Executive Summary / Key Takeaways

• Brookfield Renewable Corporation ($BEPC) stands as a global clean energy supermajor, strategically positioned to capitalize on the accelerating, "insatiable demand" for electricity driven by the AI revolution, digitalization, and broad-based electrification.
• The company's diversified portfolio, spanning hydroelectric, wind, solar, battery storage, and nuclear services (through Westinghouse), provides a robust technological edge, offering low-cost, reliable, and scalable power solutions critical to meeting this surging demand.
• Recent financial performance highlights strong growth, with Q1 2025 FFO per unit up 15% (adjusted) and a 10% FFO per unit increase for the full year 2024, underpinned by record capital deployment and highly accretive asset recycling.
• Strategic acquisitions like Neoen and National Grid Renewables, alongside landmark partnerships such as the 10.5-gigawatt framework agreement with Microsoft (MSFT), are accelerating BEPC's development pipeline and solidifying its role as a partner of choice for major corporate off-takers.
• Despite public market volatility and potential policy shifts, BEPC's fortress balance sheet, global procurement network, and disciplined capital allocation strategy enable it to mitigate risks like tariffs and permitting delays, while targeting 12% to 15% long-term total returns for investors.

The Energy Transition Supermajor: Powering a Data-Driven World

Brookfield Renewable Corporation (BEPC), a subsidiary of Brookfield Renewable Partners L.P., has evolved into a preeminent platform for renewable power and decarbonization solutions. Its journey, marked by consistent annual distribution growth since its public listing in 2011, reflects a strategic expansion that began with entries into markets like India and the U.K. in 2017. This foundational growth has culminated in BEPC becoming a global clean energy supermajor, boasting a diversified portfolio of hydroelectric, wind, utility-scale solar, distributed generation, and storage assets, complemented by its significant investment in Westinghouse's nuclear services.

The global energy landscape is undergoing a dramatic transformation, primarily fueled by the AI revolution, digitalization, and reindustrialization. This confluence of factors is driving an accelerating demand for electricity that far outpaces current supply. Management highlights that global electricity consumption from data centers alone is estimated to increase from approximately 2% today to 10% of total demand by 2030, necessitating additional generation capacity equivalent to the entire current U.S. grid. This "generational step change" in energy demand underscores the critical need for scalable, low-cost power solutions, positioning renewables as the most viable and cost-competitive option.

Technological Edge: Powering the Future with Diverse Solutions

BEPC's competitive advantage is deeply rooted in its technologically diversified portfolio, which allows it to offer comprehensive, reliable, and low-cost power solutions. The company's strategy is to deploy the most mature and cost-effective technologies across attractive geographies.

The hydroelectric segment serves as a bedrock, providing dispatchable, baseload clean power. These assets benefit from robust demand, as evidenced by recent contracts with U.S. utilities at an average price of almost $90 per megawatt-hour over nearly 15 years. Such contracts are expected to generate significant revenue uplift and up to $500 million in up-financing proceeds, which can then be redeployed into new growth at attractive returns. With 6,000 gigawatt-hours available for re-contracting over the next five years, this segment offers a continuous source of accretive funding.

In wind and solar, BEPC leverages its global scale and relationships with Tier 1 suppliers to develop and operate extensive facilities. These technologies are critical due to their low cost, rapid deployment capabilities, and mature supply chains. The company commissioned approximately 800 megawatts of renewable energy capacity in Q1 2025 and anticipates bringing approximately 8 gigawatts online throughout 2025, more than doubling its commissioning rate from three years prior. This aggressive build-out is significantly de-risked, with the vast majority of its advanced-stage U.S. solar pipeline having secured equipment under fixed-price contracts, mitigating exposure to recent tariff announcements.

Battery energy storage systems and distributed generation are emerging as crucial components for grid stability and transmission availability. Battery costs have declined over 90% in the past decade, making them increasingly lucrative for charging when power is cheap and discharging during peak demand. Through the privatization of Neoen, BEPC has become one of the largest battery developers globally, with 3,300 megawatts of operating and under-construction capacity and an additional 35,000 megawatts in its pipeline. This technological capability allows BEPC to offer differentiated solutions, particularly for corporate clients seeking 24/7 clean power.

