CWEN

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Transcript Summary

Clearway Energy, Inc. (CWEN) delivered a strong Q1 2026 update, reaffirming its near-term guidance while raising expectations for the end of the decade. The company now aims for the top end of its $2.90–$3.10 CAFD per share target for 2030, supported by a revised $3 billion corporate capital deployment plan through 2029. A central theme was the acceleration of co-located digital infrastructure opportunities. Clearway is positioning itself as a key provider for hyperscalers, with major complexes in Wyoming, Montana, and MISO regions involving renewables and firming natural gas. Operationally, solar and flexible generation performed well, though wind resources were below average, particularly at the Alta site. A turbine enhancement program with Vestas is underway to address these technical issues. Financially, the approval of a share class simplification was a highlight, intended to boost liquidity and simplify the equity funding of future growth. Management remains committed to a disciplined capital structure, maintaining a 4.0x–4.5x leverage ratio. By focusing on accretive growth and lowering its payout ratio, Clearway intends to sustain a 5% to 8% annual growth rate through 2031, with data center demand providing significant incremental upside.

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Clearway Energy, Inc.: Dividend Sustainability Masked by Debt-Fueled Liquidity and Complex Equity Revisions

Full Earnings Call Transcript — Q1 • 2026-05-07

Operator: Thank you for standing by. My name is Janice, and I'll be the operator assisting today. At this time, I would like to welcome everyone to the Clearway Energy, Inc. First Quarter 2026 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Akil Marsh. Please go ahead.
Akil Marsh: Thank you for taking the time to join Clearway Energy, Inc.'s First Quarter Call. With me today are Craig Cornelius, the company's President and CEO and Sarah Rubenstein, 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 offer 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 categories of potential transactions and related risks, contingencies and uncertainties. With that, I'll hand it off to Craig.
Craig Cornelius: Good evening, everyone. I'll begin on Slide 5, where we outline our business update. Clearway remains firmly on track to deliver best-in-class growth in the near and long term. We are reiterating our 2026 CAFD guidance and our 2027 CAFD per share target of $2.70 or better, which continues to be supported by execution across all our growth pathways. What has evolved meaningfully since our November update is the scale and visibility of growth investments we now see in the medium and long term. Based on work completed over the last several months, we now expect to deploy 20% more corporate capital between 2026 and 2029 relative to our prior outlook. This increase reflects successful commercialization outcomes and stronger execution across our enterprise. Power demand tied to co-located digital infrastructure continues to represent a growth opportunity that we're advancing deliberately. Progress includes new equipment purchases, a design and delivery partnership with our friends at Quanta and Blattner and ongoing engagement with hyperscaler customers across multiple complexes in our development program. While we remain disciplined in what we'll move forward on and when, these developments increase our confidence that digital infrastructure campuses will represent a sizable long-term growth opportunity that is additive to our existing robust outlook. In parallel, we've also strengthened our capital allocation framework during the quarter with the approval of the share class simplification proposal. Taking these factors together, we are now increasing our focus towards delivering the top end or better of the 2030 CAFD per share target range of $2.90 to $3.10 per share that we set just 6 months ago. Reflecting the potential growth investment visibility that we achieved in recent months. Additionally, the continued success heightens our confidence that we'll be able to set a growth target in 2031 later this year, that translates to the top end of our 5 to 8-plus percent long-term growth range in 2031. Turning to Slide 6. We fleet optimization remains 1 of our most capital-efficient growth pathways, and we continue to make meaningful progress on 2 fronts: revenue enhancements in our existing Texas wind fleet and our repowering program. Starting with our Texas fleet. During the quarter, our previously awarded PPA with a hyperscaler has now been executed, and we expect 2 additional awarded PPAs to be executed later this year. These contracts extend contracted tenors across 3 operating assets and significantly enhanced long-term revenue and cash flow visibility. Turning to Repowerings. Our program continues to move forward on schedule. From a capital perspective, we continue to expect to deploy approximately $600 million of corporate capital across the repowering program at 11% to 12% CAFD yields, while extending asset lives and improving the quality and durability of cash flows well into the next decade. Overall, these fleet enhancements further solidify the pathway to potentially exceed our 2030 financial objectives. Turning to Slide 7. During the quarter, we seamlessly closed the Cardinal acquisition formerly referred to as Deriva. We continue to expect a CAFD yield in excess of 12% on the transaction and the acquired assets are performing in line with expectations. Cardinal is highly complementary to Clearway's existing fleet, along with presenting clear avenues for upside value creation. Looking ahead, we continue to evaluate additional M&A opportunities with discipline. At a high level, our core requirements include near-term accretion and long-term CAFD yield of approximately 10.5% or better. A strong strategic fit with upside value creation potential and deal sizing that aligns with our broader capital allocation framework. Importantly, potential future M&A remains upside to our existing targets rather than a requirement to achieve them. Turning to Slide 8. For the 2026 and 2027 vintages, we are 100% commercialized on sponsor enabled growth projects with construction progressing as planned. In the 2028 COD vintage, we've made