Clearway Energy Q3 2026 Earnings Call Transcript

Clearway Energy (NYSE:CWEN) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Clearway Energy reported solid financial performance with a third-quarter adjusted EBITDA of $435 million and CAFD of $173 million, maintaining its 2026 CAFD guidance range.

The company initiated a 2027 CAFD guidance of $520 to $590 million and reaffirmed its commitment to a 7-8% CAGR in CAFD per share through 2031.

Clearway Energy’s investment pipeline expanded to 6.4 GW, with 75% of capital deployment needed for 2031 targets already commercialized.

The company’s capital plan for 2026-2030 involves $4.1 billion in investments, with a focus on renewable and digital infrastructure projects.

Clearway Energy’s strategic initiatives include significant contracts in flexible generation and progress in battery storage, enhancing the predictability of its earnings base.

Management highlighted the company’s risk-mitigated growth pipeline, policy-resilient strategies, and the potential long-term advantage from tax credit planning.

Operational highlights include successful contract extensions and robust repowering projects, contributing to the company’s long-term growth goals.

Full Transcript

OPERATOR

Good day, and thank you for standing by. Welcome to the Clearway Energy third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today’s conference is being recorded. After the speaker’s presentation, there will be a question-and-answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

I would now like to hand the conference over to your speaker today, Akil Marsh, Head of Investor Relations.

Akil Marsh (Head of Investor Relations)

Thank you for taking the time to join Clearway Energy’s third quarter call. With me today are Craig Cornelius, the company’s President and CEO, and Steven Ryder, the company’s CFO. In addition, we have other members of the management team in the room to answer your questions if needed. Before we begin, I’d like to quickly note that today’s discussion will contain forward-looking statements, which are based on assumptions that we believe to be reasonable. As of this date, actual results may differ materially. Please review the safe harbor in today’s presentation as well as the risk factors in our SEC filings. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today’s presentation.

In particular, please note that we may refer to both offered and committed transactions in today’s oral presentation and also may discuss such transactions during the question-and-answer portion of today’s conference. Please refer to the safe harbor in today’s presentation for a description of the categories of potential transactions and related risk contingencies and uncertainties. With that, I’ll hand it over to Craig.

Craig Cornelius (Chief Executive Officer)

Thanks, Akhil, and good afternoon, everyone. Clearway continues to execute well, and this quarter we took several steps that strengthen our long-term financial outlook. We are reiterating our 2026 CAFD guidance range with results tracking in line with revised expectations. We are initiating 2027 CAFD guidance of 520 to 590 million dollars, aligned with our prior CAFD per share growth target, a direct continuation of the trajectory we are committed to, driven by committed growth investments and the ongoing value of our fleet enhancement program.

Beyond 2027, we remain confident in achieving the top end or better of our 2030 target, which has been further solidified since last quarter with additional committed investments enabled by our enterprise’s powerful growth engine. We are now rolling forward our CAFD per share target to 2031 with a range of $3.20 to $3.40, representing a 7 to 8% plus compounded annual growth from our 2025 baseline. We also see potential to deliver further upside to the top end of that goal range through investments in digital infrastructure energy complexes, which have continued to advance with the first major complex targeting completion in time to add to our 2031 CAFD per share goals.

Underpinning all of this is a maturing pipeline that has grown to approximately 6.4 gigawatts of identified investment opportunities, up fully 27% quarter over quarter, with roughly 75% of the capital deployment needed to meet the 2031 target already commercialized. That level of granular forward visibility into growth is unique in the landscape of listed infrastructure investment opportunities, driven by a best-in-class, risk-mitigated sponsor pipeline and a conservative capital allocation framework.

Turning to slide 6, our total corporate capital plan for 2026 through 2030 now stands at approximately $4.1 billion, with investment cadence in 2027 through 2030 running at roughly double the 2026 level. Across the 2026 to 2029 completion vintages, we continue to demonstrate excellent visibility into just how de-risked our growth outlook is. This purpose-built investment plan spans over 10 states, with executed and awarded revenue contracts that have either cleared state-level regulatory review or do not require those approvals, giving us high confidence in the durability of our growth objectives.