BEPC's investment in nuclear services through Westinghouse provides a unique differentiator. Westinghouse is the largest technology product and service supplier to the global nuclear power generation fleet and offers leading reactor technologies, including the large-scale AP1000 and the small modular reactor (SMR) AP300. The AP300 is particularly notable as a downsized version of the proven AP1000, sharing its design, technology, and fuel, thereby avoiding the typical "first of its kind" struggles associated with new SMRs. This positions Westinghouse as a major participant in new reactor growth, benefiting from strengthening tailwinds for nuclear power globally. BEPC is uniquely positioned as the only renewable power player globally that can offer nuclear solutions to complement its wind and solar offerings, a significant advantage when partnering with large corporate clients.

Furthermore, BEPC's global procurement network and focus on domestic U.S. manufacturing are key technological differentiators. Hannah Labuschagne, Global Head of Procurement, emphasizes that the company is "substantially safeguarded against fluctuations in input costs due to our approach to development." Most projects under construction have fixed-price engineering, procurement, and construction (EPC) contracts, and for those with price exposure, PPA clauses enable price adjustments. The estimated impact of tariffs on total project costs is a manageable "very low double digits, maybe in the teens range," which can be passed through to customers. This robust, diversified approach to technology and procurement creates a significant competitive moat, enhancing financial performance through preserved margins and market positioning.

Financial Fortitude: Growth and Capital Discipline

BEPC's financial performance reflects its strategic execution and disciplined capital allocation. In Q1 2025, the company reported strong results, with Funds From Operations (FFO) per unit increasing 15% year-over-year (adjusted for strong prior-year hydro generation) and 7% on an all-in basis. This momentum followed a record-breaking 2024, where full-year FFO per unit grew 10% to $1.83, reaching $1.2 billion in total FFO. While 2023's FFO per unit growth of 7% ($1.67 per unit) slightly missed the 10%+ target due to later-than-expected transaction closings, the underlying trends remain robust.

The company's revenue has shown consistent growth, rising from $3.19 billion in 2020 to $4.57 billion in 2024. However, profitability metrics, such as a TTM Net Profit Margin of -43.72%, indicate the capital-intensive nature of its growth strategy and the impact of non-cash charges and non-controlling interests inherent in its partnership structure.

Similarly, a TTM Free Cash Flow of -$400 million reflects significant ongoing investments in development and acquisitions. These figures, while appearing challenging in isolation, must be viewed within the context of BEPC's aggressive growth and self-funding model, where capital is continuously recycled and deployed into high-return projects. The company's Debt/Equity ratio of 124.04 (TTM) is also characteristic of project finance, where debt is often non-recourse to the parent entity.

BEPC maintains a "best-in-class" balance sheet, ending Q1 2025 with $4.5 billion of available liquidity. This robust liquidity is crucial for its opportunistic growth strategy. The company actively leverages up-financing opportunities, such as the $500 million expected from re-contracting hydro assets, to generate low-cost capital (e.g., ~5%) for reinvestment into new growth and M&A at target returns of 15%. In March 2025, BEPC opportunistically issued C$450 million of 10-year notes at its lowest coupon in five years, demonstrating its ability to access investment-grade corporate debt markets efficiently.

Capital deployment has been substantial, with $4.6 billion committed or deployed in Q1 2025 alone ($500 million net to BEPC), including the privatization of Neoen and the agreement to acquire National Grid Renewables. In 2024, BEPC invested $12.5 billion, exceeding its targets. This aggressive deployment is balanced by a highly successful asset recycling program. In Q1 2025, sales of stakes in First Hydro and the initial phase of its India portfolio generated almost three times invested capital and 20% investment returns. The agreement to sell an additional 25% stake in Shepherd's Plant is expected to generate almost two times invested capital and approximately $200 million. Since 2020, BEPC has generated nearly $6 billion in proceeds from asset recycling, achieving an average IRR of approximately 22% and a 2.1 times multiple on invested capital. This "disciplined and practical approach to asset rotation" is a core component of its self-funding model.

Strategic Initiatives and Competitive Moat

BEPC's strategic initiatives are designed to reinforce its competitive moat and capitalize on the current market dynamics. The company's global scale, diversified asset base, and operational capabilities are key differentiators against both direct and indirect competitors.

In the competitive landscape, BEPC faces established players like NextEra Energy (NEE), a major U.S. utility and renewable operator, and specialized firms like Orsted (DNNGY), a global leader in offshore wind, and Enphase Energy (ENPH), focused on distributed solar solutions. BEPC's global diversification across geographies and technologies provides resilience against regional market fluctuations and technological shifts, a distinct advantage over NextEra's more U.S.-centric approach or Orsted's wind concentration. While NextEra benefits from its larger scale and established infrastructure, BEPC's pure-play renewable focus and international reach offer a compelling alternative for investors seeking direct exposure to the energy transition.