substantial progress as well with contracts signed or awarded for over 70% of the megawatts we plan to bring online putting us well placed to achieve the top end or better of our 2030 target from investments planned for 2028. Turning to Slide 9. We are also confident in the strength of our 2029 COD vintage as a key driver of our long-term growth outlook. Our development pipeline for that vintage is sizable and diverse. Underscoring both the scale of the opportunity and the depth of our execution capabilities. Within the 2029 pipeline, we have advanced priority projects that total over 4 gigawatts and include an approximately 2 gigawatts solar-plus-storage project in the late stages of development. Importantly, what our enterprise is developing in the 2029 COD vintage has meaningfully more capacity than is required to meet our 2030 financial objectives. This provides resiliency and optionality as we continue to progress commercialization allowing us to be selective and disciplined while preserving upside. Turning to Slide 10. Since November, we've materially increased our line of sight to investment opportunities in the near term. With total corporate capital deployment over the 2026 to 2029 period now expected to be $3 billion. The green portion of the chart represents committed and identified investments. While the darker blue shade represents future late-stage growth opportunities that we expect to identify on future earnings calls as commercialization progresses. This increasing visibility provides us with conviction that we can achieve the top end or better of our 2030 target. The capital plan and outlined on this slide excludes further upside from third-party M&A or co-located digital infrastructure investments that we may execute on from a position of strength. Turning to Slide 11. We have confidence not just in meeting our 2030 target, but in achieving the top end or better given the visible and abundant growth outlook discussed earlier and illustrated in this walk. Starting from our reaffirmed 2027 target, the investments already committed and identified across the 2027 through 2029 COD vintages provide a clear path to meeting our 2030 target. With future growth investments enabling us to get to the top end or better of the target. This presented walk incorporates conservative assumptions around corporate financing and our base portfolio consistent with our historical practice of underpromising and overdelivering in the way we set long-term objectives for the enterprise. In our Flexi generation fleet, we assume long-term market price outcomes grounded in a conservative set of assumptions around California's regulations and market design. If long-term pricing of capacity and energy attributes from those facilities, is consistent with historical equilibrium prices, that would lead to CAFD per share above the target range in 2030 and beyond. As always, future and uncommitted third-party acquisitions are not included in our long-term goals and the emerging opportunity set for colocated digital infrastructure investments would also present upside opportunity relative to these goals. Taken together, this robust outlook allows us to now aim for the top end or better of the 2030 CAFD per share target range of $2.90 to $3.10 that we set just 6 months ago. Turning to Slide 12. During the quarter, we also made tangible progress across several fronts in our business program in digital infrastructure assets. We are increasingly optimistic that our incumbency, our pre-existing development assets and natural advantages as a developer operator of vision critical power assets will position Clearway to be a mainstay provider of power and powered land to satisfy our country's needs in this domain. Our acceleration of work during the past quarter included progress across site development, commercialization, and delivery preparation that together sets the stage for construction of differentiated and large-scale co-located generation and powered land for data centers later in this decade. We completed equipment purchases for the first phase of generation at our complex in Wyoming and are targeting first load served as soon as 2028. We established a design and delivery partnership with our longtime friends at Quanta and Blattner, who are now advancing our work across 3 complexes in our pipeline. We signed PPAs with the data center development entity and entered the queue for a priority interconnection position at our complex in MISO -- and our preparation of our Montana complex is also now coming into view, with first generation targeted for 2030 or sooner, and 500 megawatts of PPAs now signed and awarded. Across all of the complexes we have in development, we are seeing active and constructive engagement from our country's largest hyperscalers, who see in Clearway, a partner they can trust to deliver powered land that they need at scale and with a generation mix that addresses their goals. As a reminder, the co-located digital infrastructure opportunity represents incremental upside to our goals. Illustratively, one complex alone could provide Clearway with a $1 billion or greater capital deployment opportunity weighted towards 2030 and beyond. As always, any upside investment would be aligned with our stringent underwriting criteria for near- and long-term value creation. Turning to Slide 13. Based on our strongly accelerating development activity in our historical core business, we see potential for at least $1 billion of corporate capital deployment in 2030, which, in turn, could allow for us to sustain the high end of 5% to 8% plus CAFD per share growth into 2031. Our sizable 4 gigawatts of 2030 vintage projects under development across our enterprise are strategically positioned, qualified for tax credits and represent volumes in excess of what's needed to achieve our financial objectives. On top of this, we have conviction that part of one or more of the co-located data center complexes will eventually be commercialized providing an upside investment opportunity. Taken together, the progress we are making across Clearway's multiple redundant growth pathways reinforces our confidence in the results that Clearway's best-in-class growth engine will deliver for years to come. With that, I'll turn the call over to Sarah, who will walk through our financial summary.
