Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Clearway Energy, Inc. Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded.

to Sotos, conference Clearway President like speaker to Energy, now Chris today, and would hand over the your Inc. I CEO of ahead. go Please

Chris Sotos

Thank you and morning. good

Clearway taking me time Let you fourth for thank to call. first join Energy Inc.'s quarter the

Akil morning our of and for CEO Director of Energy the be presentation. available Group, our Q&A Joining Craig is Investor President of Cornelius, me Marsh, this will portion and Clearway Relations; sponsor. Craig

forward-looking this contain which Before to that I today's on we that are like note assumptions will begin, based quickly be to discussion reasonable date. statements, we believe as of

Actual results the in risk Please the as today's our in safe SEC filings. may harbor differ materially. factors well presentation, as review

we will to addition, and refer non-GAAP GAAP In both financial measures.

measures comparable most financial today's to For refer to our and GAAP please information directly presentation. non-GAAP the measures, reconciliations regarding

Page million, $XXX million, quarter Turning winter and CAFD company of short due December's of The [wind to to full-year $XXX full-year weak fourth guidance [ph] predominantly generated of X. resource] its storms.

in generation expectations. in CAFD to its of XXXX below CAFD investments. a million of Our new well nearly the forma the closing commitment XXX long-term through transaction, Clearway increase and pro executed thermal was

of reduced capacity currently natural annualized us the for it El keeping the of XXXX, increased share X% we schedule through in on have objectives dividend range of ahead to $X.XXX by the growth announced XXXX. dividend Clearway In with fleet and week, addition, Last of target basis, our to repairs the upper per or on achieve $X.XXXX facility. the contracting the in is volatility Segundo's gas Clearway terms of

XXXX. with contracted, nearly of stages stands of stages contracts of the strong on continues development in as are late pipeline, of nearly gigawatts gigawatts and which in end gigawatts awarded also projects growth guidance at XXX. sponsor] X [Clearway [ph] negotiation reaffirming over of its of We XXXX development revenue our this of now XX X CAFD late

is our will sponsor of work incentives over of to four and us also augment year Clearway that over assets accretive our Furthermore, gigawatt extend life enable X repower that by years. next aided last the accelerating potential repowering’s fleet investments enable with to passed the

previously that campaign, a acquisition of we repowering disclose and [what are to announced repowering has its terms Capistrano Cedro that Hill step allow] in PPA for the of pleased first part [ph] As recently amended in XXXX. in project the

to for of with dropdown of part Arica As this Clearway deployment invest targeted continued Energy and commitment of now Group. committed the the Victory capital a currently and growth half over million Projects Pass Clearway trajectory, offered has in $XXX from

As remaining through the are XXX end X% $X.XX from of CAFD our pro a to we thermal line to million rate outlook EPS million continued accretive growth deployment to This of the assets provides share. per forma to range in to of result, strong visibility with of proceeds XXX CAFD sight X% deployment our increasing XXXX. achieve achieve for upper

beyond fully during the In the and continue $X.XX so execute continues summary, well-positioned its grow plans, growth CAFD deploy Clearway thermal that's to proceeds XXXX share. of per to to

details X to on more Turning to Slide provide financial results.

at million [Clearway] of CAFD EBITDA full-year, or Fourth of $X.XXX Distribution $XXX the Available Cash adjusted For for results quarter is negative $X EBITDA million and reporting adjusted and [ph] came million. million of CAFD. $XXX of

lower as due as the was a primarily the trend quarter, This headwind approximate an renewable impact was to at million which quarter, in the In the from observed industry weak well was wind resource, performance. wind assets. $XX resource certain weaker throughout negative most solar notable

expectations, relative was a the internal of PXX measure Clearway’s to production The index quarter. for wind represents production in fleet, XX% which actual

in asset, whose at recording Alta XX% Wind measurement For the came Complex, for regions including resource, production wind the all largest weak quarter. wind portfolio our the index with wind

and but the was [Elliott driver impact in second that winter A ERCOT financial related, storm quarter had of renewable the in [ph]. PGM] significant performance less