And with the roll-forward of our long-term target to 2031, this slide now includes planned investment in 2030 to meet our 2031 financial objectives, where over 50% of the investments needed to meet that target are already in view, well ahead of schedule for what would be common for a vintage this far out in the future. This diverse, redundant, multi-pathway pipeline gives us high conviction in our ability to deliver on our industry-leading growth visibility.

Turning to slide 7, I want to spend a moment on an underappreciated dimension of our growth story—not just how much we are growing but how the quality and predictability of our earnings base is improving as we grow. By 2031, our battery storage fleet, primarily earning capacity-based revenue streams, is expected to represent approximately 17% of fleet CAFD. Furthermore, when combined with our large solar portfolio, inter-annual resource variability will become a smaller factor in our overall earnings profile.

Our 2031 fleet is also expected to be meaningfully more diversified geographically and by offtaker. This is a growth story that rivals those of premium utilities, with even more diversification in end markets and applicable policy, with the combination of projects we plan to add to our fleet developed, selected, and designed to create an increasingly predictable, diversified earnings base—all very much by design. Turning to slide 8, the 7 to 8% plus compounded annual growth rate we target through 2031 is by no means the end of our platform’s growth trajectory in 2031 and beyond. The breadth and competitive positioning of our pipeline spans 19 states that need new generation and capacity. Applying our trademark policy-aware development strengths, we have built one of the most policy-resilient growth pipelines in the power industry.

Our footprint is diversified to accommodate varying conditions in any given state, and our pipeline has been structured to allow a substantial share of our projects, including renewable projects, to claim tax credits and deliver value to customers and owners well into the 2030s. Our tax credit safe harbor program also provides a differentiated advantage in planning tax credit qualified projects for completion well beyond 2030. We have established the ability to claim tax credits for specific projects placed in service after 2030, enabled either through the 10-year window for projects developed on federal lands or through documentation of continuous development and construction efforts. We are proud of the deliberate tax planning and procurement work that laid the groundwork for this advantage over two years ago and look forward to seeing it deliver a unique edge for Clearway and its customers well into the next decade.

Our battery storage pipeline extends that runway even further. Over 10 gigawatts are eligible for tax credits if construction begins by the end of 2033 and projects are placed in service by the end of 2037. Taken together, these attributes are expected to make over 15 gigawatts of Clearway Group’s pipeline qualified to claim tax credits when placed in service in 2031 and beyond, enhancing the value proposition for customers and reinforcing our confidence in the long-term growth ahead of us.

Turning to slide 9, we see merit in the emerging dialogue in Washington about the future of conjoined tax and supply chain policy that applies to our industry, and we look forward to engaging in that dialogue with an eye towards affordability and sound national policy balance. But even as that dialogue commences, we here at Clearway have always been preparing for a world where tax credits recede as a part of the renewable value proposition. To that end, our development pipeline supports 2 gigawatts or more of annual completions in the 2030s, with co-located digital infrastructure representing meaningful throughput optionality and cost competitiveness for those resources without reliance on incentives. Post-2030 development in our pipeline is concentrated in supply-constrained locations where renewables and battery storage are expected to be the least-cost, best-fit resource for affordable and reliable power.

Our development strength in these markets and the time we have spent advancing land and interconnection for these projects together give us a structural advantage that is difficult to replicate. And in these markets, as you can see in the analysis on this slide, the renewable and battery projects in our pipeline will remain competitive against other forms of generation on an unsubsidized basis. Turning to slide 10, for all these reasons, we believe the longevity of our growth prospects into the 2030s is not fully reflected in our stock’s valuation. To make that long-run growth algorithm more readily valued, we are providing today some simple building blocks for investors to envision our company’s growth model in the decade beyond 2031.

If in the years beyond 2031 we invest in 2 gigawatts or more of annual dropdowns at approximately 800 million to $1.2 billion in annual corporate capital at CAFD yields consistent with our recently sustained range of 10 to 11%, the combination of increasing retained cash flow and only accretive equity issuance will put this platform in a tremendous position to grow CAFD per share at a robust pace from our 2025 baseline. Given our enterprise’s best-in-class long-term development program outlined on the prior slides, our team is exceptionally well positioned to provide Clearway Energy with the opportunity to invest at this dropdown cadence or higher well into the 2030s. Should we face periods of capital market dislocation along the way, our platform will still be well positioned to grow beyond 2031 at a pace faster than what is currently priced into our stock, reinforced by a declining payout ratio that underpins sustainable, predictable long-term growth.