Sarah Rubenstein: Thanks, Craig. Turning to Slide 15. I'll cover our first quarter financial results and our reaffirmed outlook for 2026. For the first quarter, Clearway delivered adjusted EBITDA of $257 million and CAFD or free cash flow of $70 million. From an operating perspective, our solar and battery fleet had strong performance across the portfolio and delivered results in line with budgeted expectations. The same was true in our flexible generation segment, which delivered solid operational execution during the first quarter. In our Wind suite, resource was lower than budgeted expectations in certain regions due to lower wind resource and availability, with the most meaningful impact coming from Alta. The first 4 months of the year have seen meteorological conditions that have led to below-average resource levels for the wind industry across the Western U.S. compared to historical norms. Also evident in our first quarter results was the impact on availability from a turbine enhancement program that Vestas North America is executing at Alta 2, 3, 4 and 5. We initiated the program in 2025 in conjunction with establishing a performance-based contract mechanism with the goal of returning those units to their historical availability levels of 95% plus in the second half of 2026. Moving to the full year outlook, we are reaffirming our full year 2026 CASK guidance range of $470 million to $510 million as we continue to believe we are well positioned to meet our 2026 financial objectives based on growth commitments tracking on schedule and expected operational performance for the remainder of the year. As per our usual practice, the guidance range reflects the potential distribution of outcomes tied to operating performance, energy pricing and the timing of growth in addition to assuming P50 resource for the remainder of the year. As always, our P50 resource expectation within our guidance assumes normalized weather conditions, consistent with long-term historical averages. Turning to Slide 16. As disclosed last week, our share class simplification proposal was approved at our annual meeting, reflecting investors' clear preference for simplification and a more straightforward public structure. The simplification eliminates complexity by moving to 1 publicly traded security and positions us to broaden shareholder debt. Consistent with what's shown on the slide, we expect that 1 class of publicly traded shares will have higher average daily trading volumes and the larger public vote will make it a more attractive security for public investors. Lastly, the simplification allows for greater flexibility to support our capital funding strategy. To meet our long-term CAFD per share and payout ratio goals, the efficient deployment of accretive capital is a key part of our strategy. Our core strategy to support the funding of growth Clearway continues to include enhancing our position of strength over time by lowering our payout ratio to fund more growth with retained cash flows. While also utilizing corporate debt as a funding source. But as we noted in past quarters, the issuance of equity only when accretive will also be a funding tool to ensure we prudently meet our financial objectives. While the core reason for implementing the simplification proposal was to honor investor feedback and simplify our public structure, a larger public float with greater trading liquidity has the second order impact of putting the platform in an improved position to utilize equity to fund attractive growth while ensuring equity is issued without price disturbance. Overall, we view this simplification as value enhancing for shareholders, and supportive of our long-term financial objectives. With that, I'll turn the call back over to Craig.
Craig Cornelius: Thanks, Sarah. To recap, we entered 2026 with a clear set of objectives, which I'm pleased we're on track to achieve. We are on pace to deliver our 2027 CAFD per share target. And beyond 2027, we have increasing line of sight towards achieving the top end or better of our 2030 CAFD per share target. Equally important, we are building durability into that growth with our prudent funding strategy and long-term payout ratio objectives. Beyond 2030, our work is increasingly focused on extending the growth runway for our enterprise well into the next decade. Over the coming quarters and specifically as part of our third quarter earnings update, we plan to advance initiatives that will enable us to roll forward our explicit CAFD per share growth target into 2031. We targeting the high end of 5% to 8% annual growth from the midpoint of our 2030 target. This includes continued advancement of our traditional development pipeline as well as thoughtful commercialization of gigawatt scale energy complexes to serve data center demand, which will present upside to the goals that we set based on our planned progression of our historical core business. In summary, we believe Clearway is executing extremely well and is laying a foundation for durable long-term value creation. With that, operator, we are ready to take questions.
