Renewable power has become core infrastructure

The most important question in power today is no longer whether demand will grow, but whether supply can keep pace.

Global electricity demand is entering a period of sustained structural growth. AI and data centers are important contributors, but demand from industrial electrification, manufacturing, transportation, cooling and broader economic growth are all driving higher power demand. At the same time, geopolitical disruptions have heightened the importance of energy security, making reliable access to power a strategic priority and reinforcing the value of domestically produced power.

Meeting this demand will require more generation, alongside investment in transmission and storage infrastructure, to deliver power where and when it is needed. Limited transmission capacity and growing interconnection queues can delay new supply, making speed to market and certainty of delivery critical.

Renewable power is well positioned to meet a significant portion of this demand because it combines:

• cost competitiveness,
• modularity, 
• scalability, 
• speed of deployment, 
• limited fuel-price exposure and 
• greater energy security.

Solar and wind can often be developed more quickly than conventional generation projects, allowing new capacity to come online sooner. Their limited exposure to fuel-price volatility can provide greater long-term price certainty.

Cost remains an important part of this advantage. Over the past decade, the price of solar and wind generation has fallen so much that it has established renewable power as the lowest-cost source of new generation across much of the world. By 2024, more than 90% of newly commissioned renewable projects¹ generated electricity at a lower cost than the cheapest new fossil fuel-fired alternative.

In 2025, clean power met all global electricity demand growth for the first time (see figure 1). Solar accounted for about 75% of incremental expansion, while wind and solar together supplied almost all net new demand. 

From megawatts to integrated power solutions

Large power consumers need reliable power at competitive prices, in the right location and with certainty of delivery. Transmission constraints and interconnection delays are broadening the opportunity beyond energy addition alone. In constrained markets, securing a grid connection can be as important as developing new generation, since projects cannot deliver power until they can access the network. This increases the value of existing interconnections and development sites with secured grid access. Storage and the contracts that connect generation to customers are also becoming core parts of the power system.

As a result, utilities and businesses are contracting for integrated renewable and storage infrastructure rather than standalone generation. Hybrid power purchase agreements (PPAs), for example, can provide a more consistent supply profile while reducing exposure to volatile power prices.

The market is therefore shifting toward integrated power systems that combine generation, storage, grid access, development expertise and commercial arrangements—hybrid PPAs, tolling structures and contracts that allocate costs, revenues and risks between generators and customers. Recent contracting activity illustrates this shift, with two hybrid power purchase agreements totaling 920 MW signed across Australia and Canada. These arrangements show how combining generation and storage can match power supply with customer needs, and the same logic applies to hydro and batteries, as discussed below.

For investors, combining generation, storage and contracting can create value by better meeting customer needs while maintaining attractive revenue and risk profiles.

Hydro: scarce, dispatchable and increasingly valuable

Unlike intermittent wind and solar, hydro can provide clean, dispatchable power, grid stability and, in many cases, multiday storage. These attributes are becoming more valuable as grids absorb more variable generation and large customers seek clean, firm power.

But hydro is scarce. In mature markets such as the U.S., most economically attractive large-scale sites have already been developed, with new development generally limited to smaller projects, upgrades to existing facilities or large government-supported projects. With sufficient investment, hydro assets can be effectively perpetual, with much of their value residing in the underlying site, water rights, reservoir characteristics and grid connection.

Mature hydro assets can still create value through equipment upgrades and refurbishment, improved availability and efficiency, optimization of existing interconnections and selective co-location of batteries. Changes in U.S. tax policy can also improve the economics of qualifying refurbishment investments through access to production tax credits. Combining flexible hydro with storage and existing grid access can create an integrated power solution, helping deliver firm, dispatchable power to customers.

Hydro is also asset and geography specific. Climate change is an important underwriting consideration, but its effects are not uniformly negative: recent long-term studies across parts of Brookfield's portfolio indicated increases in expected generation of approximately 3–8% in some locations due to higher precipitation. Generation remains constrained by water availability and head pressure, reinforcing the importance of asset-specific underwriting.

Batteries: making renewable power more useful

As power systems become more reliant on variable generation, flexibility is becoming essential. Batteries can store low-cost electricity when supply is abundant and deliver it when demand is highest. They can also deploy faster than many new generation or grid infrastructure alternatives, making them one of the most immediate ways to address current power constraints.

Battery economics have improved rapidly as manufacturing scales and technology advances. Costs have declined by nearly 95% since 2010 and by more than 60% over the past two years, while deployment is accelerating (see figure 2). In 2025, roughly one quarter² of utility-scale solar projects commissioned globally were co-located with battery storage, reflecting a shift toward integrated power solutions. These trends are moving batteries from a niche technology toward a standard component of renewable power infrastructure.

Scale, scarcity and execution are becoming competitive advantages

Growing power demand does not automatically create investable projects. Securing grid access, navigating development constraints and delivering projects on time are becoming important sources of competitive advantage.

Renewable markets remain highly local, with permitting requirements, grid availability and market structures differing by geography. Established market positions and local expertise can therefore create barriers to entry, particularly when combined with the resources and operating experience of a scaled platform. Scale also provides an advantage in procurement. Global purchasing power, combined with local market expertise, can help secure equipment on attractive terms and support more reliable project delivery.

Large power consumers also need reliable electricity across multiple markets and technologies. Scaled platforms with the development and operating expertise to combine generation, storage and contracting are better positioned to meet these needs and turn growing demand into investable projects.

Investment discipline remains critical

The long-term opportunity in renewable power is significant, but attractive outcomes will depend on disciplined execution. The investment case is more than simply buying renewable assets. It is to identify assets and platforms with contracted revenues, high-quality counterparties and scarce or defensible market positions, and then create value by developing, operating and enhancing those assets and recycling capital as they mature.

The risks remain real. Grid congestion, interconnection delays, permitting constraints, supply-chain pressures and changing regulatory frameworks can affect development timelines and project economics, underscoring the need for rigorous underwriting, local expertise and scaled platforms with operating experience.

Wind and solar provide low-cost, scalable generation; hydro provides scarce, dispatchable and long-lived clean power; and batteries add flexibility and help match supply with demand. Grid access, contracting expertise and operating capabilities bring these assets together to meet customers' evolving power needs.

For infrastructure investors, the opportunity lies in identifying the assets and platforms that can convert growing power demand into durable value. As the market shifts from adding megawatts to delivering integrated power solutions, scale, scarcity and execution will determine where that value can be created.