner.

In January this year, we agreed to sell a 2/3 stake in a large portfolio of recently built operating and solar assets -- wind and solar assets in North America, generating proceeds of $860 million or $210 million net to BEP and are actively progressing the sale of the remaining interest. In conjunction with this sale, we are also establishing a framework for the future sale of select assets that meet certain criteria to the same buyers. This framework, which proposes the sale of up to $1.5 billion of additional assets, further derisks our development platforms and provides a scalable source of capital to fund future growth.

We are exploring similar initiatives in other regions across our global platforms and look forward to providing updates on our progress throughout the year. We also wanted to note that after the quarter end, we announced a fully discretionary $400 million at-the-market equity issuance program for our BEPC share. We expect to use the proceeds to repurchase BEP LP units on a one-for-one basis under our existing NCIB. The purpose of the program is to increase BEPC's float and liquidity in a non-dilutive manner, while also allowing us to capture value from the persistent premium at which those shares trade, providing incremental cash to deploy into growth or buy back even more shares.

Lastly, with our record results and in conjunction with our strong liquidity and robust outlook for our business, we are pleased to announce an over 5% increase to our annual distribution to $1.468 per unit. Since Brookfield Renewable was listed in 2011, we have now delivered 15 consecutive years of annual distribution growth of at least 5% each year.

In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors while remaining disciplined allocators of capital, leveraging our scale and operational capabilities to enhance and derisk our business. On behalf of the Board and management, we thank all of our unitholders 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 our operator for questions.

[Operator Instructions] Our first question comes from Sean Steuart with TD Cowen.

A couple of questions to start with. Connor, 2026 would be the first year where you start to feed projects into the Microsoft framework agreement. Can you give us an update on progress there and the expected cadence of capacity into that deal through 2030? How is that advancing at this point?

I would make this comment more broadly on a wholesale basis beyond very simply our strong relationship with Microsoft. The demand we are seeing from corporates and in particular, the large hyperscalers is at an all-time high. And I recognize that we've been saying that for a number of years, but that demand just continues to accelerate and continues to grow. And we're seeing that in terms of the projects and the execution that we are doing with counterparties such as Microsoft on an ongoing basis.

When we launched that program, we had a defined set of projects in our pipeline that we thought would fill the 10.5 gigawatts that was initially outlined. I would say since we announced that agreement in 2025, we are seeing counterparties such as Microsoft look for power in a broader spectrum of regions and markets, particularly across the United States and even a broader spectrum of technologies to meet their power demand. So we will see growth in 2026, and we expect to see that growth do nothing but accelerate from 2026 through the rest of the decade.

Okay. And Patrick, a question on the balance sheet. You guys were busy with financing initiatives in the fourth quarter, asset recycling. When I look at the ratio of available liquidity versus the scale of the secured development pipeline or -- versus the installed asset base, those ratios have moderated a little bit in the last 1.5 years. I guess any commentary on broader comfort with the liquidity position. I appreciate you're going to be busy recycling assets. But are there ratios you're focused on to sort of sustain a comfort level with available liquidity relative to an expanding growth opportunity set?

Yes, absolutely, Sean. And I would say we're very comfortable, first of all. And when we think about our available liquidity and the business obviously having grown over the last several years, we're very focused on sort of maintaining a minimum level in and around that $4 billion mark. We're fairly focused on it. It's not a hard line by any means, but we have been at or around that or above that, I should say, for the last several years at this point. It's a level given the scope of our business today that we feel quite comfortable being at.

And to your point, as the development pipeline continues to grow, we're complementing that by scaling our capital recycling as well. So that allows us to be in and around that $4 billion mark and be very comfortable with our funding availability of our liquidity, I should say.

Okay. But when you think about $4 billion, I mean, you've been there for a while now. Your organic growth pipeline is expanded really rapidly. Is that -- I would imagine there's sort of like a dynamic element to this is the velocity of capital deployment changes for you guys. As the organic pipeline grows, is there other thoughts to that?

No, I think it's fair that as the organic pipeline continues to grow, there will be an element where we may look to increase that over time. But we're at a level right now where as we look out over the next several years, we're quite comfortable at these levels. And part of it is just because of that visibility we see on accelerating recycling.

Our next question comes from Nelson Ng with RBC Capital Markets.

So a quick question. In terms of the 8 gigawatts commissioned this year, I think about 2.5 were in North America. But obviously, there's a lot in the U.S. So when you look at developing projects in the U.S., are you still seeing any like headwinds or bottlenecks from the federal government from a permitting perspective for onshore wind and solar? Like obviously, it's a different story for offshore wind, but you're doing onshore. But are you seeing any headwinds there?

Nelson, thank you for the question. Really put this in 2 buckets. What we would say is when it comes to solar, which is the broadest component of our pipeline, solar and batteries in the U.S., we are seeing no slowdown. We are seeing an acceleration. And this is driven by solar is quick to deploy. It's cheap. It's the lowest cost form of production. And quite frankly, the corporates need the power as quick as possible.

So on solar, we are seeing no change, if anything, an acceleration, and we're trying to pull projects forward as fast as possible. On wind -- onshore wind, there has been some slowdown in permitting from the federal government, but projects are still getting done. And we've taken that into account, into our development and execution process, that's reflected in the pipeline that we present. I would say that wind is progressing slower than onshore solar in the U.S. market, but both are still getting done.

Got it. And then just switching topics a bit. So obviously, we're hearing a lot about the elevated power prices in the U.S. and the fact that you are signing more long-term hydro contracts. But when I look at your realized power prices for the U.S. hydro segment in the supplemental document, I think the realized hydro price has been flat year-over-year at about $83. I'm just wondering whether that's just due to the generation mix given that it was below average in the past year? And should we be seeing an increase going forward?

