Connor Teskey of Brookfield says the company has expanded its procurement via agreements with an array of equipment manufacturers in the U.S. and internationally.Brian Rankin/The Globe and Mail
The growing demand for clean power is strong enough to withstand higher tariffs and upheavals in the development of artificial intelligence, but increased costs from trade barriers would be passed on to customers, Brookfield Renewable Partners BEP-UN-T chief executive officer Connor Teskey said Friday.
As the White House promised to impose 25-per-cent tariffs on Canada and Mexico starting Saturday, Mr. Teskey said that large and rising demand for renewable power to fuel the build-out of AI models and other data-heavy applications such as cloud computing and cryptocurrencies far outstrips the available supply, even with a pipeline of new wind and solar projects under construction.
That should ensure that the business case for building new renewable power remains intact, with solid profit margins, even as the price of some equipment and materials used to build projects for generating electricity could go up, he said. Those price increases would ultimately be borne by the corporate customers that buy the electricity through power purchase agreements – and perhaps eventually by the consumers using their products.
“If incremental tariffs are added to equipment that is used to build out renewables, we would look to pass that cost through in the form of a higher PPA,” Mr. Teskey told investors on a Friday conference call. “The demand is stronger than ever before. And that means there is lots of capacity that should these things change the economics of a project, we will very simply push it through the PPA price.”
Brookfield has also expanded its procurement through agreements with a broader array of equipment manufacturers in the U.S. and internationally, Mr. Teskey said, which would give the company options to choose where to buy materials as trade disputes evolve.
“No matter how the tariff discussions play out, we will be able to maximize our sourcing of equipment from the most tariff preferential areas,” he said.
The renewable energy arm of Brookfield Asset Management Ltd. BAM-T has emerged as a major provider of clean electricity to some of the largest U.S. technology companies that are building the infrastructure to power rapidly evolving and energy-hungry AI models, but running up against a supply bottleneck. Brookfield Renewable’s most prominent contract is a framework deal signed last year with Microsoft Corp., which secured funding to bring 10.5 gigawatts of renewable generating capacity online between 2026 and 2030, giving Microsoft a vital new source of power to run its data centres.
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Brookfield is “on track to not only meet but exceed our delivery targets” for that agreement, Mr. Teskey said. But it takes time to get permits and approvals for new renewable energy projects, and those projects take years to develop.
“And that is the bottleneck in the system, not demand, not the willingness of customers,” he said.
The same dynamics could help prop up demand for clean electricity even as the emergence of DeepSeek, a Chinese company’s cheaply built AI model, rattled markets this week and raised questions about the costly and energy intensive path pursued by the largest U.S. technology companies.
If new approaches and models such as DeepSeek make AI more energy efficient, “that’s great,” Mr. Teskey said.
More efficient models would drive down costs. “And that means they’re going to become more prevalent, and they’re going to be in demand for more places, and it’s actually going to lead to faster growth in the sector, which is obviously good for broad-based electricity demand as well,” he said. “Even with the new technologies, the supply-demand imbalance is still wildly in our favour.”
On Friday, Brookfield Renewable reported fourth-quarter financial results that included a 19-per-cent increase in funds from operations, to US$304-million, and a $9-million net loss in the three months that ended December 31. The company also raised its annual distribution by 5 per cent, to US$1.492 a unit.