As we bring our payout ratio below 70%, we can conservatively support over 1 gigawatt of annual dropdowns in the 2030s, drawing primarily on retained cash flows and corporate debt within our leverage target, generating sustainable per-share growth with minimal equity issuance required. The way that this aspect of our capital allocation framework can enable a very strong foundation for long-term growth is something we hope will be increasingly appreciated by the broader investment community as it envisions the very bright long-term prospects of our company.

Turning to slide 12, across our fleet enhancements program, our team has had a tremendous year demonstrating and crystallizing the long-term value of our existing fleet. In our flexible generation segment, we are fulfilling our vision for harmonized Western market reliability, now successfully serving new utility customers across the West in need of capacity resources. This quarter we signed a tolling contract with an IOU customer for our remaining 2027 capacity with an eight-year tenure through 2034, ramping to 500 megawatts by 2029, and we are also now completing an additional 274 megawatt contract with a new customer for a 10-year tenor from 2028 through 2037. Pricing across these contracts is fair and strong, allowing the fleet to contribute CAFD well into the future in line with its 2027 CAFD per share contribution and supportive of the top end of our 2031 goals.

At the same time, our repowering program continues to advance on track, with most identified projects in full-scale construction. We expect to deploy 90% or more of the $650 million in repowering investment that we have planned through 2027 at attractive yields. With development of these projects now complete and construction well underway, we have begun to cast our vision ahead to a next wave, with over 500 megawatts of additional repowering opportunities now in development for 2030 and beyond.

Turning to slide 13, from all these successes, the total identified Clearway Energy investment opportunities and sponsor-enabled growth through 2029 have risen to approximately $2.3 billion across more than 6 gigawatts. We have now committed to the Honeycomb Phase II and Swan Solar projects and received a new offer for the Heartland Solar plus storage project at an attractive 10.5% CAFD yield in the 2029 vintage. Capacity required to meet the top end of our goals is now approximately 70% commercialized or identified, driven by substantial solar plus storage capacity in Arizona that Clearway commercialized this year, creating an opportunity for approximately $625 million of potential Clearway Energy investment. Having already commercialized what will constitute a robust annual investment campaign unto itself in Clearway’s Red Chimney complex, we have purposefully cultivated further projects in development for the 2029 completion vintage, providing the kind of redundant upside that is a hallmark of how we run this plan.

Turning to slide 14, our 2030 completion vintage now has over 6 gigawatts of late-stage core and digital infrastructure projects in development, well over two times what is needed to achieve the top end of our 2031 CAFD per share growth goal, giving us meaningful opportunity to achieve it. Approximately 1.5 gigawatts of PPAs are already signed or awarded for projects targeting this completion year, representing roughly $450 million of potential Clearway Energy investment already commercialized, with projects in Arizona, Montana, and Kansas.

The vintage is well diversified across technology markets for the balance of our capacity and development, including our core mainstay markets in the Western United States and PJM. Equally, if not more exciting, Clearway’s first co-located digital infrastructure projects continue to make progress across markets, with our Wilcox Energy Complex in Wyoming advancing en route to bringing first generating capacity online in 2029 and completing its first 3.4 gigawatts of generating resources by year-end 2030.

We are proud of the way we are demonstrating the potential for renewable-powered, gigawatt-class data centers that are very supportive of their local communities through this project, having secured key federal permits for some of the hardest-to-permit resources at the complex, ordered the project’s long-lead equipment including gas generation and high-voltage infrastructure, and signed an LOI with a top-tier hyperscaler. While we can and will achieve our 2031 target through our core growth pathways, the future commercialization of complexes like Wilcox represents a compelling pathway for Clearway Energy to reach outcomes even better than the top end of our newly established 2031 target—one that could lead to annual compounded growth through 2031 materially above 8%. As you can see, the durability, capability, and resiliency of our enterprise provide multiple redundant pathways to meet our new long-term growth objectives, and I couldn’t be more confident in our outlook.

With that, I’ll turn the call over to Steve, who will walk through our financial results in more detail.

Steven Ryder (Chief Financial Officer)

Thanks, Craig. Before I get into the financial results, I want to take a moment to acknowledge Sarah Rubenstein, whose leadership as Clearway’s previous CFO has been integral to building the strong financial foundation Clearway stands on today. I’m excited to see her bring that same expertise to her new role in leading our Transformation Office. I’m honored to serve our public investors in this expanded CFO role and I look forward to executing on the business objectives we’ve outlined in today’s presentation.

