Brookfield Renewable (BEP)
Global contracted renewables yieldco: 47.2 GW proportionate operating capacity, FY2025 CAFD of $1,264M at 90% payout, ~89% contracted LTA GWh, and ~$25–26B combined market cap.
Educational analysis for professional use. This profile is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Snapshot
The Contracted Yieldco Benchmark
Brookfield Renewable is the filed exception on contract disclosure: it reports a proportionate long-term average (LTA) generation split rather than a vague qualitative mix. Operating capacity was 47,203 MW at 31 December 2025 (8,496 MW hydro, 16,753 MW wind, 13,993 MW solar, 5,817 MW distributed and storage). On 2025 proportionate LTA GWh, 18,736 GWh was contracted against 2,371 GWh uncontracted on 21,107 GWh total (~89% / ~11%); management also describes the fleet as ~90% contracted with ~70% of revenues inflation-indexed. The CAFD (cash available for distribution) bridge is the teaching line: Normalised FFO $1,484M minus sustaining capex $98M minus wind/solar amortisation $122M equals $1,264M at 90% payout on $2,698M proportionate Adjusted EBITDA. Combined economic equity was roughly $25–26 billion in June 2026, counting BEP partnership units plus BEPC exchangeable shares; NYSE BEP float alone understates it.
Business Overview
BEP is a Bermuda limited partnership yieldco for Brookfield's hydro, wind, solar, and storage platform. Proportionate reporting matches how analysts bridge EBITDA to CAFD at the partnership level. The development pipeline exceeds 200 GW globally with ~84 GW advanced-stage (land, permit, or grid secured); that MW sits off the operating balance sheet until dropped in.
Proportionate net debt was $15,624 million at 31 December 2025. Net debt divided by proportionate Adjusted EBITDA is ~5.8× (derived). That sits in the house 5–7× normal band for leveraged contracted assets, above Vistra's 2.6× forward quote and below AES's ~9.5× stretched merchant-developer mix.
How the Economics Work
The yieldco CAFD guide uses Brookfield's bridge as the worked example: Normalised FFO minus sustaining capex minus amortisation equals CAFD. Payout at 90% sits inside the house 80–95% sustainable screen when growth capex is sponsor-funded at the holdco (the parent company that sits above the operating assets) rather than out of CAFD itself.
Contract profile drives the multiple premium the contracted premium guide teaches. ~89% contracted LTA GWh is the generation proxy because Brookfield does not file an EBITDA split between contracted and merchant, though the ~90% contracted commentary aligns. That contracted share is well above merchant-majority peers such as Vistra and NRG, neither of which files a comparable consolidated split.
The PPA vs merchant guide treats BEP's filed LTA split as the disclosure hierarchy exception. Most independent power producers lack that line. Brookfield has it, which is why it anchors the contracted side of the comp set.
Valuation Framework
Computed EV/EBITDA on FY2025 figures was ~14–15× (enterprise value of roughly $41.1B, from combined market cap ~$25.5B plus proportionate net debt $15.6B, divided by $2,698M proportionate Adjusted EBITDA), as of June 2026. That prices contracted cash flows rather than hub spark exposure. CAFD yield on combined equity is the income lens; CAFD divided by partnership units alone misstates economic exposure if BEPC shares are excluded.
Pipeline optionality (>200 GW total, ~84 GW advanced) is valued off sponsor development, separate from BEP balance sheet MW. The house $1.0–1.5M/MW mark for contracted US wind/solar is a teaching default until transaction comps replace it.
Key Risks
Merchant 11% of LTA GWh. Uncontracted volume moves with hub prices in hydro, wind, and solar markets globally.
Leverage at ~5.8×. Normal for contracted yieldcos in the 5–7× band, but leaves less headroom than VST/NRG if EBITDA slips or refinancing widens.
Unit structure. Combined cap includes BEPC; screening BEP units alone understates economic equity and overstates leverage per dollar of CAFD.
EBITDA split not filed. Use generation proxy (~89% / ~11%) or ~90% contracted commentary, not an invented EBITDA-contracted percentage.
What the Screening Shows
Against the Renewables and IPPs Sector Primer thresholds:
- Capacity: 47.2 GW operating (proportionate). Hydro/wind/solar mix; global footprint.
- Contract profile: ~89% / ~11% on 2025 proportionate LTA GWh (filed). ~90% contracted fleet (commentary).
- CAFD: $1,264M; 90% payout. Inside 80–95% sustainable band.
- Leverage: ~5.8× net debt ÷ prop. Adj. EBITDA (derived). Normal contracted band.
- Pipeline: >200 GW total; ~84 GW advanced (sponsor/group; only part sits on BEP's balance sheet).
When an independent power producer will not file LTA splits, screen revenue mix and contract life instead; Brookfield is the issuer that does. NRG and Vistra skip a comparable contracted share because their books run merchant-heavy, not because the CAFD arithmetic differs between them.
Renewables & IPPs Sector Primer
A multi-period DCF splits contracted PPA years from the merchant tail, pricing each off realised power price and term, then checks the value against spark spread and CAFD.
The Excel model is the primer's two archetype builds live across 10 sheets: a multi-period DCF with a contracted-or-merchant toggle, step-down discount rates for the PPA term and the merchant tail, a spark-spread build for the merchant case and a CAFD-and-payout bridge for the yieldco. Change the realised PPA price, the contracted discount rate or the merchant spread and the value per share moves; the premium and payout sheets update alongside it. It also splits the contracted premium into the part the pipeline explains and the part contract quality explains, splits the PV between contracted years and the merchant tail, and reads EV per kW on both archetypes.