You should see an increase going forward. And there's a lot of different dynamics that flow through those numbers. But the overarching point to be made is the scarcity value of hydroelectric power is that an all-time high right now. And it perhaps gets glossed over in the breadth of our broader business. But the 3 contracts, 3 20-year take-or-pay PPAs inflation linked with some of the largest corporates around the world from our perpetual hydro assets, we have never seen demand of that scale at the prices we have seen in, I'd say, the last year, but in particular, in the last 6 months. And as those contracts get layered in, some of those contracts don't start immediately. They start in a couple of years when the existing contracts roll off, you will begin to see higher achieved contracted power prices across our hydro portfolio.

Great. And I'll try to squeeze in one more question. In terms of capital recycling, you guys mentioned that you have a, I guess, a potential framework to sell an additional $1.5 billion to some buyers -- to some existing buyers. So when you look at recycling assets are -- like how much of your customers are -- or how much of the buyers are essentially repeat customers? And should that streamline your asset recycling process going forward?

Short answer, yes, but let me provide a little bit more color. Since we started to grow our development business, I would say, in 2019 or 2020, our capital recycling activities have understandably grown on a similar trajectory, but probably on a 3-ish year lagged basis, the time it takes to pull a project out of the ground. As a result, over the past 2 or 3 years, our asset recycling proceeds have become a very consistent, recurring, predictable source of both funding and earnings for our business.

And given the trajectory of our development activities and the visibility of our pipeline today, we would expect this activity to continue going forward with 2026 being no different. Then, when it comes to the recent, we will call them frameworks we've set up in terms of asset recycling, similar to in the past how we have raised capital to facilitate a greater level of deployment into growth, we think about this as raising capital to facilitate a greater amount of capital recycling in the business. And we're pretty excited about what we've designed and executed here because what these frameworks, and we've executed one and we're pursuing others in different regions around the world that we would hope to execute in the near term, what we have done is we would say we have created almost a framework or a program to recycle newly built assets at scale quickly on a recurring basis.

And the impact to our business is it significantly derisks our development platforms around the world and the business plans we're seeking to execute, and it significantly derisks our capital recycling and funding plans for our business for the next several years.

I will go out on a limb and say, I think this is going to be a huge differentiator for our franchise. Yes, we've signed one since the end of the year, focused on North America, but we expect to sign others in the near term here. And these are very significant in terms of scale. And not only are they going to provide an accretive source of funding for our business, they significantly derisk our development activities that continue to grow.

Our next question comes from Robert Hope with Scotiabank.

So at the recent Investor Day, you spoke quite bullishly about the battery outlook, and I believe you commented that it could be 7 gigs in a couple of years. And today, you're saying it could be 10 gigs. Is the accelerating development pipeline here or an increasingly bullish outlook here in part due to the fact that you're seeing larger opportunities. The 1 gigawatt battery project for the sovereign wealth fund, is this indicative of where you think development is going, larger projects to ensure reliability for the grid?

Yes. Rob, the short answer is yes. Make no mistake, batteries are the fastest-growing part of our platform today, and we expect that to continue. But what this is really driven by is the simple fact that battery costs have come down so dramatically over the last decade. They've come down more than 60% over the last 24 months. And as a result, they are becoming an increasingly economic solution in more and more markets around the world. This dynamic continues. Costs continue to go down. Technology advances continue to be made. And therefore, we are seeing batteries as a potential solution in more and more of our projects and in more and more of our markets.

The other thing we would highlight is we do all think at Brookfield Renewable, think about battery development probably a little bit different than generation development because it can be executed faster. Much of the equipment shows up prebuilt on site. And because batteries and energy storage reduce grid congestion as opposed to add to it, there is significant incentive from grids to bring batteries online faster. Therefore, yes, we have accelerated or increased our outlook for batteries, but it's very simply just a reflection of what we're seeing across our business. And what we're doing with our sovereign wealth fund partner, we would expect to do other similar projects like that going forward.

All right. Appreciate that. And then maybe turning over to the M&A environment. You've been very successful monetizing assets. But on the other side, acquiring assets, what does that environment look like in a rising price environment as well as the power addition environment?

So perhaps I'll almost tie this back to Patrick's answer on funding a little bit. We've always been very opportunistic in terms of funding our business. And right now, we see scale capital as an increasing competitive advantage in today's market, and we see a very constructive market for deployment into growth. This is why we took the decision earlier this year to strengthen our already very strong capital and balance sheet position because we do believe we are at the start of a period of very attractive deployment into growth and M&A and very simply a broader consolidation of our space where we think we can play a very significant role.

Next question comes from the line of Baltej Sidhu with National Bank of Canada.

So Connor, just given that renewable infrastructure valuations remain compressed and you've noted the largely U.S.-based development pipeline, where are you seeing the most attractive risk-adjusted opportunities today that operating assets, late-stage development or early-stage platforms? And how do you think that mix will evolve looking into 2026?

The opportunities we are seeing are pretty broad-based around the world. But perhaps to focus on a few themes that we are seeing right now, I would perhaps highlight 3 where we're seeing the greatest volume of opportunities that we view as attractive. Absolutely, yes, public companies. That would be number one in the current environment. The second point we would highlight would be carve-outs from broader utilities or energy businesses because there are such significant capital needs across the industry, market participants are needing to choose where they will allocate their capital budgets. And to put it bluntly, some market participants can't fund 100% of the opportunities they have at their disposal, and therefore, they may look to sell divisions that they don't expect to fund all the growth opportunities in, and that could be an opportunity with us given our robust capital position.

The last point we would make is we are seeing a unique dynamic in the developer market where we are seeing a bifurcation between what we would call high-quality developers and maybe less high-quality developers. High-quality developers price at an absolute premium in today's environment given the growth trajectory of electricity demand and the value of projects that can be pulled out of the ground. However, developers that maybe don't have scale capabilities to navigate the current environment, but do have large pipelines of projects, we are seeing more attractive pricing at that end of the market and would expect to be active there in order to add projects to our pipeline that we can then contract with the demand we're seeing from our customers.