Turning to our third quarter results, Clearway delivered solid financial performance with adjusted EBITDA of 435 million and CAFD of 173 million, bringing year-to-date adjusted EBITDA to 1.1 billion and year-to-date CAFD to 410 million. In our battery and flexible generation fleets, results reflected strong availability and operational execution throughout the quarter. In our solar fleet, results similarly exhibited strong operational performance and a 99% plant availability.

After incorporating final settlements and operational performance reporting for the quarter in our wind fleet, resource came in line with our updated second-half expectations. Taken together, third quarter execution was solid and we remain well positioned to meet the 2026 guidance range of $430 to $470 million that we revised in last quarter’s earnings call. Turning to Slide 17, we are today establishing a 2027 CAFD guidance range of $520 to $590 million aligned with our prior CAFD per share growth target and consistent with the growth trajectory Craig outlined earlier. The growth from our revised 2026 guidance range to our 2027 guidance range is driven by a few factors: improved wind resource aligned with long-term expectations, contributions from our previously disclosed committed growth investments, and fleet enhancements across our operational fleet.

The key assumptions underpinning our guidance range are consistent with our historic budgeting practices. The midpoint of $555 million of CAFD, which translates to $2.70 CAFD per share, reflects budgeted median renewable production expectations, and the range captures a potential distribution of outcomes on resource, fleet performance, energy pricing, and the timing of growth investments. Our 2027 DPS target of approximately $1.98 is consistent with our prior commitments.

As we have stated previously, we remain focused on bringing long-term payout ratio below 70%, enabling an even more sustainable and resilient long-term growth story, while DPS growth after 2027 is expected to be competitive with mid-cap utilities. Turning to slide 18, on this slide we walk through how our identified and future growth investments build the bridge to our newly established 2031 target of $3.20 to $3.40 CAFD per share representing a 7% to 8% compound annual growth rate from our 2025 baseline. On identified growth, we now have approximately $3 billion of committed and identified investments for 2026 through 2030 completion vintages, providing excellent visibility into meeting our 2031 target.

On the financing front, we will raise capital to both fund growth and refinance our existing corporate debt maturities. We have pre-hedged benchmark rates for $1.3 billion of notional value for refinancing existing bonds maturing in 2028 and for issuance of incremental bonds to sustain Clearway Energy’s growth. For additional financings, the funding assumptions embedded within our 2031 target reflect today’s rate environment and have not factored in potential upside from declining rates.

Turning to slide 19, we lay out our capital allocation framework which underpins the funding pathway to meet our 2031 target while maintaining the balance sheet discipline our investors expect. On retained cash flow, we expect to generate $800 million or more between 2026 and 2030, underpinned by long-term contracted cash flows and our commitment to a payout ratio below 70% by 2030. This prudent approach ensures that retained cash flow becomes an increasingly important part of our funding mix over time, further de-risking our growth funding outlook.

On corporate debt, we expect to raise $2 billion or more over that same time frame, of which $600 million was raised in 2026. As always, we remain steadfastly committed to our double B rating, which translates to a corporate leverage ratio of approximately four to four and a half times. On external equity, our equity program through 2026 to 2029 remains unchanged at approximately $500 million to $1 billion, with $50 million raised in 2026. For 2030, we expect approximately $300 million to fund investments planned in that vintage.

Equity funding remains a key building block to meet and potentially exceed our long-term financial targets. As we have consistently stated, we will issue equity only when demonstrably accretive, via methods that limit price disturbance and in amounts consistent with what is observed among listed utilities. Our framework positions us to meet our targets through 2031 and we will remain steadfast in maintaining our investment and capital allocation discipline.

With that, I’ll turn the call back over to Craig for closing remarks.

Craig Cornelius (Chief Executive Officer)

Thanks, Steve. To recap, we continued to make strong progress creating long-term value for Clearway this quarter. We established 2027 financial guidance fully aligned with our prior commitments. We rolled forward our CAFD per share growth target, establishing a new 2031 target representing a 7% to 8% compound annual growth rate from our 2025 baseline. With continued commitment to bring our payout ratio below 70% beyond 2031, we are advancing visibility into CAFD per share growth opportunity for Clearway Energy well into the 2030s through the continued maturation of our large, traditional development pipeline and the commercialization of gigawatt-scale complexes to serve responsibly sited data centers.