when experienced was of at impacts elevated we assets set which and were modest During adverse financial prices low on a those from facilities. settlements generation wind our financial select

the to Lastly, we the two segment, period fourth bundles El toll during to quarter, pricing tube the Clearway at was of disclosed of the in quarter previously the put accelerate Conventional a results bundles in in made has low the relatively of the replace decision accelerating at the [whilst] ahead [ph] Segundo schedule replacement facility. replacement reported actively impacted

us power dispatching well to from as to be in allow generate the services, reliability second going of well XXXX. additional to the Will merchant market to grid revenue as positioned provide half critical

liquidity Turning Segundo call. in impact. held sheet for the level reserve last service subsidiary, the on El have In connection XX million repayment, with corporate debt the near-term of restricted the was XXX in million for level cash quarter, previously activity to project repaid attributed clearly, December project we reducing indicated at thereby payments debt our we outstanding balance approximately as for the

Turning These a average Arica half our in with represent to Pass a the COD asset of a CAFD capital want $XX an X% of which asset should XXXX. reach Solar. investments commitment and We of on Slide commitment to provide Victory of five-year second [indiscernible] dropdown CAFD X. million overview million yielding latest $XXX

leading valued. [indiscernible], portfolio and in of This contracts growing XX this be by diverse resources a will case system a in our operating in entities add serving four critical project complementary and of will set which battery storage is in that to investment expands load providing they're a with year resources base, backed greatly California where

years on desirable very average set quality basis high contract diversified us. strength. Overall, contracts XX of the will projects they a a in home have a for duration great of and have with operating we approximately customers a market weighted They serve commercial operational where profile be will exhibit a

sale last [ph] from we Victory Pass an roughly [beyond] excess Arica thermal as the The on first in important toward the deploying our of a at are million Capistrano. step investments and third discussed $XXX capital call

with provide visibility this to continue deployment months. to regarding concrete further Group the expect capital in Clearway coming to We working

previously dropdowns discussed from progress turn provides our X Please update the X. to sponsor. Page an Page on of

the on the with forma and see Victory left pro Arica, outlook share. increase can you of Clearway the Pass to side page, commitment CAFD $X.XX can on now As a

in second As commercial XXXX. half VP of achieved the operation Erica

The by remaining approximately currently that million. we offer dropdowns are million working of anticipated Clearway next with additional then $XXX on followed of dropdown $XXX commitment represent be Group to the

next provide acquisitions with sight noted Clearway to line as CAFD $X.XX fully When set today's generate shareholders also sponsor our offering increased and market dropdown to returns can total share. clear Importantly backdrop. so of in of continue our we for a these yields, and opportunities here, is will of operational, these accretive per

redeployment progress In to of we further summary, make than the the continue providing thermal less months visibility proceeds access divestiture closed. after into investors the XX with in

execution Turning terms of adding into growth to have to achieved our to Page around continue our excellent share high-end around looking year-over-year capital of access goal. drop project's Thermal and contract Clearway. assets focus we growth. capacity target, to down per certainty and the year continued performance at forward X. on of DPS And acquisitions provide CAFD and deploying the execution length for line XXX% our Segundo and XXXX, XXXX We El sight in visibility was an of $X.XX to at greater

upper in X% the [indiscernible]. growth XXXX at given XXXX, the is Despite capital improvements growth of some deployed achieve operational in the objective well-positioned long-term range DPS platform and to the X% of in our to accretive XXXX volatility

site per In in [XXX] embedded addition, CAFD [ph] by line of demonstrate our year-end, share. beyond additional of want growth to we that currently

While our to the the accretive underwriting deployment is provide that of proceeds growth proceeds four formal our our beyond not history, in platform's our intent continue core the the next the growth on to opportunities standards. hands of with sit investors meet source will regarding deployment Clearway thermal our visibility years. longest the for

are its summary, growth, Energy, strong to to due its on focus ensure objectives success. to In long-term confidence in Inc. Clearway part support meet building sponsor prudent continues Clearway as