Operator: [Operator Instructions] Your first question comes from the line of Justin Clare of ROTH Capital Partners.
Justin Clare: And so I wanted to just start out on the digital infrastructure here. And wondering if you could just speak to the potential timing in which you think you could make the first investment in digital infrastructure. It looks like these projects are potentially moving a little bit faster than expected. The Wyoming data center could begin operating in 2028. So is there a possibility that Clearway could make an investment in that 2028 time frame? Or what do you think the most likely scenario is?
Craig Cornelius: Yes. The possibility does exist. I think we're in the fortunate position, Justin, of having just a broadening array of opportunities that are being advanced by the Clearway Group sponsor entity in historical core business as you saw where grid tide projects that serve both utilities and corporate or hyperscaler customers are maturing in our pipeline and in a position to enable SWN to deploy the amount of capital that we would plan to deploy to hit the top end of its targets in the medium and long term. So these digital infrastructure campuses put us in the position to augment a core business pipeline that's already in great health relative to the goals that we set for the CWEN entity. So what we will be doing over the course of the next few years is making a determination and any given vintage around what is optimal as a complementary additional fit for CWEN assessing its position in capital markets and determining what's really going to be most value accretive for the shareholders of Clearway Energy, Inc. In terms of investment tempo and fleet composition, but the acceleration of opportunity around those digital infrastructure campuses really just puts us in a fortunate position that we can think about accumulating a fleet of significant size and the time that each individual asset may find its way into Clearway Energy Inc. is ultimately going to be paced by what's most accretive to the public entity. So yes, it's possible that some of the first investments in generating technology that would go into those campuses could be available to seen as soon as the end of 2028. And it will be alongside other investment opportunities in the core business.
Justin Clare: That's really helpful. And then just following up, how should we think about the relative attractiveness based on what you're seeing today? in the digital infrastructure assets relative to traditional utility scale investments, would you anticipate CAFD yields to be similar? Or are there meaningful differences? And then are there any other factors that you're considering in terms of the relative attractiveness? One could be just the size of investment could be quite substantial, and there could be a benefit there. So maybe you can just help us understand that.
Craig Cornelius: I think it's still early for us to speak specifically to the individual structure that could be employed for deployment of capital by CWEN into infrastructure of this kind and it will vary from 1 complex to another and from 1 customer to another. But the way that we're generally thinking about it is that we are looking to fashion projects, which exhibit the same technical and commercial characteristics as those we routinely build for other grid tide settings. And when we present Clearway Energy Inc. With an opportunity to deploy capital into those complexes, we aim to present it with an opportunity to play that capital with a similar risk profile similar tenor, a similar CAFD yield, a similar long-term risk-adjusted return proposition. And they're very well may be additional infrastructure that is developed and transferred either to partner utility or to the hyperscaler technology company themselves. -- as part of 1 of these sizable complexes, but we most certainly aim the total scope of the complex to present ample opportunities for CWEN to deploy its capital with a risk profile and a return similar to what it sees from the grid-tied projects we prepare for it.
Operator: Your next question is coming from the line of Mark Jarvi of CIBC.
Mark Jarvi: Craig, you mentioned the word Tempo investment temple, I'm just clearly, you're not short of investment opportunities and ability to deploy capital. So when you think about the medium-term targets, you're tracking at or above the 8% level through 2030. Like what holds you back from trying to push that above the 8% and maybe closer to 10% on the upper end of the range? Is it funding that you just don't want to get ahead of yourself on? Is there anything else that you would say it would sort of temper expectations for you guys right now?