And just one more for me. Just on the [indiscernible] hydro that you had alluded to and speaking towards the Google HFA, which could see you potentially acquiring additional hydro to facilitate the entirety of the 3 gigawatts. What are you seeing in the market? And how are you thinking about it just looking forward in that regard?

Sure. What we would say when it comes to hydros is -- it very much depends on location. As mentioned, we've seen really strong demand for our hydros and premium valuations, both in contracts and in assets in markets in the U.S. like PJM and MISO. And our activities in 2025 reflect that. However, what I would say is what we are seeing is the offtakers of these hydro assets increasingly looking now beyond those 2 markets, which have really been their focus, I would say, for the last 2 years. Therefore, when we look to potentially acquire assets, we're probably looking for assets in these markets that have been viewed as non-core in the past, where we can acquire assets, execute operational improvement programs and recontract them under our framework agreements. But the biggest point I would say is it's very location specific.

Our next question comes from Benjamin Pham with BMO.

I wanted to ask a couple of questions. You mentioned the battery storage opportunity. I'm curious, a couple of things is, is the plan mostly greenfield development that you picked up a couple of -- actually quite a number of megawatts from Neoen. Or are there opportunities to also do M&A? And then I'm also secondly curious, the revenue model with storage for you specifically, is that -- do you expect to be mostly contract? Or is there an element of merchant arbitrage in there?

Ben, great question. So in terms of batteries, we view ourselves to be in quite a fortunate position because we do have a very large organic development pipeline. A lot of that did come through the acquisition of Neoen. Candidly, Neoen was the largest acquisition in the history of Brookfield Renewable. We recognize that perhaps a lot of people knew Neoen as a leading global renewable power developer. We obviously saw that and the value of that. But we thought what was underappreciated in their business is the fact that they're the leading global energy storage developer as well. And what you've seen in our first year of ownership is us really accelerating the growth in the business, but particularly on the energy storage side.

We are also looking at M&A opportunities in the battery space, but we've positioned ourselves that we can be quite discerning and balance the returns we're seeing in M&A versus the returns we're seeing in organic development. To your question about contracting, we're very excited about the evolution of what we've seen in the energy storage space, where only perhaps 2, maybe 3 years ago, a lot of the revenue models were arbitrage or merchant related. Increasingly, what we are seeing is long-term tolling or almost take-or-pay capacity contracts on newly built battery assets. And very simply as an example of the large project that Neoen is pursuing, that would be on a 100% contracted basis for the entire life of those assets. So a development and revenue profile very much in line with or potentially even stronger than what we do all day, every day on the wind and solar side.

Okay. Understood. And then can I also ask on the offshore wind side, you -- previous comments, you didn't like it for a while, maybe 7, 10 years, you got maybe more open to it, [indiscernible]. Where does Brookfield stand today then on offshore wind?

Understandably, it would be very market specific. But we are seeing some markets we won't bury the lead here. Europe, in particular, increasingly more constructive from an offshore wind perspective, and we are evaluating opportunities in the space there. That being said, as with everything, we will compare the investment profile and the risk return we see in those opportunities versus what we see elsewhere in the portfolio and only pursue them if we think we're being appropriately compensated.

Okay. If I may just to follow up on that. There's been maybe a trend of offshore wind assets in Europe as they reach end of contract life to become more merchant like. Is that something that maybe Brookfield could opportunistic take advantage of?

Certainly. And in particular, if we could bring our contracting to bear such that we could acquire those assets based on a merchant profile, but bring our power marketing capabilities to quickly derisk them through a new long-term contract. Yes, that's absolutely something we would look at. We would be clear that we've seen a couple of those opportunities, but it's not the largest opportunity set in the world today.

Our next question comes from Anthony Crowdell with Mizuho.

Just a quick one, a follow-up maybe on the previous question or 2 questions on PJM. Just several weeks ago, the Trump administration created that backstop auction, which is very light on details. I'm just curious if you think that plays maybe or pushes hyperscalers to focus more on Brookfield Renewables development side where you're bringing new generation in or the company could be opportunistic with some repricing some existing generation.

So the activity and the announcements around PJM, we very much see this as simply a reflection of the demand for energy and quite frankly, how tight the system has become, in particular, in markets with the highest levels of energy demand growth. We've been saying for years that the supply-demand imbalance has been growing materially. And this inevitable evolution leads to the immediate need for large-scale capacity to be added to grids around the world and in different markets in the United States.

So from our perspective, one of the most constructive outcomes of this discussion is that it should create a dialogue to facilitate an acceleration of new capacity coming online over the long term. That's obviously incredible for the market, and it's incredible for our business given our large pipeline of development opportunities. All that being said, we've already contracted our hydro fleet in the PJM region with the recent Google agreement, which really insulates us from any near-term market impacts depending on how these discussions and announcements related to PJM evolve in the coming weeks. But as an existing generator with contracted assets today and a development pipeline focused on meeting -- the growing and incremental demand, we view this as a step towards addressing the underlying supply-demand imbalance for our business and -- sorry, addressing the underlying supply-demand imbalance in that market, and we view that as very positive for our business.

That concludes today's question-and-answer session. I'd like to turn the call back to Connor Teskey for closing remarks.

Great. Well, thank you, everyone, for joining our Q4 conference call. We appreciate your continued support and interest in Brookfield Renewable, and we look forward to providing an update after Q1. Thank you, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Brookfield Renewable Second Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Connor Teskey, CEO. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us for our Second Quarter 2025 conference call. Before we begin, we would like to remind you that a copy of our news release, investor supplement and letter to unitholders 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're encouraged to review our regulatory filings available on SEDAR, EDGAR and on our website.

