Duke Energy has announced it will be selling its commercial renewables business to Brookfield Renewables, Brookfield Corporation’s clean energy company, for $2.8 billion.
North Carolina-based Duke Energy currently has 51,000 MW of renewable capacity within the territories of its regulated utility business, while its deregulated commercial renewables has 3,400 MW of utility-scale wind, solar, and battery storage across the United States which is being sold to Brookfield.
The company also has 2,500 MW under construction with 6,100 more in development.
The sale comes nine months after the company initiated the sales process in September 2022. The deal closes at a 30% discount, as in November executives said the portfolio’s valuation was $4 billion.
The sale also includes the net of joint venture partners ownership, operations, new project development, and current projects under construction. Primary operations will remain in Charlotte, N.C. and Duke Energy employees will remain in their roles and transition over to Brookfield Renewables in the interest of maintaining business continuity for its operations and customers.
Brookfield, one of the world’s largest owner-operator of renewable power assets, has more than 7,830 MW of generating capacity in 34 states in the U.S., meaning the deal will increase its capability by 50%.
“With this acquisition, we are adding a scale operating renewable platform with a full suite of in-house capabilities and a proven management team experienced in operations and development,” said Connor Teskey, CEO of Brookfield Renewable. “We are also adding to our pipeline of renewable development projects, solidifying our position as one of the largest renewable energy businesses in the U.S. with almost 90,000 megawatts of operating and development assets.”
Duke expects to net just over $1 billion for the deal, which will go towards paying down debt while strengthening its balance sheet. In the long-term, the company will be able to focus on its regulated businesses and invest in grid reliability as it aims to incorporate over 30,000 MW of regulated renewable energy by 2035 and reportedly phase out carbon emissions from electric generations by 2050.
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As one of the country’s largest renewable energy operators, Brookfield has the resources to support the continued growth and success of the Commercial Renewables’ portfolio,” said Lynn Good, Duke Energy chair, president and CEO. “This sale is an important step in our transition into a purely regulated company with significant grid and clean energy investment plans that will deliver benefits to our customers and stakeholders.”
This isn’t the only move the company has made to shed its deregulated businesses. It’s currently involved in a separate sale of its distributed energy business that it also expects to close by the end of 2023.
Duke Energy is not along among U.S. utilities divesting of renewables businesses in deregulated markets, where the reward potential is high but risk level also steep. New York’s Con Edison sold its renewables portfolio to RWE earlier this year, while American Electric Power is selling a renewables fleet.