Craig Cornelius: Yes. Thanks for asking the question, Mark. I mean I think you know that let's put our company in the great standing that it enjoys is that we put 1 foot in front of the other. And make our growth happen through a progressive evolution and capital allocation framework and deployment of capital. And so when we think about the velocity of new investments in CAFD per share growth I would think, first and foremost, around the capital allocation framework we've set, which aims to maintain a prudent leverage ratio between 4x and 4.5x drive the payout ratio in the business down into the 70s as we approach the end of the decade. And to have the pace of growth matched with our public investors' appetite for that growth. So you're absolutely right that we want to be thoughtful about the pace that we present investment opportunities for CWEN so that the extent to which it accesses equity markets is entirely digestible. We're very proud of the way that we approach that work over the last year where there was no noticeable price disturbance for the amount of equity that we did issue through the ATM. And we're also proud of how the simplification proposal that's now been adopted and effectuated should allow that kind of equity issuance through at-the-market instruments to happen in a way that, as Sarah noted, won't disturb share price. But there's still a very reasonable pace that we think makes sense from a crawl-walk-run perspective. So we don't intend to rush things the opportunity set as we build it out at the Clearway Group level, gives us the ability to really pace things based on a speed that feels most comfortable for our public investors. In terms of the actual result in CAFD per share levels, certainly, other factors in the overall portfolio and the refinancing of our future debt maturities will also be factors that present themselves over time as we continue to extend contracts on our existing fleet. And we roll maturities, but again, I think our track record of planning that prudently and then beating the assumptions on the upside is well demonstrated. So I think our hope would be that each year, we build a pace that we think is sensible. We match it to appetite from our public equity investors and bondholders for forming capital for new growth investments and as our fleet continues to mature over time, we hardened the base volume of CAFD and the CAFD per share it contributes, and we continue to drive upwards to the top end or better of each new target range that we set. So I think I think really, it's about making sure that we're deliberate in the pace that we approach both the bond and equity issuances that are needed to fund the growth of the business. But we feel quite good about continuing the track record we have, which makes each new issuance well received.
Mark Jarvi: Makes sense. And just a follow-up on that. Like it does feel like the market is receptive to the strategy and the execution and the plan you put ahead there. So the ATM does not seem like a headwind for you right now. So as you look ahead on continuing to accelerate the growth, expand on the growth, is there anything else beyond just maybe going a little harder on the ATM that you're contemplating selective asset sales any other thing in the corporate structure like hybrid securities? Or do you want to kind of keep it very much plain vanilla capital structure for this point?
Craig Cornelius: When we look out through the plan to deliver up to the top end or better of our business plan just through our core business, the quantity of equity that would need to be issued in any given year is not a tremendously large number. It's digestible and consistent with what you see premium growth utilities who we aim to emulate routinely issuing through instruments like that. So we don't right now see a need to undertake the use of some other structure for rating capital that is more exotic than that. I think as we contemplate larger upside opportunities that we've denoted here that would be most likely to materially as further out in the kind of '29, 2030 and beyond time frame, we'll be a bigger company. The size of our float will be larger the amount of the retained in the business will be greater, the amount of leverage capacity and it will also be greater. And those things all work in a mutually reinforcing way that should hopefully allow us to continue to grow above scale without needing to look beyond the vanilla instruments we use today to fund that growth. But certainly, we'll be thoughtful about what's available in the market at that time. And the way that we'll choose to fund growth will be informed by the same virtues of prudence in capital formation and risk avoidance and capital structure that have put us here.
Operator: Your next question is coming from the line of Julien Dumoulin-Smith of Jefferies.
Hannah Velásquez: This is Hannah Velásquez on for Julian. Thanks for the update and congrats on the quarter. Just to kick off with my question, I had a follow-up on the data center opportunity or rather the large complex -- so I understand you're targeting a mix of resources across renewables and conventional. How do you think about -- I don't know what the right word is, but overbuilding, I suppose, your renewables. I've heard or I've read that if you were to say provide solar to cover your data center need because of the 25% capacity factor, call it, you would need a 4x overbuild on solar in that example. That the right way to think of it? And if so, does that imply that Clearway Group would perhaps bias more towards inventional.
