Brookfield now a major US renewables player after $2.8bn Duke portfolio acquisition
Canadian investment giant rebrands business as Deriva Energy, eyes growth in second largest global market
Canada’s Brookfield has closed its $2.8bn acquisition of Duke Energy’s 3.4GW unregulated commercial renewables business in the US, relaunching it on Thursday with a new name, Deriva Energy.
“We are now an independent developer, owner, and operator of clean energy projects, with the backing of Brookfield,” said Chris Fallon, president of Deriva Energy. “As part of Brookfield, we have access to capital for growth and a wealth of operating experience.”
On 1 January, Brookfield owned 2.82GW of clean power capacity in the US, 19th most in the industry, according to American Clean Power Association, a national trade group based in Washington, DC.
The addition of Duke’s battery storage, solar, and wind portfolio elevates Brookfield to fifth spot behind NextEra Energy, Berkshire Hathaway Energy, Avangrid, and Enel Green Power.
The US is poised for rapid clean energy growth in the second half of this decade, fueled by lucrative federal tax credits in the 2022 landmark climate law and growing consumer demand.
Duke, among the largest US electric utilities, on 12 June announced the sale of its portfolio to Brookfield Renewable Partners. The utility expected $1.1bn in net proceeds from the transaction and utilise them to “strengthen its balance sheet and avoid additional holding company debt issuances.”
According to Brookfield, the acquisition included 2.5GW of capacity under construction and a 6.1GW development pipeline. Deriva is now a portfolio company of Brookfield.
The deal highlights broader industry concentration of onshore renewables project development and ownership among 10 or so deep-pocketed, large-scale independent power producers led by NextEra able to make money despite financing, interconnection, political, supply chain, and other challenges in the US.
Canadian investors have been active here this decade, sensing opportunity in the world’s second largest renewables market after China.
In March 2020, Canada Pension Plan Investment Board acquired Pattern in a deal valued at $2.63bn and then took it private.
Caisse de dépôt et placement du Québec (CDPQ), the second largest pension fund in Canada, is now majority owner of Invenergy Renewables, which is developing both onshore and offshore wind and solar projects.
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