Brookfield, the investment management giant, has successfully concluded its acquisition of Duke Energy's unregulated commercial renewables business. The deal, initially announced in June, comes at a substantial cost of approximately $2.8 billion, solidifying Brookfield's presence as one of the world's largest publicly traded pure renewable power companies.
Duke Energy's commercial renewables business encompassed around 3.4 GW of operational wind, solar, and battery storage capacity, with an additional 6.1 GW in its development pipeline. Wind energy constitutes roughly half of the 5.9 GW of capacity either operational or under construction, while solar projects dominate the development pipeline.
Notably, the transaction excludes Duke Energy's lease off the coast of the Carolinas, which the company intends to continue developing through its regulated business. Duke Energy's CEO and chair, Lynn Good, remarked that the sale marks a pivotal step in their transformation into a fully regulated utility. The strategic move allows Duke Energy to focus on its regulated energy business, emphasizing reliability and stability for its customers.
Despite the sale of its unregulated renewables business, Duke Energy remains committed to renewable energy development, with plans to invest significantly over the next decade. Their goal is to incorporate 30 GW of regulated renewable energy into their system by 2035.
In the regulated segment, market regulators prescribe fixed rates of return for utilities' investments in renewable energy projects, and when necessary, permit adjustments in customer energy bills to ensure anticipated profits. Conversely, in the unregulated realm, utilities engage in competition with other project developers on a merchant basis. This shift reflects the evolving landscape of the energy sector, where renewables are gaining prominence in both regulated and unregulated domains.