Duke Energy Corp. executives have signed a deal to sell their utility-scale unregulated renewable energy portfolio to Brookfield Renewable for nearly $1.1 billion in net proceeds.
The announcement checks a big box for Chair, President and CEO Lynn Good and her team, who last summer brought to market their renewables group—the company’s distributed energy business, valued on Duke’s books at $450 million, also is close to being sold—to lighten Duke’s debts and focus on investments in its regulated businesses. But, in line with other recent renewables transactions involving Eversource Energy and American Electric Power, the deal with Brookfield also calls for Duke to take an $800 million impairment charge to go with the charge of more than $1 billion it took last year.
“Brookfield has the resources to support the continued growth and success of the Commercial Renewables’ portfolio,” Good said in a statement. “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.”
The agreement with Brookfield, which has a total enterprise value of about $2.8 billion, comprises more than 3.4 GW of solar, wind and battery storage assets as well as more than 2 GW under construction. Brookfield will pay Duke in two equal payments, the first at closing later this year and the second 18 months later.
Brookfield executives expect their planned acquisition to quickly lift their cash flows and see opportunities both to repower turbines and to sign new contracts with large commercial buyers.
“We are also adding to our pipeline of renewable development projects, solidifying our position as one of the largest renewable energy businesses in the U.S. with almost 90,000 megawatts of operating and development assets,” said CEO Connor Teskey.
Brookfield Renewable (Ticker: BEP) controls one of the largest publicly traded clean-energy portfolios: Across North America, South America, Europe and Asia, it owns about 31,600 MW of installed capacity and has in development about 131,900 MW of renewables as well as other assets.
Shares of Duke (Ticker: DUK) closed June 12 at $91.39, down slightly on the day. They have lost about 10% of their value over the past six months, trimming the company’s market capitalization to roughly $70 billion.