Operator, lines the questions. please open for

Operator

question with Co. [Operator line Kaye Oppenheimer the Noah comes of Our first you. Thank & from Instructions]

open. Your line is now

Noah Kaye

Hey, good taking questions. morning. Thanks the for

the of [adequacy] much contracts those Arica, to projects And you or merchant and contribution the resource Pass from projects? tolling expectations? Victory give just [ph] CAFD us can can on detail also contributes you length how other storage First, the

Chris Sotos

years. for Sure. The basically contracts XX last

them after of year start COD. a Some

So, weighted is average XX. the like we that's around say what

much In is XX% XX%, how contracted? About contracted terms of overall capacity. is in of terms

bit contracted, a of because timeframe. is But us, little for cash, the of kind vast tough is that's terms cash that asset In fungible. of the over majority

Noah Kaye

environment development little the the a timing some love to can That talk And are of get factors changes deck, for of driving some then of are view expected mentioned to COD a would is the few those bit timing we considerations? very There your Thank XXXX? factors XXXX, at about good hear. CEG the in you. in but maybe that and

Chris Sotos

in, start I'll and as through of obviously he's pitch Sure. working of all kind Craig, then that.

one X, projects was recently had been was of we’ve think one out delayed. while. the I That a closed view, the from part that Daggett which our for basically

So, policy several delays I in, development those the that there we of out when of think seeing changes saw definitely Craig, governmental in, But we're some of on pipeline? kind closing progress was before around kind that.

Craig Cornelius

for Thanks the question, Noah. sure. Yes,

have suppliers we assets with First that organization driving our our construction the quite today. performance the in for we're stage, that happy are and

is today expectations. see As or all are that to offered baseline outperforming those we on assets year, – equipment activity actually in for committed those flowing all freely, completion at construction assets track materials, this the construction been noted have are when is

we're assets stage XXXX and and happy completion we're early there doing how with XXXX. So, in in construction quite for

core [ph] assets XXXX making exit that first we look half [CWEN] chain dropdown we the again will as fundings support that the pointed to about XXXX, we stage out of underpin late we in for XXXX. feel As supply the good to offers

wind We us with have for are who today's perform for that and suppliers environment. demonstrated batteries the supplies, ability panel the supplies those turbine in to required have supplies,

is we're out in especially an stages resources think that As to from we for XXXX, who under XXXX, I how balancing have serving XXXX, are and what you're want investment of the YieldCo to contractual as to we load entities look mandate the demand alluding interest support. align structures procuring desirable to best later that

The terms seasonality projects ultimately, credit underpin equipment, domestic that elections. availability content And tax in financing for and then of schedule. supplements, treasury qualify guidance and that structures may optimal could equipment ideally construction of what's credit clarification on tax

the are things we balance. those that so, And

sort accelerate us We those capitalize to we year the of predominantly. projects beyond any that our to want that project into repository vintages we have YieldCo, given is the the that so the inventory into assets assets to create want for try to in also ability prudently doesn't which

would X.XX that with support construction to per you bit X.X for able growth back based share. guidance that into in the gigawatts be terms of out balance. may the more into And the being bring XXXX volume versus volume months' So, what what able mid-decade slide. of outlook we have it's that we see happy next how those or support of are on few the annualized out that worth things a treasury conceivable pipeline We're the we worth beyond our sorts in represented to more

Noah Kaye

That's sure a Thanks. queue. questions, Craig. I'll but great in follow-up for I'm back have others will summary, jump And now

Craig Cornelius

you. Thank

Operator

you. Thank

with comes next Our line Dumoulin-Smith America. Bank of question the from of Julien

Your is open. line now

Julien Dumoulin-Smith

where It's gas Julien also can expectations spread on thoughts the time here. running any large procurement, altogether, gas put you've extent, given given the in outlook, to offtake that etcetera? just just the the opportunity. you've with west, then with just the late the And of I guys. assets? spark a you're place Super we little but Thanks want talk bit a I we mitigated Hey, out and about Just of here? assume volatility about quick, for outage the from that, clarify of nature seen to some events are

And if other throw can, in I just then I'll question. the subsequently,

to to think to do about formally pivoting that Just doing how and rolling the forward higher-end? XXXX, more ultimately you that

Chris Sotos

it. Got

three break or them I apart hopefully questions So, correctly.

