Clearway Energy, Inc. (CWEN) Q1 2022 Earnings Call Transcript

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Clearway Energy, Inc. (CWEN -2.28%)
Q1 2022 Earnings Call
May 05, 2022, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Clearway Energy Inc. first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode.

After the speakers’ presentation, there will be a question-and-answer session. [Operator instruction] Please be advised that today’s conference may be recorded. [Operator instruction] I would now like to turn the conference over to your host today, Chris Sotos, president, and CEO of Clearway Energy Inc. Please go ahead.

Chris SotosPresident and Chief Executive Officer

Good morning. First, thank you for taking the time to join today’s call. Joining me this morning is Akil Marsh, director of investor relations; Chad Plotkin, chief financial officer; and Craig Cornelius, president, and CEO of Clearway Energy Group. So they’ll be available for the Q&A portion of our presentation.

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 [inaudible]. In addition, we 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 today’s presentation. Turning to page 4. First quarter results, which on a seasonal basis is the smallest contributor for the full year worthiness of three range, with CAFD of -2 million for the quarter, which is historically our latest quarter for CAFD degeneration, due to the timing of debt payments and low renewable generation. So we also increased its dividend by 2%, 2.3536 per share, or 1.414 on annualized basis, thereby keeping us on track to deliver the upper end of our range in dividend growth objectives for the year.

Importantly our sale thermal business closed on May 1st with $1.35 billion of expected net proceeds, which after accounting for $600 million of previously committed growth investments, leaves Clearway with $750 million in capital available to be allocated. As a result of the thermal sale, we’re revising our CAFD guidance for 2022 to $365 million. Through this performance, the outlook remains on track. With less than $56 million of previously announced committed investments to fund, and with COD on track for 2022, and 2023 as previously planned.

When completed, these renewable assets will put Clearway performer CAFD at $385 million or $1.90 per share, with $750 million of unallocated capital remaining to be deployed. In working with a Clearway group of colleagues, we continue to advance the development projects that we’ve announced previously. I want to take a moment to address some of the concerns in the market generally, regarding supply chain challenges and other risks. The broader economy here in our country is, of course, grappling with dislocations in supply, an increase in the cost of labor, commodities, and freight.

Electric power industry is no different. Uncertainties in the policy environment for renewable power, certainly add to that damage  but businesses like ours have to address. But, admits those pressures, we look at the business we have seen for Clearway Energy Inc. as one that is very well insulated from complexities.

Leaving us very confident in our ability to fulfill the upper range of our long-term future growth strategy of 5% to 8% through 2026. But Clearway enterprise as a whole has the benefit during these times of having tremendous scale, diversification, and financial flexibility, which together put our integrated enterprise in a sweet spot generally, and especially in working conditions like these. We see this in the fact, that Clearway Group has a pipeline that is large enough, diversified enough. It can provide Clearway Energy Inc with capital investment opportunities, that will hold up across various market and policy scenarios.

And because of this ownership interest in $85 million shares of C-one, when Clearway Group those projects, their goal is first, how to meet the capital deployment needs we have for balancing providing our shareholders with strong capital accretion. This allows the entire enterprise to involves a period such as this, so they flex the system to assure that C-one is able to invest its targeted capital deployment levels, and also its target in terms. As well, so Clearways Developments platform and its parentage and GIP are also large enough to prevent prioritization with suppliers and other stakeholders in complex situations arise. They bring to the procurement work a deep understanding of policy and global reach, which has led to supply chain strategies that are proving relatively resilient.

And very importantly, the capital investment requirements we need to meet to drive our [inaudible] requirements at Clearway Energy Inc., are substantial, but not so great that our sponsor can’t be surgical about the choices it makes on supply chain. That is Serena spoke today, as her sponsor has been able to establish supply chains and project plans, that are both policy resilient, and redundant their ability to enable our meeting the goals that we set for capital deployment. As a result of this, I’m pleased to announce an increase in the amount of capital we expect to deploy, relative to Clearway Group’s development projects to at least $300 million, an approximate 8.5% cap field. The development projects provide a strong start to the allocation of excess capital, giving Clearway Energy Inc.

composite it can achieve or beat the $2.15 per share outlook when $50 million in proceeds from the thermal sale are completely deployed. Turn to page five. Let me spend some time reemphasizing Clearway Groups’ approach to development, and how the scale supports C-one as a whole. On the left side of the page, you can get a better view of Clearway Groups’ develop and scale.