Craig Cornelius: It's an interesting ratio that you're referencing. It's -- I don't think that, that's really representative of the way we've been designing these complexes or the way that we've engaged with. Customers for the generation they provide. I think the way that we've looked at these, we've -- first, with respect to the role of the gas generation. I think we're proud of the pragmatic perspective, we've maintained really since the inception of Clearway and its predecessor in Carnation is NRG Yield where we've seen that gas generation and renewables and now storage together can play a very complementary set of roles in a generation stack. And the way that they get mixed together most definitely varies from one location to another based on whether you've got a system that peaks in the winter or a system that peaks in the summer or the relative resource attributes in NCF, net capacity factor of one technology or another. And I think that's what you see in the design of the different complexes that we're building where you might see more or less solar nameplate capacity or more or less natural gas fueled nameplate capacity in 1 location or another. But we most definitely are not looking at I guess what your term was kind of like an overbuild ratio like that, the way this sort of works out is that we're identifying what the lease-cost best fit technology is in the location, assessing local site constraints. Determining how much generation that technology can provide during the 24 hours of the day in any 12-month period. And after determining what is cost effective and consistent with land use expectations in that community and at the federal level. Making sure that there is an appropriately sized gas or battery generator at that location to assure that we can provide for supply to the data center at that location or to the load serving entity that's going to play a vital role in balancing the system. So I would not say that rule of thumb is really something we see. And for example, in the case of the Montana complex, I'd say, you would not see that kind of a ratio of a solar generator to gas capacity?
Hannah Velásquez: And just as my follow-up, perhaps on the tax equity or the health of the tax equity capital markets, I know this has been a common theme for the past couple of months. But is there anything to comment there. We have heard that a few of the larger institutional tax equity investors have paused in response to some of the CEOC ambiguity. Is that impacting your sponsor in any way? Or I know perhaps Clearway Group is good about a domestic strategy in terms of procurement, but anything to comment there? And perhaps even if it's -- the impact is overstated amongst the market.
Craig Cornelius: Yes. Thanks for the question. I'm not in a position necessarily to address the broad market, but I can't address our experience. And I'm really proud to say I don't think we've been executing with tighter financing at size at any point in our history. For us, anyway, the markets for project debt for construction debt for tax equity tax credit transfer are the most robust we've ever seen them. We are organizing extremely efficient financing the size of the projects that we are now organizing financing for, which are principally pointed to the 2028 vintage because everything that we finance for -- or everything that sort of pointed to 2027 is largely complete already in financing. -- are some of the biggest projects that we've ever financed. We just closed a $1 billion tax equity facility that's the largest we've ever closed. And the banking community likes doing work with us because the projects we put together exhibit a nice risk-adjusted profile and they trust us with their capital. I think part of the other reason why we're on such good footing is that the safe harbor program we built for Clearway, I think, is really at the top of the industry in terms of its level of organization and rigor and planning. So I think the projects that we're completing now don't need to combine with the foreign entity of concern requirements that you're noting might have been difficult for some because of when we safe harbor those projects. But the equipment we purchased would comply anyway. So the combination of our domestic for supply chain, the planning we had for safe harboring and just the quality of Clearway Energy Inc.'s a sponsor, all mean it's been actually a very routine and robust period of time for us in financing projects. The last thing I'll note just because you did ask about safe harbor is that I think we're really proud of the way that we've planned that program for our development pipeline well out into the 2030s. So the same planning that put us in a position to be routinely financing projects right now for completion in 2027 and 2028 has put us in a position to look out well past 2030 with projects that will be eligible for tax credits and compliant with existing statute and guidance. So all in all, our finance team is doing a tremendous job they've already organized billions of dollars in financing this year, which is committed and have billions more to go, and this is really the best financing environment we've ever seen.
Operator: [Operator Instructions] Your next question is coming from the line Heidi Hauch of BNP Paribas.
Heidi Hauch: Congrats on the update here. I just want to ask -- you had another question on the digital infrastructure projects. I guess just thinking about the -- what we're hearing is natural gas projects, especially today are more expensive and complicated to build, just given siting constraints and equipment constraints. How should we think about the return premium that Clearway Group would need to earn on these complexes relative to the complexes that are kind of renewables only. Is it possible? Or should we think that some of that premium trickles down to a higher CAFD yield on those specific natural gas complexes. .
Craig Cornelius: The thing that I think you've noted at the end in using the word complex, probably becomes the most important word for purposes of SWN's investment opportunity. Our goal is to have the novelty and scale of these facilities to give the combination of Clearway Group and Clearway Energy Inc. an investment opportunity that produces great risk-adjusted returns. And we are focused as much on longevity and risk in structure as we are on the nominal return that a project can produce. So we're really -- we're thinking about both of those together -- as far as the gas generator in most of these complexes go, it remains still quite possible that the owner of that gas generation wouldn't be a Clearway company or affiliate, but instead a utility who's interconnecting the full basket of resources or the technology company themselves. So what entity owns the firming gas generation, I think, is something that's kind of a reflection of which entity is going to be in the best position to balance the colocated load and generation. And we think of our role here is assembling a set of generator technologies that can allow someone to run at a very high level of reliability, some very important digital computation infrastructure not to own a gas plant per se. But in all of these cases, some type of gas generation either there at the site or delivered through the system is pretty vital to balancing it. And there's certainly a value proposition for both Clearway Group and Clearway Energy, Inc. is a source of long-term capital in providing that kind of firming generation. And whether that is something that seen ultimately sees in the form of a very long dated low-risk return or a premium return, I think, is something that we will sort through in the future. What we are focused on today is creating these projects so that we have the opportunity to have that kind of thoughtful engagement, and we're doing very good at that right now.