I'll think kind spread. your of question I terms spark second in maybe first address of

there good where different little Xs] important think the pricing we're gas of the and still California volatility kind is where gas, obviously Citygate’s most [the I bit that in obviously a is natural seeing at we're area that's gas in [ph]. seeing on delivered

the think the through year. the different I again, of in the aware, of toward very kind So, year assets their merchant as tolls heavily curve roll-off of once weighted timeframe. at end times during July you're We're that Julien, different

estimates has our most But which growth that's for the gas needed that really the underpinned their been critical. at of California going one our see b, still like. us, load saw of robust, vehicles for of to characteristics electrification good kind load well ability I here maintained So, natural assets terms with see in pockets of near-term overall, fundamental [duct we don't [ph], are as the a, think of the which definitely the that were, curve] Citygate; overall price, we in away of fast terms sort in the start and very and and

think we have to $X the long-term, So, the in good. in we’re energy that estimates XXXX our margin longer-term we still fundamental underpinnings feel $X.XX also and pretty of

bit X a To I your first years prepared not think incident. happened question I significant Segundo what my as about make happen to on a remarks, little want kind of but again, we outages, without sure quarter talked the third in we had does in with El that

unplanned were as that So, replacing quick whenever bundles, we're outage the the can. we two the have the we which outage, chance, as issue the created

in once good end to majority second hopefully, by quickly machine can't the promise should to prices December of as of but vast of of when do we summertime to anything, a than and completed continue then, are we're toll kind bit opportunity that. as but lower have So, the the obviously expect them ahead the took by, replace shape And them the in possible little be again, quarter. schedule we and

give in I well-positioned years November. goes. We'll very growth of XXXX, February your auctions in not. But kind be think the calls sits. But see by I'm could that XXXX. maybe capacity We tell ends some previous won't around is summer. as that have I procurement that that until here what the combined there, we're on may [indiscernible] that may win. where repowering’s the to math and tied to Julien, us where show us out, dropdowns discussed in where further I with show We looking third awarded. to I that able participate To up. at math and think may in confident get We We'll But over think question we’ll

Julien Dumoulin-Smith

to you Got crystallized number, do more about use your when [X% range it. And changing then X%] or range upper think words, a get related a range about etcetera [ph] bit to start that, when to to to just your specific you rather period hand and in the narrower you opportunities already related What up. through you've acquisitions away given in about Again, terms or you. what a Group lined overall? you've what a maybe hand lot have in further from to maybe have then that got certain that of already Clearway little

Chris Sotos

Sure.

So, [ph]. couple of unpack] Julien, [to as questions a usual, there

part one what think, looking to is kind of kind we prefer I is, of do grow into XXXX.

XXXX point, be your of the through our about talked growth to So, to show we've upper range XXXX. Right? to is kind demonstrable in able goal and some

start to X, We there. it and be able to of want from kind grow at

think about I talked we duration visibility dividend more years, typically, the investors in over well the absolute as and versus of As I in number. an expansion value

simplistic. X% X% to growth be hey, would XXXX be XXXX if show you in and X% growth So, versus me, you told to in I in able rather XXXX

that's for I longer continue better visibility longer as and profile think a can tenors. growth show in to overall that I for us

around, in other active. To those a previous talked around] kind we on of engaged a of the of auctions do that market. We different calls, think [right these lot [ph], question We're assets. variety view at your of about a pricing look I've we're I as opportunities, pretty M&A on have assets. second

on takes part of The shake a successes a work. and of bit for a really of had to requires lot trying assets tough we've the of of variety counterparties, so, loose [indiscernible] that better is lack a out the to And reaching additional term bilateral a bilateral of side. lot quite

of push to those bit as short to where if of little success is but on bilateral Storm, other and view our Mountain continue And can pursuing be the we Capistrano, XXXX going a pricing. in with M&A auctions, we So, we're something terms here appropriate to demonstrated we've Utah. tend in half we're we of see

Julien Dumoulin-Smith

much. so guys. luck, Well, it. All Thank right. Got good it. Awesome. you Appreciate

Chris Sotos

Thank you.