With over 22 gigawatts of projects, an increase of three gigawatts since last quarter. It is diversified among wind, solar, and batteries with 6.7 gigawatts of late-stage development. Execution of this pipeline will benefit from rational policy decision making [inaudible] into accelerated enactment of clean energy tax credits, currently be advanced through Congress. The pipeline is robust, it can able growth of Clearway Energy Inc.

across the spectrum of policy sales. Moving to in the longer-term investors include. It is important to note the Clearways Group pipeline is five times larger than at the time of GOP investments. To elaborate further, facts and circumstances make us confident that we are positioned to deploy the $56 million permitted capital we have planned for investment, and to [inaudible] target solar during 2022 and 2023, because of their status in construction, and because the supply chain has been used for the projects.

First and foremost, with respect to the projects being constructed in Hawaii. Those projects received their power supply prior to the commencement of investigation, and are now advancing into commissioning or will be completed this year, all without being subject to the risk of duties arising out of the Commerce Department’s inquiry. And second, with respect to Daggett, the project makes use of a supply chain, designed to enable use of US-made polysilicon. Processing that polysilicon into wafers, cells, and modules.

With each step occurring outside of [inaudible] The scope of the anti-circumvention petition did not target a supply chain of this configuration, a fact affirmed in a memo issued earlier this week on May 2nd by the Commerce Department. And which Daggett modules made with wafers produced outside of China are not subject to the increase. Policy of these four targets to fail have been extended by six months into 2023, for extension and able to be established on the supply chain, which we pleased to be able to utilize. Moving to the right side of the slide, and looking ahead to the next wave of growth we are planning with our sponsor.

We believe should prove similar, between solar funds that we now hold an option to investment on fully operational, or being constructed with solar modules already in the country today. And across the range of subsequent projects that Clearway did this time for Texas with expansion. Expansion of our portfolio in [inaudible] and PJM is advancing projects that make use of both wind and solar technologies, providing diversification against policy risk, and also has secured redundant medical supplies for producers whose manufacturing footprint, includes supply chain options that are outside of the scope of the Commerce Department’s investigation, as is presently defined. As noted, these investments will have a where the average contract tenure of 18 years, and we’ll at least $300 million of capital deployment, an average 8.5% cap field, and approximately 10% cap field.

We are working with Clearway Group to arrange a succession of financial closings for these dropdowns over the forthcoming months, with the majority of those planned for the next six months. Importantly, the range of projects and flexibility and capital structures, they can deploy, reinforces our confidence the $300 million capital deployment go can be about, and the right policy choices on trade are ultimately made by the administration. We also see new energy, clean energy tax credits enacted. We would anticipate the ability to deploy substantially more capital into the family of projects, with a corresponding increase in the capacity that they will generate over time.

In summary, three groups to help in scale and flexibility provide C-one with transparent, and a core growth strategy driving CAFD per share growth in the future. We are optimistic about what the outlook holds C-one shareholders. Turn to page six. Page six updates are projected by progress to the $2.15 of CAFD per share, as we deploy the center and $50 million of extra cash proceeds.

Given the increase from $250 million to at least $300 million, we foresee this potential dropdowns from Clearway group. We now see that we have line of sight to $26 million of additional CAFD versus $21 million of CAFD that we presented last quarter,  where $2.04 of CAFD per share an outcome, with the $450 million of proceeds remaining. Over the next several quarters to four to [inaudible] increasing the deployment of capital, and achieving, or exceeding the 2 15 by this time next year. With that, I’ll turn it over to Chad.

Chad?

Chad PlotkinChief Financial Officer

Thank you, Chris. And turning to slide eight. Today, Clearway is reporting first quarter adjusted EBITDA of $260 million in cash available for distribution, or CAFD of -$2 million. An amount within the company’s expected quarterly sensitivity range.

During the quarter, the company’s conventional segment performed in line with expectations. For renewables, the utility-scale solar portfolio performed well, as overall conditions led to production 6% over expectations. However, this was offset by more challenging operational conditions at our wind portfolio, which impacted results during the quarter. Overall, while first quarter CAFD results were at the lower end of the company’s target quarterly sensitivity range, we note that due to the seasonality of our portfolio, the first quarter is generally a small contributor to full-year results.