On today's call, we will provide a review of our second quarter performance. And then Wyatt Hartley, Co-President of Brookfield Renewable and Head of our North American business, will discuss our recently announced Hydro Framework Agreement with Google and how our strategic operating portfolio and deep capabilities across renewable technologies has positioned us as the partner of choice to the largest buyers of power globally.

Lastly, Patrick will conclude our remarks by discussing our operating results and the strong financing environment that we are seeing for our business and our assets today. Following our comments, we look forward to taking your questions.

We had a successful quarter, delivering strong financial results and executing on our business plans and growth initiatives. Our robust operating results were driven by our large hydro fleet, which is increasingly strategic in the current environment and the benefits of our development activities where over the past 12 months, we have commissioned 7.7 gigawatts of new renewable energy capacity globally.

One highlight in the quarter was the strong results from our Nuclear Services business Westinghouse, as the momentum for nuclear power continues to build with Westinghouse well placed to benefit from continued growth in the sector given its global leadership position. Looking at the broader market, we recently received additional clarity on policy changes in the United States with the signing of the One Big Beautiful Bill.

And while we have been preparing our business for changes in tax credit eligibility for U.S. renewables projects for some time, we are now in a position to execute with a greater level of confidence. With that, we began deploying a safe harboring strategy that will secure credit eligibility for nearly all of our projects in the United States through to the end of 2029.

While doing so, we are staying true to our approach to development, focusing on ensuring we have a strong line of sight on both our costs and revenues for each project. With a particular focus on minimizing the capital at risk while protecting our ability to deliver our target returns. Most importantly, the outlook for global and diversified business like ours remain exceptionally strong, driven by the most robust energy demand growth we have seen in decades.

We continue to see a significant supply demand imbalance for energy throughout the regions in which we operate. And it is becoming increasingly clear that solving this imbalance will require substantial expansion of many forms of energy generation, but with low-cost, quick-to-market renewables technology is well positioned to provide much of this needed build-out, in addition to other critical technologies that will support grid reliability.

Our business is well positioned to meet -- to help meet this exponential demand and support grid reliability with our over 230 gigawatt pipeline of projects which includes significant battery storage solutions, our global fleet of operating hydro facilities and through Westinghouse, our leading nuclear service business.

Turning back to our performance during the quarter. We delivered strong financial results and executed on our commercial initiatives and growth plans, all while maintaining the strength of our balance sheet. We delivered FFO per unit that was up 10% year-over-year and continue to expect to deliver on our 10%-plus FFO per unit growth target for the year.

We were successful in advancing our commercial initiatives, securing contracts to deliver an incremental 4,300 gigawatt hours per year of generation in addition to signing the Hydro Framework Agreement. We progressed our development activities and commissioned approximately 2.1 gigawatts of new renewable energy capacity in the quarter and anticipate bringing on approximately 8 gigawatts in 2025, which will be a record for our business.

We have also continued to execute on our asset recycling initiatives. And since the start of the second quarter, we sold assets for expected proceeds of approximately $1.5 billion or $400 million net to Brookfield Renewable, all at strong returns. Based on our advanced pipeline, we expect total asset sales proceeds in 2025 to exceed last year with returns at or above our targets.

Illustrative of the increasing and recurring nature of asset monetizations as a highly accretive way to fund our future growth. The outlook for our business remains robust, driven by exceptionally strong demand for power that will necessitate the development of all forms of energy. With our globally diversified portfolio across hydro, wind, solar, nuclear and battery storage, we see strong potential to deepen relationships with the world's largest buyers of power, and this gives us confidence that for our business, the best is yet to come.

With that, we will now turn it over to Wyatt to speak to our recently announced Hydro Framework Agreement with Google and how our strategic operating portfolio and deep capabilities across renewables technologies has positioned us as the partner of choice to the largest buyers of power globally.

Thank you, Connor, and good morning, everyone. This past quarter, we reinforced our position as the energy solutions partner of choice to the global technology players with the signing of a first-of-its-kind agreement with Google to deliver up to 3 gigawatts of hydroelectric capacity across the United States. This framework agreement follows on our landmark framework agreement with Microsoft that we signed last year to deliver over 10.5 gigawatts of renewable energy capacity and is a testament to our unique capabilities while also demonstrating our credibility with the largest buyers of power in the world.

The agreement is also notable as it reflects a trend in how the hyperscalers are procuring power. Historically, they were focused on contracting new build, wind and solar. However, in the current environment, we have seen them extend their procurement of power to include hydro and nuclear generation at scale as a complement to their continued strong demand for low-cost and quick-to-market wind and solar.

We have already signed the first two contracts under the Google Framework Agreement for 670 megawatts of capacity from our Holtwood and safe harbor facilities in Pennsylvania, securing 20-year contracts that deliver strong all-in prices and provide a near-term path to up financing, which will generate significant proceeds to deploy into further accretive growth. We also have another 300 megawatts of hydro capacity we are presenting to Google this year that we expect to contract at similarly attractive terms that should provide additional up-financing opportunities.

For the remaining capacity under the framework agreement, we will explore additional contracting opportunities within our existing hydro fleet as well as to pursue potential new hydro investments. Stepping back, as Connor spoke to in his remarks, there is an incredible growth in energy demand that will require any and all solution to deliver the electricity needed in the market.

At the same time, there is also an increasing requirement to match the needs of the grid with the right mix of technologies to maintain reliability. In light of this, we continue to expand our capabilities in low-cost wind and solar generation while also placing emphasis on critical technologies that enable and support broader development of these renewables namely hydro, nuclear and batteries.

