Brookfield Renewable(NYSE: BEPC)(NYSE: BEP) has become a force in the clean energy sector. The company has built a diversified platform with nearly unmatched scale and expertise across geographies and technologies. That's increasingly making it the partner of choice for companies seeking to secure enough power to meet their future energy needs.
The opportunity to supply clean power to corporations has never been greater. Few companies are in as strong a position to capitalize on this trend as Brookfield Renewable. Because of that, the company expects to grow rapidly for many years to come.
A historic opportunity
Brookfield Renewable's CEO Connor Teskey discussed some of the factors powering the surging demand for electricity in the company's fourth-quarter letter to investors. He wrote:
Broader market conditions continue to be very constructive for us, with electricity demand accelerating significantly, led by corporate customers and specifically the global technology players, who continue to invest vast sums of capital in the build-out of data centers to enable digitalization and AI supported applications. Investment by these firms grew 50% year-over-year in 2024, and it is expectedthat this will continue to increase tremendously throughout the rest of the decade.
Those data centers require a tremendous amount of electricity, especially to run AI applications. That's leading these companies to lock in their future electricity needs by signing long-term power purchase agreements (PPAs) with major power producers. For example, Microsoft signed a global renewable energy framework agreement with Brookfield to develop over 10.5 gigawatts (GW) of new energy capacity in the 2026 to 2030 timeframe. That's a staggering eight times larger than the prior record for a corporate PPA. Microsoft also signed a 20-year, 835-megawatt deal with Constellation Energy to support the restart of that company's Three Mile Island Unit 1 nuclear reactor. This power will help support the technology titan's cloud and AI growth.
Teskey also noted:
[A]ctions taken by the new U.S. administration to drive greater industrial, manufacturing, and data center activity in the U.S. are expectedto dramatically accelerate electricity demand in the country. As this demand is incremental to the generational step-change in electricity demand that was already taking place, we believe the growth prospects for low-cost, mature renewables technologies are better than at any point in history[.]
The clean energy supermajor
Teskey believes this generational opportunity for renewable energy development will "significantly benefit those with existing and actionable large-scale pipelines of development projects that are available to meet this opportunity." The CEO believes: "In this environment, we feel few, if any, are as well positioned as us."
Brookfield has invested heavily over the years to expand its global scale and build out its development capabilities across technologies. For example, last year, the company and its partners agreed to deploy $12.5 billion across several opportunities, including acquiring leading renewables developer Neoen, buying an interest in a portfolio of Ørsted's operating wind assets in the U.K., and investing in eFuels manufacturer Infinium. Those deals added significant operating cash flows and an attractive pipeline of development projects.
"These transactions further cement our position as the preeminent global clean energy supermajor with an unmatched set of solutions, scale, and global reach that we can offer our partners," Teskey wrote in the shareholder letter. He further commented: "In a market with unprecedented corporate demand for electricity, our platform increasingly is gaining a competitive advantage, differentiating our growth prospects and ability to invest for value."
That's apparent in the record-smashing Microsoft deal, and in other smaller (yet still sizable) PPAs Brookfield Renewable is signing with other companies. The CEO noted that the company signed deals to deliver over 100,000 gigawatt-hours of generation to commercial and industrial customers last year.
That number will likely continue growing, as Brookfield has become "the partner of choice for the largest buyers of clean power globally," due to its global scale and operating and development capabilities. The company has an astounding 200 GW of projects in various stages of development around the world (more than four times its current operating capacity of 46 GW), putting it in a strong position to help meet the growing power needs of its customers.
Supercharged growth ahead
Brookfield Renewable believes it can grow its funds from operations per share at a more than 10% annual rate over the next decade. That growth is highly visible and secured for the next several years due to rising power prices (via inflation-linked contracts and capturing higher market rates as legacy PPAs expire) and its secured development projects.
Add that to its attractive and growing dividend (5.7% yield and 5% to 9% annual growth target range), and Brookfield could have the power to produce total annualized returns in the mid-teens over the coming decade. That makes it a top energy stock to buy and hold for the long haul.
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Matt DiLallo has positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends Brookfield Renewable, Brookfield Renewable Partners, and Constellation Energy and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