This platform is in a tremendous position to deliver durable, compounding per-share value for our shareholders. In all this, we hope you see that we here at Clearway are among the absolute best in our industry in executing insightful long-term resource development, intentional capital planning and stewardship, and value-oriented business craftsmanship. With that, operator, we are ready to take questions.

OPERATOR

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment for questions, and our first question comes from Christopher Souther with Truist. You may proceed.

Christopher Souther (Analyst at Truist Securities)

Hey guys, thanks for taking my questions and for all the info on the update here for the 2027 CAFD guide. Curious if you could separate out the contribution expected from the various repowerings and Honeycomb 2 given the CODs. And then also, what CAFD contribution are you currently baking based on those new FlexGen contracts? Thanks.

Craig Cornelius (Chief Executive Officer)

Yeah, thanks again for the question. Appreciate the engagement substantially. Most of the CAFD contribution from the repowering campaign will start to be observed at its full contribution in the 2028 year, although there is a partial contribution from that investment in that calendar year. For Honeycomb Phase One, that 2027 CAFD level certainly reflects full-year operations for those resources. There’s only a modest amount of CAFD that would be contributed from Honeycomb Phase Two in that year.

So the majority of the difference between 2026 and 2027 is reflected in the higher run-rate CAFD contribution from our FlexGen fleet relative to 2026, normalization of meteorological conditions to something closer to a typical meteorological year—although we’ve accounted for persistent El Niño conditions in the range as well as the midpoint of the range. And so it’s really sort of that expansion of contribution from the FlexGen fleet and the normalization of resource, along with partial-year contribution from the repowering investments, that drive that increase from 2026 to 2027.

Steve, would you like to add to that at all?

Steven Ryder (Chief Financial Officer)

No, I think you covered it great.

Christopher Souther (Analyst at Truist Securities)

Yeah, all that makes a lot of sense. Can you talk through the anticipated progress we should be watching for on the digital infrastructure side over the next couple quarters? And is there an anticipated timing you think that Wyoming would be a committed project that would be included in the guidance?

Craig Cornelius (Chief Executive Officer)

You know, I mean, I think one of the things that we’re so proud of in the business we’ve crafted and the plan that’s in front of you is how well this business is going to be set to grow consistent with its business model out through the next five years, simply building more of the same types of projects that we’ve built for the last decade and that make up our fleet today. But given what we’re participating in in the formation of a wholly new type of infrastructure and the bright prospects that that creates for further growth for Clearway Energy in the future, we do want to start to provide a window into that future investment opportunity, which, as we’ve noted, is something that really constitutes an upside.

Ordinarily we designate something as an identified investment opportunity with the prospective capital contribution from an asset some two years prior to the expected funding, and we’ve identified this amongst a few other digital infrastructure assets as potentially being first capitalized by Clearway Energy in 2030. So that would tell me that maybe in the sort of next 12 to 18 months, the tremendous progress that we’re making in our first few projects could start to translate into a more precisely identified investment opportunity that could be viewed as a more certain proposition.

But as you can see in the disclosure we’ve provided, we’ve made tremendous progress. The work that we’ve done with Wilcox is, we think, without parallel in the industry in proving out what a renewables-driven digital infrastructure complex can look like. What we’ve fashioned so far in that project is not easily replicated between the permits that we’ve secured, the commercial relationship that we are fashioning with the customer, the transmission infrastructure there, the over $600 million in long-lead equipment that’s been reserved, water, land, and interconnection.

And what’s also noted in our appendix is also further progress on other assets, to include those like our West Memphis project, which are similarly differentiated. So we are optimistic that each of these will eventually turn into a more precisely defined investment opportunity that creates opportunity for Clearway Energy to grow at the top end of the range we’ve articulated in the long run, or even higher to the extent that its investment capacity allows for it and the market welcomes it.

OPERATOR

Thank you. Our next question comes from Justin Clare with Roth Capital Partners. You may proceed.

