Press release·05/01/2025 10:11:37

Financial Performance Overview

Clearway Energy, Inc. is a publicly-traded company that invests in clean energy infrastructure across North America. The company owns a diverse portfolio of approximately 11.8 GW of generation capacity, including around 9 GW of wind, solar and battery energy storage systems, as well as 2.8 GW of flexible natural gas-fired power plants.

For the first quarter of 2025, Clearway Energy reported total operating revenues of $298 million, up from $263 million in the same period in 2024. This increase was driven by higher generation and sales from the company’s renewable energy assets, as well as the acquisition of new solar and battery storage facilities. However, revenues from the company’s flexible natural gas generation segment declined due to lower generation at some of those facilities.

The company’s operating costs and expenses increased to $298 million in Q1 2025, up from $292 million in the prior year period. This was primarily due to higher operations and maintenance costs, as well as increased depreciation and amortization. As a result, Clearway Energy reported breakeven operating income in Q1 2025, compared to an operating loss of $29 million in the same quarter of 2024.

On the bottom line, Clearway Energy reported a net loss of $104 million in the first quarter of 2025, compared to a net loss of $46 million in the prior year period. This larger net loss was driven by a $57 million increase in derivative interest expense, reflecting changes in the fair value of the company’s interest rate hedging contracts due to rising interest rates. The company also had a $64 million increase in net loss attributable to noncontrolling interests, primarily related to tax equity financing arrangements.

Liquidity and Capital Resources

As of March 31, 2025, Clearway Energy had total liquidity of $1.325 billion, comprised of $297 million in cash and cash equivalents, $414 million in restricted cash, and $614 million in available borrowing capacity under its revolving credit facility. This liquidity position provides the company with ample financial flexibility to fund its operations, capital expenditures, and growth initiatives.

During the first quarter, the company used $46 million in net cash for investing activities, a significant decrease from $203 million in the prior year period. This reduction was primarily due to lower cash paid for acquisitions, as the company completed several “drop down” transactions with its sponsor, Clearway Energy Group, in the current period.

In terms of financing activities, Clearway Energy used $71 million in net cash during Q1 2025, compared to $34 million provided in the same quarter of 2024. This change was driven by a $163 million decrease in net contributions from noncontrolling interests, as well as a $6 million increase in dividends paid to common shareholders and distributions to Clearway Energy Group.

Looking ahead, the company expects its liquidity position and cash flows from operations to be sufficient to meet its financial commitments, fund capital expenditures, service debt, and pay dividends to shareholders. Clearway Energy continues to actively manage its capital structure and evaluate opportunities to optimize its financing arrangements.

Acquisitions and Investments

During the first quarter of 2025, Clearway Energy completed several strategic acquisitions and investments to grow its renewable energy portfolio:

• On April 29, 2025, the company acquired the 160 MW Tuolumne wind facility from an investment-grade utility for $207 million. This acquisition was financed with $163 million in new non-recourse debt, as well as existing liquidity.

• Also on April 29, the company acquired the 105 MW Luna Valley solar project and the 54 MW Daggett 1 battery storage facility from its sponsor, Clearway Energy Group, for a total estimated investment of $143 million. These “drop down” transactions were funded using the company’s existing liquidity.

• On March 20, 2025, Clearway Energy acquired a 50% interest in the 192 MW Rosamond South I solar project from Clearway Energy Group for an initial $4 million, with an additional $17 million expected at completion. This acquisition was also financed with the company’s available cash.

These transactions demonstrate Clearway Energy’s strategy of growing its clean energy portfolio through a combination of third-party acquisitions and drop down transactions with its sponsor. The company believes its operational expertise and access to Clearway Energy Group’s development pipeline provide a competitive advantage in identifying and executing on attractive investment opportunities.

Operational Performance

Clearway Energy’s operational performance during the first quarter of 2025 was strong, with increases in generation and sales across its renewable energy assets:

• Solar generation increased by 20.4% to 1,738 GWh, driven by new solar projects coming online and favorable weather conditions.
• Wind generation rose by 8.9% to 2,743 GWh, reflecting the contribution from the recently acquired Tuolumne wind facility.
• The company’s flexible natural gas generation segment saw a 62.9% decline in output to 65 GWh, due to lower dispatch at the Walnut Creek, Marsh Landing, and El Segundo facilities.

Overall, Clearway Energy’s weighted-average capacity factor for its solar assets was 25.7% in Q1 2025, up from 21.0% in the prior year period. The wind fleet achieved a weighted-average capacity factor of 33.9%, compared to 31.0% in Q1 2024. These improvements in operational performance contributed to the increase in the company’s renewable energy revenues.

Looking ahead, Clearway Energy remains focused on maximizing the availability and efficiency of its existing assets, while also selectively adding new renewable energy projects to its portfolio through acquisitions and development. The company’s diversified mix of wind, solar, and flexible natural gas generation provides a balanced approach to delivering reliable, sustainable power to its customers.

Regulatory and Environmental Matters

Clearway Energy operates in a highly regulated industry, and the company’s financial performance can be impacted by changes in environmental laws and regulations. During the first quarter of 2025, the company noted the following key regulatory developments:

• In March 2024, the SEC adopted new rules requiring climate-related disclosures, including reporting of greenhouse gas emissions. However, the implementation of these rules has been delayed due to ongoing legal challenges.

• The company continues to monitor the potential impact of federal tax legislation enacted in 2022, which introduced a corporate minimum tax and other provisions related to clean energy development. Based on the company’s analysis, it does not expect these new tax rules to have a material impact on its financial results.

Clearway Energy remains committed to operating its facilities in compliance with all applicable environmental regulations. The company has implemented programs and procedures to monitor and control the environmental risks associated with its assets. While future changes in environmental laws could increase the company’s compliance costs, Clearway Energy believes its focus on sustainable energy sources positions it well to navigate an evolving regulatory landscape.

Outlook and Key Risks

Looking ahead, Clearway Energy remains optimistic about its future prospects, driven by the continued growth in demand for clean energy and the company’s strong competitive position in the market. The company’s diversified portfolio of contracted renewable and flexible generation assets is expected to provide stable, growing cash flows to support its dividend to shareholders.

However, the company does face several key risks that could impact its financial performance, including:

• Commodity price volatility, which can affect the revenues and profitability of its merchant generation assets
• Interest rate fluctuations, which can impact the cost of the company’s debt financing
• Counterparty credit risk, as the company relies on various offtake agreements and financing arrangements
• Regulatory and policy changes that could increase compliance costs or alter the economics of its projects

To mitigate these risks, Clearway Energy actively manages its commodity price exposure through hedging, utilizes interest rate swaps to fix its borrowing costs, and maintains a diversified portfolio of creditworthy counterparties. The company also closely monitors the regulatory environment and works to ensure its assets remain in compliance with all applicable laws and regulations.

Overall, Clearway Energy’s strong liquidity position, diversified asset base, and focus on sustainable energy sources position the company well to navigate the evolving energy landscape and continue delivering value to its shareholders.