Brookfield Renewable (BEPC 2.83%) (BEP 1.92%) has been an outstanding passive income stock over the years. The leading global renewable energy producer has increased its dividend payment for 11 straight years, growing it at a 6% annual rate since 2013. The company currently offers a dividend yield of more than 3%, roughly double that of an S&P 500 index fund. 

While Brookfield's dividend income is a big draw, investors shouldn't overlook its sizable growth prospects. Here's a closer look at what's driving the renewable energy company's growth.

The power to deliver higher-end growth

Brookfield Renewable recently reported its second-quarter results. The company grew its funds from operations (FFO) by 10% over the prior-year period. It benefited from strong asset availability, higher power prices, and the positive impact of recently completed development projects and acquisitions. 

That fast-paced growth should continue, thanks to Brookfield's progress on securing additional growth drivers in the quarter. The company agreed to invest $650 million across several transactions, pushing its year-to-date total to $1 billion. Notable recent investments included:

  • A $100 million investment in a leading private owner and operator of critical power and utility assets across the Americas. That company will use those funds to finance its growth and decarbonization initiatives.
  • A $48 million investment to acquire a high-quality solar energy project under development in Brazil.
  • A $22 million investment to acquire a renewable energy park in India.
  • A $70 million investment to buy wind energy assets in Asia that are either ready to build or under construction.

These investments are worth noting because of how they'll impact Brookfield's growth prospects. The company has enough organic drivers -- higher power prices and development projects -- to grow its FFO per share at a 6% to 11% annual rate through 2026. In addition, the company noted that M&A activities could add up to another 9% to its FFO per share each year. With it already securing $1 billion of investments this year, it's on track to deliver growth toward the high-end of its long-term outlook, given its target to invest $6 billion during that timeframe.

Making the transition

The other notable development in the second quarter was the company's progress on its energy transition initiatives. CEO Connor Teskey wrote in Brookfield's second-quarter investor letter:

Our approach to investing in new transition opportunities is similar to how we look at renewable investments. We look for opportunities that are economic without government subsidy, technologically proven, and underpinned by strong macro tailwinds. We focus on situations where our key advantages of access to capital, knowledge of power markets, operating and development capabilities, extensive customer relationships, and global reach can differentiate us as investors and operators. Over time, as more decarbonization products and services scale, we expect transition investments to grow within our portfolio.

The company made its first big stride in expanding its energy transition capabilities by establishing a new carbon management business in the quarter. Brookfield Renewable formed a joint venture with California Resource Corporation (CRC 3.43%) to help that oil and gas company with its energy transition. The partners will fund the development and construction of carbon capture and storage projects in California. Brookfield will invest $100 million in the initial phase, targeting the ability to inject 5 million metric tons of carbon dioxide annually and 200 million tons of storage development. If reached, Brookfield could invest another $200 million into the partnership.

Brookfield sees an enormous opportunity in energy transition and carbon capture and storage. It recently invested in a company developing its first carbon capture project. That company has a sizable development pipeline, positioning Brookfield to benefit from its growth in the coming years. 

The power to produce more passive income in the future

Brookfield Renewable has enough embedded organic drivers to grow its FFO by a high-single-digit rate for the next few years. That's not stopping the company from adding more power to its growth engine, which it did in the second quarter, meaning it could deliver high-end FFO growth in the coming years. That should enable Brookfield to grow its dividend toward the upper-end of its 5% to 9% annual target range, making it an even more appealing passive income stock.