As previously discussed, due to the original uncertainty of when the thermal transaction would close, 2022 CAFD guidance was originally established as a C-one owned the thermal business for the full year. With the thermal sale now complete, we are updating our 2022 CAFD guidance to $365 million, which no longer factors in the expected contribution from the thermal business beginning in May of this year. As a reminder, 22 CAFD  guidance continues to assume the achievement of full-year P50 renewable performance, and does not factor in the full contribution from existing committed growth investments, which informs the expected $385 million in pro forma CAFD that Chris referenced earlier. For further information, as it relates to the seasonality, expectations of the portfolio, and the timing of expected CAFD realization from our growth investments, please refer to the appendix section of today’s presentation.

Turning to the balance sheet, adhering to our long-term credit metrics while maintaining flexibility, and how we fund growth continues to be core to our overall business strategy. As discussed on our previous quarterly calls, due to the timing of when we expected to receive the net proceeds from the thermal sale relative to when we needed to finance committed growth investments, we required temporary financing to bridge the company’s capital needs. Now, with the thermal sale complete, we have fully repaid the outstanding $640 million in short term borrowings, as of the end of the first quarter, which included the $305 million under the revolver, and the $335 million bridge loan used to fund the acquisition of the remaining interest in the Utah solar portfolio. With these repayments, the company’s pro forma credit metrics are now back in line with long-term targets.

There are no cash borrowings under the revolver, and the company has virtually no interest rate exposure, as 99% of our consolidated long-term debt is fixed with the earliest corporate maturity in 2028. With the strength of our balance sheet and the excess $750 million in proceeds from the thermal sale, C1 now has unprecedented flexibility to execute on its long-term objectives, as significant growth can be achieved without requiring capital market access, while also maintaining our balance sheet targets. Now, I’ll turn the call back to Chris for closing remarks.

Chris SotosPresident and Chief Executive Officer

Thank you, Chad. Turning to page 10. Our goals for the year is simple. First, to achieve our financial and operational commitments.

You close the formal transaction. We are on track to hit our revised CAFD guidance for the year. We intend to increase our dividend at the upper range of our long-term 5% to 8% DPS growth target. As we discussed during this presentation, we and our colleagues at Clearway Group, are focused on allocating our excess capital to new dropdown asset, and providing greater visibility to the achievement of the 2 15 and CAFD pressure on deploy.

And finally, we continue to engage in discussions to hedge our natural gas assets with emphasis on also going to. In conclusion, I think overall the first quarter is really one about execution, and moving forward with our growth plans and I think we’ve made a great start to the year. Operator, please open the line for questions.

Questions & Answers:

Operator

Thank you. [Operator instruction] And our first question comes from the line of Julien Dumoulin-Smith with Bank of America. Your line is open. Please go ahead.

Julien Dumoulin-SmithBank of America Merrill Lynch — Analyst

Hey, good morning, team. Thanks for the time and the opportunity to connect. I hope you guys are doing well. Couple of questions here.

First off, congrats on the thermal sale here. Just curious a little bit more, if you can elaborate on how you think about redeployment proceeds, timeline, etc.. What is that marketplace look like at present? How much is the trade and development activity impairments impact that all your ability to look at other assets that are already operating here? Just curious on the timeline, now that you got the cash in hand, how long are we going to need to wait? And then I’ll just throw the second question, brief clarification. Just what were the operational issues and just tied to win that you alluded to a second ago, Chad?

Chris SotosPresident and Chief Executive Officer

Sure. Thanks, Julien. And I’ll take the first one, and I’ll let Chad kind of take the second, obviously. Your first question, as usual, a couple of pieces to unpack in your questions, Julien.

But for part one, basically, the timing of it will be that $300 million will kind of be spent in conjunction with development projects, or I would say over 22, 23, and 24. In terms of the deployment of the remainder of that capital, we’re working to deploy it, frankly, now. We’ll see how kind of all that goes. But I think for us, we definitely want to make sure that we can come to a conclusion.

But I would say, by this time next year, when we’ve had calls previously, I kind of set out after a year of trying to deploy capital, we haven’t found a use for it. That would then make sense to return to shareholders. So I think for our view about we intend to deploy the capital by kind of this time next year and the round-up. And now  Chad, for Julien’s second question.

Chad PlotkinChief Financial Officer

Yeah, sure, Julien. I mean, if you look at some of the data in the appendix, Julien, I’d say there were certain instances in the quarter where resource was not optimal to what our expectations were. We also had some availability challenges that some of the outset, say in Texas, in the Midwest, when we had some of the I thing that happened in February and early March, which pushed down availability, and then obviously, would push down revenue capture as well. Those were a couple of the core items that I would say impacted the wind assets during the quarter.

