Brookfield Renewable Has Over 85,000 MW in Its Development Pipeline and Just Added Another 1,700 MW of Long-Term Contracts. Here's the Case for Owning It.

Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) is one of the world's largest publicly traded renewable power platforms. It had 47,300 megawatts (MW) of generation capacity across 25 countries at the end of the first quarter. Its portfolio spans hydro, wind, utility-scale solar, distributed generation, and energy storage.

The leading renewable energy stock expects to grow much larger in the coming years. It ended the first quarter with 85,146 MW of projects in its advanced-stage pipeline and just signed another 1,700 MW of contracts supporting that backlog. Here's the case for owning the clean power juggernaut.

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Advancing the backlog

Brookfield Renewable has acquired several development platforms over the years to enhance its expertise, scale, and project backlog. This strategy has enabled Brookfield to ramp up its development activities. It delivered a record 8,000 MW of new capacity last year, up 20% from 2024. The company is on track to reach its targeted annual development run rate of more than 10,000 MW in deliveries by 2027.

Two things need to happen for Brookfield to deliver that amount of new capacity each year. It needs a pipeline of attractive renewable energy projects and secure customers to support them. As of the end of the first quarter, Brookfield had over 85,000 MW of projects in its advanced pipeline. It also made progress in securing customers for these projects by signing power purchase agreements (PPAs) for around 1,700 MW of capacity in the quarter.

The company also took a step to enhance its backlog during the quarter by agreeing to acquire Boralex. The Canadian renewable power platform currently has over 4,000 MW of operating and under construction wind, solar, hydro, and battery storage assets and another 8,000 MW in its development pipeline.

A major growth driver

Brookfield's backlog is a meaningful growth catalyst. The company estimates that completing its entire advanced stage pipeline would add over $1 billion in annual funds from operations (FFO). That's a huge number, considering that the company generated around $1.3 billion in FFO last year. Ramping up to the company's 10,000 MW annual target would support annual FFO growth of 4% to 6% per share.

That's only one of its growth catalysts. Brookfield's PPAs typically link power rates to inflation. As a result, they should deliver annual FFO per share growth of 2% to 3%. Meanwhile, Brookfield expects its existing power portfolio to deliver another 2% to 4% of incremental FFO per share growth each year from margin-enhancing activities, such as signing higher-rate PPAs as legacy agreements expire. Additionally, Brookfield expects accretive acquisitions, such as the Boralex deal, to further enhance its growth rate. Add it all up, and Brookfield expects to deliver more than 10% annual FFO per share growth through at least 2031. That should support annual dividend growth of 5% to 9% on its more than 4%-yielding payout.

A must-own energy stock

Brookfield has an enormous advanced-stage development pipeline that's growing as it secures more projects and contracts. It helps support the company's robust growth profile. Add in its high-yielding dividend, and Brookfield can generate powerful total returns in the coming years, making it a great energy stock to own.

Matt DiLallo has positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.