The acquisition of Neoen is a testament to BEPC's strategic prowess. Neoen, a French-headquartered company with a significant presence in Australia, is now the largest renewable power player in Australia, focusing on wind and batteries to meet demand for differentiated load profiles. BEPC expects to double Neoen's commissioning cadence from one gigawatt per year to two and implement an asset rotation program, leveraging its scale for more efficient capital structures, financing, and procurement. Similarly, the acquisition of National Grid Renewables provides BEPC with a fully integrated onshore renewable power operator and developer in the U.S., adding 3.9 gigawatts of operating and under-construction assets and an over 30-gigawatt development pipeline. This mirrors BEPC's successful carve-out of Duke Energy's (DUK) renewables business, demonstrating its expertise in acquiring and integrating large-scale platforms.

BEPC's partnerships with global technology players are a critical aspect of its competitive strategy. The landmark renewable energy framework agreement with Microsoft, committing to deliver 10.5 gigawatts of new renewable energy capacity between 2026 and 2030, is viewed as a minimum, with BEPC expecting to exceed these targets and execute similar agreements with other corporate counterparties in 2025. This ability to deliver 24/7 clean power solutions at scale and across geographies positions BEPC as a trusted partner, differentiating it from smaller developers who cannot meet the immense and complex power demands of hyperscalers. The company's reliability in project delivery, even amidst supply chain challenges, is a "completely underappreciated benefit" that fosters strong, constructive contract terms.

The market currently exhibits a significant bifurcation: robust demand and capital for high-quality, de-risked operating assets, but a scarcity of capital for businesses with ongoing development and construction needs. BEPC is uniquely positioned to exploit this, monetizing mature, de-risked assets at strong valuations and reinvesting the proceeds into accretive new investments, including acquiring undervalued platforms. This strategy allows BEPC to continuously fund its growth pipeline while maintaining financial discipline.

Outlook and Risk Mitigation

BEPC's outlook remains highly positive, driven by the persistent supply-demand imbalance for clean energy. The company is focused on delivering 12% to 15% long-term total returns for investors and expects to achieve its 10% plus FFO per unit growth target for 2024 and beyond. Key operational guidance includes bringing approximately 8 gigawatts of renewable energy capacity online in 2025. The company also anticipates "even larger and more recurring monetizations" in the future, further fueling its growth.

While the renewable sector faces risks, BEPC has robust mitigation strategies. Public market volatility and lower valuations for renewable energy companies, partly due to tariff announcements, are seen as opportunities for BEPC to acquire assets for value, leveraging its strong liquidity. The company's global diversification and procurement network are crucial for mitigating the impact of tariffs, with management noting that increased tariffs on certain equipment (e.g., from Southeast Asian countries) actually support domestic U.S. investment, benefiting BEPC's existing relationships with U.S. manufacturers. Furthermore, the global nature of its business means that equipment made more expensive in one region due to tariffs may become cheaper and more available in other geographies where BEPC operates, providing a "very, very material offset."

Permitting delays, particularly for federal permits for onshore wind projects in the U.S., are acknowledged but deemed a "modest portion" of BEPC's development pipeline and not expected to materially impact its growth plans. The company's strategy of locking in CapEx, revenue, and financing upfront for projects, often including PPA adjusters for tariff or tax credit changes, ensures that development margins are preserved. Management emphasizes that renewables remain the cheapest form of bulk electricity production, providing ample "cushion" to pass through any cost increases to end customers without impacting demand or developer returns. Even potential changes to U.S. tax credits, while closely monitored, are not expected to alter BEPC's development margins or demand, given the fundamental need for low-cost power.

Conclusion

Brookfield Renewable Corporation is a compelling investment thesis, firmly rooted in its ability to meet the escalating global demand for clean, reliable power. The company's strategic blend of diversified renewable technologies, including its unique position in nuclear services, provides a formidable competitive advantage. By consistently executing on its disciplined capital allocation strategy—deploying significant capital into high-growth opportunities while recycling mature assets at premium valuations—BEPC is poised for sustained financial performance.

The company's robust development pipeline, strategic acquisitions, and deep partnerships with the world's largest corporate off-takers underscore its leadership in the energy transition. Despite market uncertainties and geopolitical shifts, BEPC's operational resilience, global scale, and proactive risk mitigation strategies position it to deliver on its ambitious growth targets and long-term total returns. Investors seeking exposure to a well-managed, technologically advanced, and globally diversified clean energy leader should view BEPC as a core holding in a power-hungry world.