Business Overview - As of December 31, 2023, the company has approximately 6,000 net MW of installed wind, solar, and energy storage projects, and a total of approximately 8,500 net MW of assets, including 2,500 net MW of natural gas-fired generation facilities[21]. - The Company reported total operating revenues of $1,314 million for the year ended December 31, 2023, compared to $1,190 million in 2022, reflecting an increase of approximately 10.4%[36]. - The Company's total assets increased to $14,701 million in 2023 from $12,312 million in 2022, indicating growth in asset base[36]. - Total rated capacity of Clearway Energy, Inc. is 10,583 MW, with a net capacity of 8,451 MW as of December 31, 2023[195]. - The company has a total of 4,157 MW of wind capacity, with a net capacity of 3,658 MW[195]. - The total utility scale solar capacity is 3,432 MW, with a net capacity of 1,989 MW[193]. - Distributed solar projects account for 332 MW, all of which are 100% solar[193]. Financial Performance - The net income for the Company in 2023 was a loss of $14 million, a significant decrease from a net income of $1,060 million in 2022, which included a $1.29 billion gain from the sale of the Thermal Business[36]. - The Company intends to maintain a disciplined financial analysis and a balanced capital structure to increase its quarterly dividend over time[28]. - The Company intends to distribute a significant amount of Cash Available for Distribution (CAFD) each quarter, relying primarily on external financing sources for acquisitions and growth capital expenditures[76]. - The Company’s ability to maintain or increase dividends may be impacted by the issuance of additional equity securities and increased interest expenses from debt financing[76]. - The Company is committed to diversity and inclusion, providing unconscious bias training and focusing on three areas: Our People, Our Brand, Customers and Community, and Our Purchasing[56][59]. - The company declared a quarterly dividend of $0.4033 per share on February 14, 2024, payable on March 15, 2024[202]. - The company expects to continue paying comparable cash dividends in the foreseeable future based on current circumstances[203]. Growth Strategy - The company plans to grow its business through acquisitions of contracted operating assets, with a focus on cash accretive and tax-advantaged acquisitions[27]. - The Company’s growth strategy is contingent on public policy mechanisms supporting renewable energy, which are critical for the viability of its renewable assets[78]. - The Company is focused on North America for its investments, leveraging regional knowledge of power markets to maximize performance[27]. - The Company has committed investments in projects with Clearway Energy Group (CEG), including Cedar Creek (160 MW wind, ID, COD 1H24), Cedro Hill Repowering (160 MW wind, TX, COD 2H24), and Texas Solar Nova 2 (200 MW solar, TX, COD 1H24)[27]. - The Company aims to provide stable and growing dividend income through its diversified and primarily contracted portfolio[212]. Regulatory Environment - The Company is subject to various federal and state regulations, which may impact its operations and financial performance, particularly with potential revisions in 2024[48]. - The Company’s renewable energy projects are supported by various policy incentives, including PTCs and ITCs, which are crucial for maintaining project viability and attractiveness[38]. - The Company is subject to various federal, state, and local environmental and health regulations, which could lead to significant liabilities and costs exceeding property values[131]. - The EPA has implemented strict new methane emissions regulations, impacting the Company's conventional assets and potentially increasing operational costs[132]. - Legislative changes regarding carbon emissions could require the Company to install new equipment or purchase emission allowances, affecting profitability[133]. - Government incentives for renewable power generation are critical for the Company's growth strategy, and any changes could adversely affect project viability[141]. Risks and Challenges - The Company faces risks related to its ability to grow and make acquisitions, with limited cash on hand and competition from larger companies for acquisition opportunities[70][77]. - The Company is exposed to various risks, including operational risks from electric generation facilities and reliance on third-party service providers[70]. - The Company faces intense competition in the power generation industry, which has contributed to a reduction in electricity prices in certain markets[82]. - The company’s ability to replace expiring offtake agreements is challenged by increasing competition, potentially affecting profitability[82]. - The company’s financial condition may be adversely affected if power purchasers fail to fulfill their contractual obligations[81]. - The Company faces significant risks in the operation of electric generation facilities, including equipment breakdowns and unplanned outages, which could adversely affect financial performance and cash flows[94]. - The Company is exposed to risks from interest rate swaps and energy-related financial instruments, which could affect reported financial results if market conditions change[104]. - The Company is subject to cyber-based security risks that could lead to significant revenue losses and increased operational costs[111]. - The Company may face increased regulatory compliance costs due to potential cyberattacks, which could lead to significant penalties[113]. Corporate Governance - CEG, the Company's controlling stockholder, holds 54.91% of the combined voting power, significantly influencing corporate governance and strategic decisions[119]. - The CEG Master Services Agreement provides essential services to the Company, and any failure in these services could materially affect operations and financial results[121]. - The Company’s Board of Directors reviews emerging ESG matters and strategies, ensuring compliance with ESG disclosure requirements[63]. - The Company has established oversight mechanisms for cybersecurity risks, with the Board of Directors receiving regular updates on the cybersecurity landscape and compliance status[182]. Acquisitions and Investments - On December 28, 2023, the Company acquired Texas Solar Nova 1, a 252 MW solar project, for cash consideration of $23 million, with an additional $109 million contributed by a cash equity investor[214]. - On October 31, 2023, the Company acquired Class A membership interests in two solar projects in California for initial cash consideration of $46 million, with an expected additional payment of $182 million upon substantial completion[214]. - The Company expects to invest approximately $17 million in Texas Solar Nova 2, a 200 MW solar project, subject to certain milestones being met[214]. - The Company acquired Daggett 2, a 182 MW solar project paired with 131 MW of energy storage, for cash consideration of $13 million[214]. - BlackRock is expected to acquire 100% of the business and assets of GIM, the investment manager of the GIP funds, with the transaction anticipated to close in Q3 2024[211].
Clearway Energy(CWEN_A) - 2023 Q4 - Annual Report