Justin Clare (Analyst at Roth Capital Partners)

Hey, good afternoon. Thanks for the time here. Wanted to just start out on your flexible generation. So it looks like you meaningfully extended the contract tenor here and just wanted to better understand what’s driving the willingness of your customers to lock in capacity for, you know, eight to ten years. Is that a reflection of customer demand for longer-term certainty? And then just if you could share how much additional capacity that you have remains available for contracting through 2031 at this point?

Craig Cornelius (Chief Executive Officer)

Yeah, yeah, we’re very proud of the work that we’ve done, which is both conscientious of ratepayer value proposition and conscientious value stewardship for our owners. There’s been a tremendous amount of engagement on market design and regulations across the West, in California and adjacent markets that set us up to be able to execute on contracts like these, coupled with patience and the approach that we took to the market. And when you think simply about the cost of constructing new gas resources in the West in relation to the type of average price points where existing modern and efficient gas resources have been contracted for delivery periods in the 2027 timeframe and kind of the low teens per kilowatt-month, there is a big gap between the cost for ratepayers in contracting with a newly constructed gas resource and an existing modern one that can deliver capacity that’s accredited capacity in California or in adjacent markets that are integrated with it.

So when a load serving entity is looking at the certainty that that resource exists already and the substantial gap in cost between a newly constructed resource and that one, it’s a very compelling proposition both in terms of risk and cost. And so that’s what’s allowed us to first do this with the first customer, which you’ve seen is constituting a really appreciable increase in contract tenor from something like three years on average to eight, and to 10 with the next customer we expect to contract with imminently. And to your question, in terms of how much more we have available, about 20% more of our total nameplate capacity is still available for contracting in the kind of 2028 through 2030 vintage.

And then we’ve got more room to be able to serve customers beyond 2030, accounting for about half of our fleet capacity. So we think the pricing we’ve landed at for these is pricing that, as we’ve noted, allows this fleet to contribute an amount of CAFD well into the next decade. That’s consistent with our 2027 earnings power. Our confidence in that is part of what’s allowed us to establish and increase the long-term range we’ve set for 2031 and 2030 respectively.

And we look forward to continuing to make that open capacity available to other customers who we expect will see a similar value proposition. Yeah, well, the first thing that I’d say is what you should see in the disclosures that we provided about growth for our core business is really how thoughtfully sited and composed our development pipeline is. We noted that the core project pipeline we’re advancing is being advanced in over 16 states across the country as places where we can build projects and provide Clearway Energy the opportunity to deploy capital to hit its long-term goals.

We’ve also noted, and I think this is visible for the 2030 completion vintage, that we’ve got some eight and a half gigawatts worth of projects that are in development across different stages or technology types relative to a need for about two and a half gigawatts worth of project completion for Clearway Energy at the top end of our 2031 targets. So pretty substantial redundancy and resiliency. You can also see that, geographically, the places where we’re developing are places where there’s still ongoing appreciable load growth with utility customers as well as commercial and industrial customers. And all told, we think that allows us to be probably one of the most redundant and risk-resilient businesses in the United States electricity sector with respect to permitting risk.

That having been said, for the project pipeline and investment campaign that we’ve outlined, that’s on page six of our earnings material that shows our investment commitment program and identified projects, the vast majority of all of those projects already have regulatory-approved contracts and are projects that are advanced or complete in permitting. So the targets we’ve set today are targets that are super resilient to the election result, and in fact I think the results that were achieved in various states are likely supportive of the types of assets that we’re developing.

With respect to data center infrastructure, our disclosures identify the places where we’re developing co-located data center complexes. And in the case of four of those five projects, they’re all located in states where the state electoral outcome didn’t exhibit the kinds of risks that I think you’re noting. And you know, one of the things that’s made our company successful over time when others have not been is really how sensitive and thoughtful we are about the policy environment that we operate in and the community environment that we serve.

So because those co-located infrastructure complexes are still upside when thinking about the goals we’ve articulated, you could think of those as highly risk-resilient for the reasons that I cited earlier. But you could look at these complexes as also very thoughtfully sited that likely exhibit different types of risk profiles than some of those that the industry has been most focused on in states like Ohio and Texas.

OPERATOR

Thank you. Our next question comes from Julian Demoulin Smith with Jefferies. You may proceed.