Julien Dumoulin-SmithBank of America Merrill Lynch — Analyst

Just going back to what you said a second ago, I mean, you flagged it after you made returned it to shareholders here, again, that’s certainly not the core expectation. You’re right, again. I don’t want to put words in your mouth. I just want to just make sure I was right there.

Chris SotosPresident and Chief Executive Officer

Julien, the goal is to deploy the capital the most efficient way as possible. If the great depression hits in the stock at 17, we might have a different view. But I think given where we sit right now, the focus is on redeploying it into other assets.

Julien Dumoulin-SmithBank of America Merrill Lynch — Analyst

Got it. And at risk of pushing a step further.  Any evolving focus as you think about wind and solar versus the litany of other asset classes within energy transition. Just curious if they’re setting expectations early if you guys are looking at anything more novel.

Chris SotosPresident and Chief Executive Officer

I don’t think anything in particular, Julien. Once again, I don’t think the majority of those access processes would be in a completely different asset class, if that’s your question, maybe at the margin. But that very minimal, I would think.

Julien Dumoulin-SmithBank of America Merrill Lynch — Analyst

All right. Excellent. Well, thank you, guys. Best of luck.

We’ll talk soon. Thank you.

Chris SotosPresident and Chief Executive Officer

Thank you. 

Operator

And our next question comes from the line of William Grippin with UBS. Your line is open. Please go ahead.

William GripinUBS — Analyst

Good morning, and thank you. My first question just on the Commerce memo a couple of days ago. It appears to clarify that the duty rates, if any, ultimately end up being applied on Southeast Asian module imports would be equal to the companies existing rate for imports from China. Do you think that potentially gives developers or manufacturers enough clarity now to kind of restart imports now that sort of that risk can actually be quantified?

Chris SotosPresident and Chief Executive Officer

Craig, take that one, you’re in the best position.

Craig CorneliusPresident and Chief Executive Officer, Clearway Energy Group

Yeah. First, just to emphasize, that same memo provided the clarity that I think we were looking to see for the committed projects that were advancing into construction, and that align with the $56 million worth of upcoming investments for the CWEN, as noted before. So I think, at least as far as our company is concerned, that’s more of a question about the environment for future projects. Just to state that unequivocally.

But for the broader industry is context. I think our perspective is that the Commerce Department in that memo was looking to do something helpful to the industry, and trying to create a ceiling that people could look to as a basis for structuring financing, so projects could commence construction with an understanding of how high the potential duty load might go. But as the broader landscape of industry, participants has consulted with each other over the course of the last couple of days, I think our collective perspective remains the same, which is that we’re grateful for that helpful gesture, but that fundamental revisiting of what product definition is within the scope of the inquiry, we still believe to be unlawful. And the focus for the commerce department really should be on getting to a negative determination in that inquiry, which we believe to be inconsistent with one prior precedent.

And I think, that’s really where the focus needs to remain for the commerce department, because that the spectrum of potential duty levels that are produced by that the fact that some wafer producers have no corresponding company-specific tariff rate because they don’t also make solar cells and modules. Means, that it is helpful, but not really what the industry requires in order to achieve the kind of growth that the economy needs. And that also is needed toward the climate goals.

William GripinUBS — Analyst

Understood. OK. And my last question here is just on the 8.5% target yield on the reinvestment of the 300 million. I’m curious, to what extent is that based on your ongoing discussions versus perhaps just conservative assumptions, particularly here in light of the rising rate environment? 

Chris SotosPresident and Chief Executive Officer

Sure. I think it’s really, the rising rate environment, I don’t think has translated precisely through where a marginal bid is externally for assets, that may take some time. So if your question is, boy, should we expect to really do that much better than eight and a half, especially on the development and dropdowns from CEG? I don’t think that’s a good working assumption. That eight and a half is kind of taking into account where those projects are and the economics of them.

I don’t think you’re going to see a very elastic curve, with the movements you’re seeing in treasury directly translatable to higher CAFD fields for the very, very short term investor question.

William GripinUBS — Analyst

Very clear. All right. That’s it for me. Thanks very much.

Operator

Thank you. And our next question comes from the line of Colton Bean with Tudor, Pickering and Holt. Your line is open. Please go ahead.

