Duke Energy to sell renewables arm to Brookfield Renewable for US$2.8 billion

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The Duette solar facility in Florida, which Duke Energy expanded in 2021. Credit: Duke Energy

US power company Duke Energy has agreed to sell its clean power arm to US renewable operator Brookfield Renewable in a deal valued at US$2.8 billion.

The sale of Duke’s “commercial renewables portfolio” will see around 5.9GW of renewable capacity change hands across wind, utility-scale solar and battery storage projects. Prior to the deal, which is expected to be completed by the end of this year, Duke Energy operated 1.5GW of utility-scale solar, covering projects in development and in operation, across the US.

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The deal is Brookfield’s latest acquisition in the renewables sector, following years of deals for renewable power, including a 2019 deal to invest in X-Elio, which operated 3GW of solar power at the time of the deal.

Moves such as this have brought the capacity of the company’s renewables portfolio up to 24GW, although Brookfield’s solar projects have historically been of lower capacity than those in other renewable sectors. Prior to the Duke deal, Brookfield owned 2.3GW of solar capacity, and the acquisition will help bring the company’s solar output closer to that of these other sectors, such as its 8.1GW hydropower portfolio.

“With this acquisition, we are adding a scale operating renewable platform located in highly attractive markets that we expect will immediately contribute meaningful cash flows with significant upside from potential asset repowering and synergies,” said Connor Teskey, CEO of Brookfield Renewable.

The deal is significant for the money involved and the scope of the renewable capacity being moved, and fits with Duke’s recent plans to transition away from power production and towards renewable infrastructure. The company announced that the deal would yield net proceeds of US$1.1 billion, and that it would invest this into grid infrastructure as it looks to add 30GW of renewable energy into its portfolio by 2035.

Duke has already announced plans to invest US$7 billion into renewable infrastructure in Florida, plus US$3.4 billion into the Indianan grid, and its plans to divest from its power generation business could be motivated by a period in which its total revenues fell, but the value of its assets remained high, suggesting that its power generation facilities are of greater value than the electricity they are producing.

Between 2021 and 2022, PV Tech notes that the company’s net cash flow fell from US$8.3 billion to US$5.9 billion, while the value of its assets increased slightly from US$169.6 billion to US$178.1 billion.

“As one of the country’s largest renewable energy operators, Brookfield has the resources to support the continued growth and success of the commercial renewables portfolio,” said Lynn Good, Duke Energy chair, president and CEO.

“This sale is an important step in our transition into a purely regulated company with significant grid and clean energy investment plans that will deliver benefits to our customers and stakeholders.”

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