Anohea Elliott (Analyst at Jefferies)

Hi everyone, this is Anohea Elliott on for Julian. Thanks so much for taking my questions. So I guess just starting out in the digital infrastructure pipeline, going from 17 gigawatts to about 12, I guess. Can you just bridge the change in the digital infrastructure opportunity set? I guess, how much of that reflects Montana moving into a traditional grid-connected project versus projects being removed or weighted differently here?

Craig Cornelius (Chief Executive Officer)

Yeah, we’ve not reduced the total quantum of what we are advancing. I think what we noted in the appendix disclosure that you’re referencing is it’s just sort of a different weighting methodology more so than any absolute change. What you can see around some of the projects that we have in development is that the load-served amounts and the earliest load-served quantities are quite similar. One thing that we changed about the reporting is we moved our Montana complex to become a traditional grid-tied project, which is a fairly significant portion of the total gross gigawatt potential.

And that complex continues to exhibit all the same land control that could, in the long run, allow us to build that much in the way of generation within the state. What you probably also noted is that our gross pipeline from one quarter to the next grew from 32 gigawatts reported to 35.5, that the total late-stage projects that we are identifying grew from 6.4 to 8.9—and those are for our core projects and late-stage opportunities—and then, additionally, for investment opportunities in 2031 that grew from 2.3 to 2.7. So if anything, we’re accelerating. You see evidence of that in the idea that the identified opportunity set, which we’ve disclosed, grew from 4.9 to 6.4 gigawatts.

And within the area of digital infrastructure, what I think you see here today, and you’ll continue to see, is that a generalized opportunity is becoming more specific, it’s becoming more tangible and reflective of our kind of characteristic tempo for progressive identification of investment opportunity.

Anohea Elliott (Analyst at Jefferies)

Okay, great. Thanks so much. And then just in terms of the new corporate debt issuance that’s planned, the updated framework has more than $2 billion planning on being issued through 2030. I guess, how should we think about the cadence of that issuance, and then how much of that is going to be refinancing existing maturities versus funding incremental growth?

Craig Cornelius (Chief Executive Officer)

Sure, I’ll make a framing answer and then Steve, glad for you to pick up from it. One of the things that we’re proud of is how well we’ve prepared this capital plan to be resilient across market conditions, and in particular resilient in the near term to variations in credit market conditions and the cost of capital. And so I think you’ve heard from us and you’ve seen perhaps in the disclosures that we’ve already hedged out interest rate exposure both for refinancings and new issuances in the near term.

But with that, Steve, why don’t you go ahead and further elaborate on our thoughtfully planned debt issuance strategy.

Steven Ryder (Chief Financial Officer)

Sure, sure. Thanks for the question. Yeah, over 2028 through 2032, we have a little over $2 billion of debt—$2.1 billion of debt—that we plan to refinance. The costs for those refinancings, to the extent that they aren’t hedged—and we’ve already hedged $850 million of that existing debt—we are using today’s current rates for that. So we have built that into our long-term planning. We are then looking from 2026 through 2030 at an incremental $2 billion here, and of the incremental debt we have hedged $450 million of that. You may recall back in January of this year we were very successful in raising $600 million of debt at an attractive rate of 5.75%. We still see our trading metrics looking pretty well with regards to where our debt is trading today, and we don’t see any reason to see that change. And raising corporate debt, we plan to do that prudently.

We will continue to stay within the 4.0 to 4.5 times leverage ratio there, which would be consistent with the BB rating that our firm has enjoyed for many years.

OPERATOR

Thank you. And as a reminder to ask a question, please press Star one one on your telephone. Our next question comes from Nelson Ng with RBC Capital Markets. You may proceed.

Nelson Ng (Analyst at RBC Capital Markets)

Great, thanks. I just have one quick question. In terms of the CAFD yield dropdown that ranges from 10% to 11%, is that return somewhat benchmarked to, let’s say, the 10-year bond yield in any way? I’m just thinking, obviously the 10-year yield has moved up, but if it’s significantly above or below 5%, should we expect that CAFD yield for dropdowns to directionally move in the same way?

Craig Cornelius (Chief Executive Officer)

Yeah, great question. And I think those who’ve been able to watch our company over time have seen that we’ve continued to be adaptive participants in the electricity markets that we serve and planners of capital allocation for Clearway Energy in a fashion that assures that the capital that’s allocated from Clearway Energy to grow produces adequate accretion to allow for our goals to be met. And as you’re suggesting, over time there has been an approximate range of spread between CAFD yields on newly committed investments and the 10-year, or the spread of our corporate bonds to that 10-year.

