Canadian energy infrastructure heavyweight Brookfield Asset Management has moved to become a major green power player in the U.S., with its renewables unit buying Richmond, Va.-based Urban Grid for $650 million.
Brookfield’s deal for the developer of utility scale U.S. solar plants and energy storage boosts its clean power portfolio, with projects in 12 states, the company said in late January. Its pipeline includes 13 GW of solar power capacity and 7 GW of energy storage, with about 2 GW under or near construction, and about 4 GW worth of “de-risked advanced stage build out opportunities,” that could be constructed in the next six years as energy buyers adopt reduced carbon emissions targeted, Connor Teskey, CEO of its renewables unit, told analysts in a Feb. 4 earnings call.
The total gives Brookfield Renewables about 31 GW of clean energy project potential in the U.S., including hydropower, wind, solar and energy storage. The firm says it is “one of the world’s largest publicly traded, pure-play renewable power platforms,” with 21 GW of clean energy installed and 56 GW in its pipeline.
It is 60% owned by Toronto-based Brookfield Asset Management, which claims overall energy infrastructure assets totaling $650 billion in value. Its Brookfield Infrastructure unit won a multibillion-dollar bidding war last August for Inter Pipeline Ltd., a Calgary, Alberta, fossil fuel extractor, transporter and project developer.
Teskey said said the deal will link Brookfield into high-value power markets like the PJM Interconnection grid, which stretches from Maryland to Illinois, and the Midcontinent Independent System Operator system, across the Midwest. He said its solar projects in development have “positions in the interconnection queue, which in turn, are “specifically valuable in the PJM market.”
Teskey added, “The reasons we are excited about this transaction are numerous.” Urban Grid will continue to operate under its brand, said its CEO, Frank DePew.
Urban Grid’s strength is in project development, “securing land, interconnection and permits, the early-stage component of development,” Teskey said, adding that Brookfield Renewables is stronger in corporate power purchase agreement procurement, power marketing, financing and construction.
Montreal-based energy financial analyst Naji Baydoun of iA Capital Markets said the deal “further extends [Brookfield's] growth runway in the U.S.”
But other clean energy sector observers note current and looming construction delays from supply chain and component import bottlenecks, uncertain federal tax credits and lengthy grid interconnection due to overcommitment and upgrades needed in existing infrastructure.