Heidi Hauch: Great. That's very helpful. And just going to this updated corporate funding strategy, I guess, how would you think through as we go into 2030 plus? And even if there is a potential that you target that 1.7 gigawatts of incremental growth to 2029, that's not currently in the $3 billion plan. I mean we saw or we're seeing you upping your investment that -- and then maintain them upping external equity accretive equity. How should we think about funding kind of the next leg of growth? Do you expect that if you did pursue incremental growth for 2029, for example, you have more retained cash flow or more debt capacity relative? Or I guess, just like why not increase the percentage coming from corporate debt or the nominal amount coming from corporate debt and retained cash flow as you're increasing your full investment target?
Craig Cornelius: Yes, I think I understand your question, and I can sort of address it from the standpoint of basic principles. And then, Sara, I'll turn to you and you can maybe share an example of the way that we think about how incremental increases in corporate capital investment opportunity would be capitalized as we grow. So I think we're most definitely going to follow as the corporate capital deployment opportunity set grows the same algorithm that we've communicated for years. And we look first to retain cash flow as a preferred first source of capital for investment and growth. And then second to the bond markets and debt capital within a prudently managed capital structure. And we've talked about 4 to 4.5x is that prudent leverage ratio that we look to maintain as a business and that is a ratio that has been our range really going back for really, I think the entirety of our life as a public enterprise. And as we grow our fleet, both that amount of retained cash flow, especially into 2030 and beyond will be growing -- and as you note, our debt capacity is managed to that midpoint of that leverage ratio, for example, will be growing also, and we will certainly most definitely plan to make use of those sources of funding first. And then beyond that, there's some -- once those have been utilized, some basic formulaic relationship between the dollars of new corporate capital that we could deploy in a fraction of those that would be funded from debt or equity. And maybe to that end, Sara, I'll turn to you to just sort of provide a basic rule of thumb.
Sarah Rubenstein: Sure. Sounds good. So I think to Craig's point, the amount of capital that we plan to deploy to meet our 2030 target. Has already assumed that would use all available retained CAFD. And then we will fund the amount that we're able to through the issuance of corporate debt, which within our leverage ratio looks like about 45%. And that means for the incremental investment above sort of the baseline that we've indicated will need to get to our target range, which was that $2.5 billion of corporate capital that we already talked about. Once we get above that, we're able to issue corporate debt at about that 45%, but the balance of that 55% is going to have to come through the issuance of equity. But that -- because we're talking about achieving above the high end of the range we believe we'll be able to do that from a position of strength without causing significant disruption to the price.
Craig Cornelius: And that last point is really the most important point, which is that we're in the really fortunate position to have an opportunity set for Clearway Energy Inc.'s that allows us to think about setting our sights above the long-term goals we'd articulated just 6 months ago. So to the extent that we're thinking about in a measured way, 1 quarter after another, 1 year after another increasing the tempo or the scale of corporate capital deployment. We'd be doing that because it's evident that the cost of that ending makes each new investment accretive that our public investors welcome the proposition of our deploying that extra capital and issuing the securities that we need to issue to fund that. And it's not a necessity. So we feel really fortunate to be in the position we're in where that's a choice we can make rather than an obligation. And it's a thing that we can move through 1 step at a time. So I think we're not going to be surprising anybody with that because really, your question is oriented around time vintage that's 3 to 4 years from now, and we will all be able to get there together 1 step at a time.
Operator: There's no other question in queue. That concludes our Q&A session. I will now turn the conference back over to Craig Cornelius for closing remarks. Please go ahead.
Craig Cornelius: Thank you, everyone, for joining us today and for your ongoing support of Clearway. We're proud of the work we're doing to deliver new generating capacity in markets across our country with an array of diverse energy resources that are critical to the country's needs. Operator, you may close the call. .
Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.