So some years ago you’d seen CAFD yields of 8.5% or 9% thereabouts on dropdowns, and those grew over time to 10% to 11% as a reflection of the company continuing to organize projects so that new investments could be accretive in an elevated rate environment. We’d expected the rate environment to tighten—or I should say to widen—which is part of why we’d set that range some years ago in anticipation of an elevated cost of capital environment. And that same range that we’d articulated of 10% to 11% is what’s reflected in the long-term plan that we’ve articulated today.

And that growth goal of $3.20 to $3.40 in CAFD per share in 2031, along with a cost of financing both in terms of equity and debt issuance that reflects today’s environment with some cushion to it. I think there are a lot of data points that power markets are structurally supportive of new investment and need it. Electricity demand grew

Steven Ryder (Chief Financial Officer)

appreciably over the course of the last few years and is set to grow some 50% over the next two decades. And PPA pricing reflects that demand growth, with PPA pricing up at least 6% across various indices. So to the extent that higher yields are ultimately necessary to reach our goals in an escalating cost and rate environment, that market data suggests that those escalating yields can be accommodated in our enterprise business model. And should they be necessary to hit these goals, those are certainly things that we would take into account.

OPERATOR

Thank you. And as a reminder to ask a question, please press star 11 on your telephone. Our next question comes from Mike McNulty with Deutsche Bank. You may proceed.

Mike McNulty (Analyst at Deutsche Bank)

Hey, thanks for taking the question. I just have one question related to the prior. Actually with the announcement of Section 232 and the SEC inverter ban, I was just wondering if you see any impact to the dropdown yields and any market commentary that you can give. Thank you.

Craig Cornelius (Chief Executive Officer)

Yeah, thank you for the question. We always like to answer questions about policy turbulence because they give us a chance to demonstrate how effective we are in anticipating and structuring around it. So there’s nothing about either the Section 232 policy announcement or bulk power order or other executive orders that is disruptive to the projects that are identified in our plan today. There are some good reasons for that that are not necessarily broadly true for the whole industry, but are true for us.

You know, for the last decade, since the range of step-up transformer, SCADA or inverter options have broadened for our industry, we declined to procure equipment from companies that today would be designated foreign entities of concern because of our thought that at some point U.S. policymakers would understandably focus in on risk to the bulk power system and would want large mature generators like ourselves to concentrate our purchasing of intelligent devices with Western companies whose supply chain provenance and software and national security controls were all controls that they felt comfortable with.

So those changes in potential policy in terms of what can be installed in the U.S. grid, which continue to be subject to future guidance, wouldn’t be disruptive to the designs we’ve employed or the equipment that we’ve already procured. So we’re proud of that forward-looking insight and the risk that that’s eliminated for Clearway Energy Inc.’s investors. And with respect to Section 232, you know, I think over the course of the last five years you’ll see many instances where the solar industry saw cost disruption due to trade policy. And in general, what we’ve been able to do is anticipate that and procure equipment or structure power purchase agreements in anticipation of potential fluctuations in market price while keeping projects on track and on schedule. And that’s true in this instance for Clearway Group’s project pipeline as well.

I would add that one of the benefits for the investors in Clearway Energy Inc. is that the enterprise model that we have allows Clearway Group as a project sponsor to manage supply chain risk while fixing an expected investment yield and investment amount for Clearway Energy Inc., which we think is one of the virtues of the business model that we’ve crafted. So we think there are important conversations to have around each one of those policy measures.

We think that the implementation of Section 232 could be thoughtfully crafted, in particular to support the emerging class of U.S. cell and module manufacturers. We think it’s important for the implementation of the bulk power order to reflect a risk-based, practical approach. But as far as Clearway Energy Inc. is concerned, we’re quite proud of the way that we’ve insulated it from all those risks.

OPERATOR

Great. Thank you. Thank you. I would now like to turn the call back over to Craig Cornelius for any closing remarks.

Craig Cornelius (Chief Executive Officer)

Thank you everyone for joining us today and for your ongoing support of Clearway. We’re proud of the opportunity that our many strengths have come together to create for our investors and could not be more excited to deliver it. Operator, you may close the call.

OPERATOR

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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