Operator

Our [Operator you. of Storozynski line Seaport with Angie Research Instructions] from comes next the Thank Partners. question

is Your open. now line

Angie Storozynski

morning. Good

during I So, farms of maybe Any issues you was some your Good I related to issues of in performance assets missed that. operational morning. Texas? mentioned December. and wind wondering just these

Chris Sotos

The We said believe was kind XX of can resource. terms you modest majority issue CAFD. of that deck of it's Page in vast a wind there I see Yes. of has, and overall the kind

up an Just the we wind ended with exceptionally resource poor during quarter.

So, it's gives it's [ph] in wind an December. October resource, operational now] just issue, and [and more unfortunate especially

Angie Storozynski

strength hedge the exposure, prices the gas at it's [indiscernible], fully those assets, hard peaking the Citygate, secondly, basically hedge and differences, sort I [spot And profitability, regional in I of the Okay. And you to kind any with merchant are appreciate spreads are so PG&E but and CCGT of did especially the I natural then of you your spreads] so spark but mean, changes on – you side? the [ph]? for swings

Chris Sotos

simple off. energy merchant question, hedge and toll your answer To know going open not they're to [ph] also on To because them point, [peakers] we've is, we tended your to once are the it. rolls

but as a already does run know, that well. bit as Just energy. probably you [as so the out we hedge the [ph], didn't peakers] capability To quite your has to question,

XXXX. fully think is I however fourth through XXXX the XXXX, capacity quarter in hedged

So, year. it was on still for very partial estimate we're about feel our energy, but a given open good we

Angie Storozynski

opportunities, your owning would if mean assets but or know Okay. mentioned, then the peer States you strategic consider review, looking of of United don't various you're outside And for I outside you the comment, lastly, can announced at you M&A I even example Americas? a

Chris Sotos

X% in of wouldn't no. to that, outcome. the or in that's any substantively we then you portfolio outside was no. Canada question Americas, said, maybe simply that mix like a portfolio was or if But to answer binary there the something and to that, want the United change have United States, outside Yes. I a the at goals Outside say, our your If is, hey, is, it's do someone look of of XX% U.S. States

Angie Storozynski

Okay. Thank you.

Operator

you. Thank

next Our with of UBS. Grippin question William comes the from line

Your line is open. now

William Grippin

Great. Thanks very much.

sight mix in I Just one of to of other you sort that speak maybe of any how one funding about, the you're excess for thinking could – line post acquisitions, allocating XXX quick million kind you've sale that guess got now me. million? to proceeds, XXX thermal for just

Chris Sotos

Sure.

cash. always The part from comes retained first

once So, call to payout again, our XX% guidance. of it in our ratios XX% terms

million guidance, within we would $XX utilization. of be million little be the the of it levered are leverage use under would probably Then And lastly, we would then that rounding. obviously have a to second. about $XXX on first [ph] So, [X you That's we any second, cash bit, equity. X.X] but have currently, capacity

I of XXXX them. were we some bed, show were equity we have kind those have non-recourse cash. and finance XXXX, assets, but on that up we pockets of some would think move markets probably of some to have on fall levered don't course the If of again, in assets really the debt of non-recourse the business, use a to capabilities out normal excess first of is

leverage of kind to debt count. And X.Xx, then to issuance. corporate EBITDA Second within is a Xx about equity lastly,

William Grippin

Got very it. much. Thanks

Operator

Thank over Chris I'd the remarks. currently hand like call you. this to back I'm for Sotos at And time. closing questions further no showing to

Chris Sotos

joining the day a know Thank everyone for you. Once again, for call. it's busy everyone. thanks I

So, for your support in discussing forward you appreciate Thank growth and really to the our time. XXXX. look continue

Operator

you for participating. call. conference concludes today's Thank This

You may disconnect. now

Clearway Energy (CWEN.A) 23 Feb 232022 Q4 Earnings call transcript