By continuing to grow our capabilities in these technologies, we are further positioning ourselves for large-scale partnerships that deliver the needs of our customers, while at the same time, earning strong risk-adjusted returns in line with our expectations. Furthering our strategy of growing in critical technologies to provide clean baseload power to support the grid, in July, we reached an agreement to invest up to $1 billion to acquire an approximately 15% incremental stake in our Colombian Hydro platform, Isagen. This accretive transaction enables us to increase our interest in an irreplaceable fleet of primarily hydro assets that generate 24/7 baseload power and deliver significant, stable and contracted cash flows.

The business generates almost 20% of Columbia's electricity, and we continue to identify opportunities to drive performance improvements by leveraging our commercial relationships, marketing expertise, and building out incremental renewable generation in the country.

The investment is anticipated to be approximately 2% accretive to our FFO in 2026. In addition to our growing hydro fleet, we own Westinghouse, which services approximately 2/3 of the world's nuclear power fleet and whose technology is the basis for approximately half the operating nuclear reactors globally, providing us exposure to another critical technology required to meet the needs of today's grid.

Beyond Westinghouse core fuel and reactor services business, Westinghouse provides design and engineering for new build reactors without taking on certain nuclear-specific newbuild risks. U.S. government recently announced executive orders to significantly grow nuclear capacity in the country and Westinghouse as the U.S. nuclear champion with the most advanced utility scale reactor technology that is operating today is well positioned to help deliver on these objectives.

Lastly, in the first quarter, we closed our acquisition of Neoen, which significantly expanded our battery capabilities and made us one of the largest operators and developers of battery storage solutions globally. This enhanced the suite of energy solutions we can offer to our customers and is leading to more opportunities across our business, both in terms of M&A opportunities, but also within our existing fleet.

Going forward, we will continue to be active investing in the critical technologies that are required to support growing energy demand and the reliability of the grid. In addition to low-cost wind and solar and expect to expand our partnerships with the largest buyers of power on large-scale framework agreements, like the ones we executed with Google and Microsoft to date, as well as on a project-by-project basis.

With that, I will pass it on to Patrick to discuss our operating results and financial position.

Thanks, Wyatt. And good morning to everyone on the call. Our business performed well this quarter, delivering funds from operations of $371 million or $0.56 per unit, an increase of 10% year-over-year driven by strong hydro generation and execution of our growth initiatives over the past year, which more than offset the impact of asset sales we completed in the last year.

Our hydroelectric segment delivered strong growth with FFO up over 50% from the prior year on strong performance from our U.S. and Colombian fleets with hydrology that was above the long-term average. The outperformance reflects a rebound from a challenging prior year for hydrology and is in line with our expectation of a reversion to the mean over the long term. The strong performance for our hydros bodes well for our overall results in 2025 and going into 2026, given the typical multiyear cycle we see in the hydrology of our fleet.

Our wind and solar segments performed well with FFO essentially flat compared to the prior year. As newly commissioned capacity and the closing of our investment in National Grid's renewables business in the U.S. during the quarter, was offset by lower FFO due to asset dispositions and gains on the sale of development assets in the prior year.

Our distributed energy, storage and sustainable solutions segments delivered strong performance with FFO up almost 40% year-over-year, driven by strong results from Westinghouse. As the business continues to benefit from the growing global demand for nuclear energy. Turning to our financial position. We ended the quarter with $4.7 billion of available liquidity across the business. providing strong financial flexibility for the franchise.

Our balance sheet continues to be top tier in the sector, and we remain committed to a prudent financing approach, enabling us to pursue growth opportunistically. In light of the exceptionally robust demand for our assets and businesses we are seeing today in the capital markets, we continue to proactively pull forward financings across our business, including a number of up-financing opportunities.

This should provide additional liquidity earlier than expected to fund accretive growth across the franchise. Year-to-date, we have successfully completed $19 billion of financings across the business extending maturities and optimizing our capital structure with a couple of noteworthy financings in the quarter. In June, we were successful issuing CAD 250 million of 30-year hybrid notes at the tightest corporate hybrid new issue spread ever in Canada in an offering that was several times oversubscribed.

The issuance aligns with our strategy of conservatively accessing the market to optimize our capital structure as our cash flows increase. Also during the quarter, we successfully executed Brookfield Renewables largest-ever project financing, raising EUR 6.3 billion for our offshore wind development project in Poland.

Lastly, we further demonstrated the strong demand for our high-quality assets, raising a $435 million long-term fixed rate private placement for a strategic U.S. hydro asset at our lowest spread in 5 years for this type of financing.

This again was an offering that was multiple times oversubscribed. These financings are indicative of the strong support from lenders for our derisked infrastructure assets and indicates how our significant access to capital continues to be an enduring competitive advantage. In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors, while remaining disciplined allocators of capital and leveraging our strengths to access unique opportunities in the most attractive technologies and regions.

On behalf of the Board and management, we thank all our unitholders and shareholders for their ongoing support. We are excited about Brookfield's Renewables future and look forward to updating you on our progress throughout the year, including at our upcoming Investor Day in Toronto on September 25.

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.

And our first question comes from the line of Nelson Ng from RBC Capital Markets.

Congrats on a strong quarter. So the first question is like, I think it's already well known that there is a big demand for power and the lack of supply. But in light of the results from the recent PJM auction and the high capacity payments, are you able to accelerate the pace of development in that area? Or are you making any changes in, in the U.S.? And are you able to further kind of leverage your footprint in that region? .

And thanks for the question, Nelson. In terms of what we saw recently in the capacity auction in PJM, we would simply say it's indicative of that supply-demand imbalance that we're seeing in most of the regions we operate around the world, just with the capacity auction, the results get published, it creates a really formal portrayal of a dynamic we've been seeing on the ground in a number of places that we think is going to continue for years to come.

