What happened
Brookfield Renewable Partners (BEP 2.05%) had a good year in 2020, and its stock price reflected that, rising about 75% for the year. But investors rotated out of alternative energy names in 2021, and Brookfield Renewable was no exception. Shares are down more than 20% in just the last three months. But the company reported strong earnings last week, and with market sentiment behind more renewable energy names today, shares jumped more than 5% as of 3:30 p.m EDT.
So what
Last week, Brookfield Renewable reported funds from operations (FFO) -- a widely accepted measure of cash generation for asset-heavy businesses -- grew 21% in the first quarter of 2021 compared to the prior-year period.
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In the first quarter, Brookfield also said it invested or agreed to invest about $400 million of its own equity in transactions for onshore and offshore wind, utility scale solar, and generation assets in the United States, Europe, and India. As general market sentiment is warming back in the sector, Brookfield shares are regaining investor interest today.
Now what
The Biden administration has said it has a goal of creating 30 gigawatts (GW) of U.S. offshore wind capacity by 2030. It took a step toward that this week, when the U.S. Department of the Interior approved the first large-scale offshore wind project in the U.S.
Brookfield Renewable is ready to take part in that growth. In its first-quarter release, it offered some background on the offshore segment, stating: "For the past several years, we monitored the offshore wind sector, while not investing. But as the technology has grown and matured, we have become more comfortable."
The company told investors that in the first quarter, it closed its first offshore wind investment, which it said includes a pipeline of projects to build 3 GW of capacity it feels is "supported by an attractive contract structure, over the next several years." Investors seem to be recognizing the growth potential after the stock retrenched prior to today.