In terms of how we leverage our existing position and look to pull things forward, two comments to be made there. Make no mistake, in this market where there is a supply-demand imbalance the shortage is not capital. The shortage is not demand. The shortage is having available to build projects and we are tackling this three ways.

One, everything we can, we are pulling forward as quickly as possible. That has very much been true for a couple of years now, and we'll look to continue to be true for the foreseeable future. Secondly, we will continue to use our M&A capabilities and our access to capital to add more projects and more pipeline in the regions where we are seeing the greatest amount of demand.

And then thirdly, I would highlight our framework agreements and partnerships with the largest buyers of power around the world because what those partnerships allow us to do is get a very intimate knowledge of where those buyers of power where their future needs are. And really, what it does is it gives us a hunting license, if you will, to either develop or acquire with greater confidence in regions where we essentially know there is a backstop level of demand. And therefore, we're already pulling everything forward as fast as possible, but we're looking to use the growth levers as our franchise to look to do more in those markets where we see that supply demand imbalance persisting in the longer term.

So just to follow up on that. I noticed in your development pipeline that the amount of projects being commissioned in North America in 2025 is, I think, roughly 2.7 gigawatts that reduces a little bit to 2.4 in '26, and then it more than doubles to 5.4 gigawatts in 2027. Is that just purely timing? Or are there kind of other forces at work in terms of that profile.

That's purely timing. Our development pipeline is made up of -- I'll start and if Wyatt wants to add anything he can. But our pipelines that we produce in our supplemental are really backed by list of specific projects that have various interconnection and COD dates. I make no mistake, if you were to draw a trend line across our North American region. It is very consistently kind of up and to the right, but the specifics of one year to the next are based on the individual underlying projects and when they're going to come online.

Okay. Got it. And then just one last question. Just based on your discussion with big tech companies and the big hyperscalers, like how do they balance the need for base load versus intermittent renewable energy .

The large technology companies are undoubtedly the largest buyers of power and are certainly ones who are adding the incremental marginal demand due to the growth of AI and the growth of the data center fleet around the world, but particularly in the U.S. And therefore, they without a doubt, are looking to secure as much generation as possible. And while we often talk about them as a specific industry, the point we would make is the demand is broad-based.

It's driven first and foremost by the tech companies, but we're seeing this across all segments of the economy. The second point we would make is we are seeing an absolutely growing sophistication and increased demand for things beyond what I will say, pay-as-produced generation. And we absolutely encourage this and think it puts Brookfield in a fantastic situation.

We're seeing more demand for 24/7 power. We're increasingly seeing contracts that used to be pay-as-produced generation -- now the offtakers want the power and the REX. Increasingly, now we're seeing the contracts include the capacity component that comes with some of these revenues and some of these assets. And all of that plays to our strengths given our diversity across technologies and in particular, our large flexible operating base that can be mixed with I'll call it, vanilla wind and solar to meet these evolving demands of the market. So absolutely, it is increasing. We actually encourage it and view it as a very important way that Brookfield Renewable will continue to differentiate itself.

And our next question comes from the line of Sean Steuart from TD Cowen.

First question, Connor, you touched on feeling pretty good about your U.S. pipelines tax credit eligibility through 2029. And I guess the question is, I suppose that's the read relative to the reconciliation bill. Do you have any thoughts on the Trump's executive order? And if any potential changes to FIAC criteria might change the parameters of, of tax credit eligibility for your pipeline?

So we continue to monitor the review that's ongoing. We feel very comfortable with our position. And perhaps more importantly, if anything unexpected came out of that review, we are extremely confident that we are as well positioned as anyone else or best positioned to leverage our global supply chain and our different relationships to evolve as needed. And we stand here very confidently that we will be able to secure tax credit eligibility for essentially the entirety of our U.S. pipeline out through the end of the decade.

Sean, I don't know if this was part of your question, but -- after -- you mentioned we focus on out to 2029. The important thing within our business to recognize is as we have seen in recent years, -- there is -- due to the supply imbalance we are seeing in the market, we are able to pass through any changes in construction costs up or down, whether that be CapEx costs, whether that be the inclusion or removal of tax credits, whether that be funding costs. We've been able to push that through to the end customer by changing the price of the PPA.

We've been able to push through cost decrease as well as cost increases always well preserving our development margin. The one place that we're very, very constructive is because of the visibility out to 2029, that gives the market and ourselves as a developer more than enough time to include any price increases as needed for projects out more than 5 years away now. And really what it gives us confidence is within our U.S. business, we'll be able to preserve our development margins for the foreseeable future.

That's useful. Second question for you, Connor, for Wyatt. -- to fulfill the full 3 gigawatts under the Google framework agreement, you touched on it would require some M&A. And I'm wondering if you can speak to the hydro M&A environment in the U.S. right now. And how you expect to navigate that opportunity set going forward?

So we're actually seeing the hydro market after I would say, an extended period of inactivity becoming more and more liquid. And obviously, hydro are scarce assets. But it's also hydro operating capabilities are scarce as well. And we've been buyers, owners, operators of hydros for 4 decades. And really, I'll use the same word again. What our arrangement with Google does is it gives us a hunting license, if you will, to pursue opportunities in hydro when they become available when they fit the parameters of that framework, we can pursue those opportunities with confidence.

And one thing we would highlight is there is the opportunity, but not the obligation to deliver those incremental megawatts. So we will continue to be disciplined. But I would say it's certainly another competitive advantage for us as we look to grow our strategy.

Yes. And Sean, it's Wyatt here. The only thing I would add is, look, like with that additional capacity -- it could be that it's all fulfilled with our existing fleet. We do have that capacity that is available to contract. Really, it's just a matter of -- is it in the right region that Google would want it as an offtake. So it's not to say that it requires us to do M&A to fulfill it.

It's just we have the optionality, right? And it's really predicated on meeting the needs of Google and working with them over the next number of years to figure that out, but we have the option of the existing fleet or to use it for M&A.

[Operator Instructions] Our next question comes from the line of Mark Jarvi from CIBC.

Just coming back to the conversation around PJM. The pricing signals are very encouraging, but it also represents the fact where it's harder to get assets through the interconnection in [ Permian ]. So I'm just thinking how you guys are adapting some of the challenges in the U.S. market and talking to your large customers. Are you starting to prioritize other regions where transmission, land procurement, ability to build is easier? Like are you shifting to places like Texas where some of the gigawatt scale data center complexes are trying to push forward? .

Mark, thanks for the questions. If I could perhaps answer back to you, the comment I would say is we continue -- it's not that we're starting. We continue to take into account speed of connection into our development activities and our interactions with our customers. Take a market like PJM I know it's a little bit dated now, but we bought a platform Urban Grid, a number of years ago, purely because it had such preferential interconnection queue positions in an increasingly congested market.

So I would say it's not a realization of a problem and a reaction to pursue elsewhere. It's a recognition of a dynamic that has been ongoing and will continue to exist and simply including that in both how we grow inorganically through M&A and how we look to develop as we look to meet the growing needs of our customers.

It's something we've been doing for years and that we'll continue to do. Make no mistake about it. You can't start a project in some markets right now and expect it to COD for a customer anytime in the near term.

Something like the Urban Grid platform, is that something you can continue to lean on? Or have you sort of exhausted, but largely taking advantage of their preferential interconnection queue and siding positions. Or is that a business that continues to create more upside on the competitive advantage in the PJM market for now?

Even less specific to Urban Grid, I think buying businesses and development platforms that take into account and have really good knowledge of how interconnection grids work, how queue positions will be -- how queue positions will be turned into pulling assets out of the ground. Those capabilities are recurring. We felt in that example that we were buying an underappreciated asset because of their existing connections, but that and our other platforms continue to add pipeline in the highest value markets across the United States. And that's what gives us that pipeline of being able to pull multiple thousand megawatts out of the ground each year. It's really based on decisions and positions that we took years ago.

Okay. And then maybe turning to Europe. It seems like a cost decline on batteries and solar create some tailwinds on the economic case for deployment there. We've heard some other developers ramp-up activity just with Neoen and other platforms you have in Europe, are you able to grow faster on the organic side? Or is M&A something you'd have to look to more in Europe to take advantage of potential economic tailwinds there?

The comment about batteries, battery CapEx costs have gone down more than 60% in the last 24 months, while at the same time, increasing renewable penetration has created the need for more grid-stabilizing services, you have a dynamic where costs are going down at the same time as revenues are going up in almost every market around the world. And therefore, the commercial case, the economic case for batteries is pretty incredible today in most markets we look at. And therefore, across every single development platform at Brookfield, we have implemented a battery strategy over the last 12 months.

We are, of course, doing things to supplement that, looking at either battery acquisitions or platforms that do focus on energy storage and that was undoubtedly a key feature of the acquisition of Neoen, which is the largest utility scale battery developer in the world. The one point we would highlight about Neoen is well they are a French company headquartered and they -- we privatize them off the French Stock Exchange -- they are a very global developer in terms of where their operations are. And we're certainly leveraging that to drive organic growth in areas outside of Europe as well.

So if you say today where you think the best rate of change in terms of growth on batteries can really accelerate development activities or capital deployment activities, how would you rank to the markets that are really starting to lead your focus right now? .

If I could frame it slightly differently, I think this will be helpful. Batteries are the fastest-growing technology within our platform today. In terms of areas where we are seeing batteries deployed at scale. Candidly, I think the U.S. would probably still be #1 for us, but we continue to see opportunities in other markets, in particular areas where there's very high radiation and very high renewables penetration. So parts of the U.S., obviously fit that bill. Australia obviously fits that bill. Places in Europe, storage is increasingly becoming of interest in Southern Europe. The other place that I would highlight is we're actually seeing a growing number of opportunities in the Middle East as well. .

And given that economic case, would batteries be at the top end of your target IRR range for now?

Yes, absolutely. It probably won't stay there forever. But right now, the returns on batteries are very attractive.

And our next question comes from the line of Mark Strouse from JPMorgan.

Just I wanted to ask a couple of points on your safe harbor business, Connor. Just given kind of the July 7 executive order and potential changes to safe harbor, we'll find out what treasury says here in the next couple of weeks, hopefully. I'm curious, you talked about the -- your safe harboring nearly all of your U.S. projects through year-end '29. Are you able to say how much of that was safe harbored in 2024 and prior? Just our understanding is that the the potential rule change is going to be for 2025 and beyond safe harbors, if there's going to be any change.

So kind of breaking that down? And then secondarily, how are you thinking about that in 2025 kind of weighing spending money now to lock in your credits to the extent that you can maximize that. But on the other hand, not looking to overspend in the event that rule changes are draconian.

So a few things to unpack there. What I would say is in terms of our safe harbor strategy for our U.S. platform. As mentioned, we have an expectation that we will be able to safe harbor almost all of that -- the vast majority of that is done. I can't tell you a specific as of what date, but the vast majority of it is already completed and some of the components of our pipeline where it's not completed are things that maybe don't need safe harboring, i.e., some of our battery projects and things like that, which had more favorable treatment under the latest rules.

The -- in terms of your comment just around the process used to execute our safe harboring strategy. The point we would make there is we obviously want to remain very true to our approach of only putting capital in the ground when we can lock in both revenues and costs at the same time. That has served us very well across cycles, and we want to stay true to that. So when we look to execute this safe harbor strategy, we look to do it first and for by using the offsite on-site physical work test, approach and only secondly, by pulling forward CapEx.

And therefore, the way we do that only requires a modest amount of CapEx than it otherwise would have. It's in the grand scheme of our total organic development spend, the cost of safe harboring, the incremental cost of pulling forward CapEx to safe harbor of these projects is not particularly material.

And our next question comes from the line of Jon Windham from UBS.

I would just be interested in hearing your thoughts on what the key milestones are over the next year for nuclear development, things we should keep an eye on for the Westinghouse business. .

So in terms of the Westinghouse business and perhaps I'll start and then why it the developments in the U.S. are certainly the most interesting, so perhaps hand to you. But the way to think about our Westinghouse business is when we made the investment, we -- we really think of it as 2 components.

One, it has an existing product services and technical capabilities to the existing nuclear operating fleet around the world and that provides incredibly long-term stable inflation-linked cash flows as nuclear reactors simply run, refuel, refurbish lifetime extensions, things like that. And all of that is, of course, trending in the right direction right now given the existing nuclear fleet around the world.

What is the new dynamic that has accelerated in the last 3 to 4 years is new build nuclear. And the joy for Westinghouse is it plays an absolute leadership role in that activity as well. That's new build of large reactors, SMRs or even micro reactors as well. And what we're seeing around the world is governments and corporates increasingly looking to large-scale nuclear to meet their electricity and their baseload demand.

And in particular, we're seeing that activity most dramatic, I would say, in Europe and the United States. And what you saw in our results this quarter is while the ongoing business, the core services business of Westinghouse is very, very stable and growing as we do more Westinghouse activities related to the growth of new nuclear, that will provide significant upside in our financial results as they execute on some of those types of activities.

And it was certainly growth of new nuclear in Europe that drove the successful outperformance this quarter. In terms of key milestones, while I'll hand to you, but I do think that the one to look for is growth in the United States as the government has been very vocal about their intention to start the build of 10 new reactors before the end of the decade, with Westinghouse as the U.S. nuclear technology in the global champion, it certainly looks to be on the front foot of that.

And we would expect that demand to come from both governments and from corporates which is probably the most notable inflection change we're seeing in the industry. Wyatt, anything you'd add to that?

Look, I would just reemphasize that last point about the U.S. As Connor mentioned, we're seeing very meaningful demand on a global basis. Westinghouse has made very good progress in Europe as an example, where we're advancing projects in Poland. There's very forward momentum in Bulgaria. We have a project or we have our technology -- underlying technology is being used in the Czech Republic. So there is very good progress on a global basis. But as Connor mentioned in the U.S. is where we see a very meaningful focus out of the current administration.

Recently, there was an executive order that was issued where with the goal of starting construction, as Connor mentioned, on 10 gigawatt scale reactors by the end of the decade. And really where that position Westinghouse is probably the most credible provider of that underlying technology is it really positions that Westinghouse very meaningfully to benefit from that.

And as you may have seen around the energy innovation summit that was recently held in Pennsylvania, where President Trump and the Senator of Pennsylvania attended, the focus around those 10 large-scale gigawatt reactors is critical to the administration's goal of being a leader in AI. And so from that perspective, the business as well as the shareholders being both Brookfield and Cameco, our partner in the investment are working very closely with the various stakeholders.

And you can imagine that's a mix of government, that's a mix of utilities as well as the offtakes and primarily at the hyperscalers, but we are working very meaningfully to be able to bring forward something in the very near term that should give you a sense of what that could translate to in terms of Westinghouse and then the broader benefit to Brookfield.

And our next question comes from the line of Jessica Hoyle from Scotiabank.

So just to start, you touched on this a little bit, but just given the CapEx increases that we're seeing from the tech companies, -- how have discussions regarding new facilities or contractual frameworks changed in recent months. .

Perhaps the thing that is most notable to us, we're going to sound like a broken record is the numbers and the quantum and the demand simply continues to go up. But maybe there's 2 or 3 things to highlight. One, we're seeing much more increased appetite for new technologies beyond just wind and solar.

Our hydro framework is certainly illustrative of that and no doubt in relation to the previous question, the conversations around nuclear are certainly accelerating. The other point that is really showing up out of these conversations is the importance that the large tech companies, the hyperscalers are putting on broader relationships.

Make no mistake that the procurement of power is now undoubtedly the bottleneck on the critical path to growth for their cloud and AI businesses. And they don't -- they increasingly want to look to derisk that growth path by partnering with the largest and most capable counterparties -- and therefore, when we talk about something like our hydro framework with Google, while the framework in itself is exciting, it is important to recognize that it is simply one component of an increasingly broad and integrated relationship that spans wind, solar. We have retail power agreements with some of the tech companies. Those relationships are becoming much larger and much more integrated. That's probably the biggest change we've seen in recent months.

And then can you talk a little bit about whether the changes in tax credits have altered the M&A market for renewable developers, specifically in the U.S. .

It's an interesting question because we would highlight that -- we completed a transaction earlier this year, acquiring a platform of national grid in the United States that we're absolutely thrilled about and really reinforces some of the messages we've been making on this call about buying high-quality developers with advanced pipelines in the key regions around the United States.

What's interesting is M&A activity in the U.S. has been a little bit subdued year-to-date, and we would chalk that up mostly just to some of the market noise and uncertainty around the timing of new regulation and tax regimes and executive orders and reviews. We very much expect there to be a very significant increase in M&A activity within the power space in the renewable power space in the United States over the next 12 months.

We see huge demand for power, which means huge demands for CapEx, which many of the existing platforms very simply don't have access to capital to fund -- and therefore, we do see a pretty large pipeline of M&A developing that we are certainly excited to review and participate in when it makes sense for our business.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Connor Teskey for any further remarks.

Thank you very much for joining our call and your interest in support of Brookfield Renewable. We look forward to updating you on our Q3 results in 3 months' time, but hopefully, we'll speak to you at our Investor Day at the end of September. Thank you, and have a great day. .

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.