Colton BeanTudor, Pickering, Holt and Company — Analyst

Morning, Chris, thank you. You just touched on this in terms of valuation impact, but I guess just broadly for the third-party M&A market. Can you describe the level of activity you’re seeing there and the opportunities that you see for that remaining $450 million? It doesn’t sound like we’ve seen a shift in the evaluations, but I also would appreciate an update, if any.

Chris SotosPresident and Chief Executive Officer

Sure. I mean, I think to answer your question, important, there is a large amount of assets that are out there. I think obviously, we do our own sourcing as well on a bilateral basis. And so from our view, [inaudible] auctions for assets that are out there where it makes sense, we also engage in bilateral.

I think to your question around, are we seeing the move in treasury, so to speak, move through in terms of a new bidding paradigm, not the cheaper question? I think a little bit that remains to be seen. There haven’t been a lot of bids lately, that kind of have gone out to see if the move in treasuries and the like have actually moved the overall pricing of assets. So I think it’s a little that remains to be seen, but I think the one part to emphasize is we can really be patient in our capital deployment. It’s not as though with the $450 million, we need to get it done in three months or something of that nature.

So I think the kind of your question, as well as some others, we’re really going to take our time to make certain that we’re investing in the appropriate assets, that are quality assets, and that appropriate returns to make sure that we can kind of group for the long-term because we have the flexibility of timing and not needing to do something here in the next three, six months to kind of get the cash off our balance sheet. That’s not the tone we’re going to take.

Colton BeanTudor, Pickering, Holt and Company — Analyst

And then just on the development pipeline, any change to your approach in securing long lead items? Are you looking further afield maybe to earlier-stage projects, and starting those conversations a bit earlier than you otherwise would have?

Craig CorneliusPresident and Chief Executive Officer, Clearway Energy Group

Yeah, we’ve done that. I think I understand your question to be, are we securing major components for projects at an earlier juncture in a project lifecycle than we might have historically in the industry? And the answer is yes. So for example, for the projects that you see. Reference for the roughly two gigawatts worth of new dropdown opportunities on which we are focused today.

We’ve secured the major components for all those projects and in a past industry paradigm that might not be the case. Generally speaking, as we’re developing projects today, we are now looking to sign agreements that entitle us to the required components for a project at the same time that we’re signing the revenue contracts that represent the bulk of the project’s planned capacity. So we’re doing that earlier, and I think that’s best both for us, and our off-takers, because in an environment that is now inflationary, and also over a 24-month interval, harder to predict in terms of evolution than the last decade was for us, and our customers. It’s best to decide at the same time what the project, design, and capital costs will be into it, assure each other that we’ve reached an agreement on the revenues that we require for the project to be feasible.

So yeah, we’re procuring or we are to enable that certainty. And I think one of the things that we enjoy in Clearway group at the parent entity level is we have a very substantial balance sheet, and in our ultimate upstream parent, a source of capital that is greater than we can ever really require. So when we can make rational decisions that help us advance a pipeline with more certainty than others, we’re doing that. And  we think that kind of advantage is going to endure to us in the marketplace during the course of the next few years.

That’s helpful. Appreciate the time.

Operator

Thank you. And our next question comes from the line of Michael Lapides, Goldman Sachs. Your line is open. Please go ahead.

Michael LapidesGoldman Sachs — Analyst

Hey, guys. Thank you for taking my questions. I have two that are kind of unrelated to each other. I apologize for that.

Question number one is, just broadly speaking when you’re looking at you at utility-scale solar and storage contracts today, and what the PPA prices were, and also at wind contracts today, what the PPA prices are. The kind of just compare them to what they were 12 or 18 months ago. How big of a change? Like, how much are PPA prices in the marketplace? And I know there’s some uncertainty obviously with the Department of Commerce overhang. But just curious, just on broader inflationary and supply chain trends.

How much are PPA prices changing in the marketplace?

Chris SotosPresident and Chief Executive Officer

Sure, Craig?

Craig CorneliusPresident and Chief Executive Officer, Clearway Energy Group

Yeah, substantially. But what’s interesting is that I think our customers, relative to the range of alternative sources of supply, stealthy financial benefit, and those elevated PPA prices. And of course, continue to have long-run decarbonization goals that they’re trying to meet. To put numbers to it, I mean, they’re substantial, 15% to 30% increases in wind PPA rates over the space of the last 16 or 6-months in some areas.

Sort of resource adequacy, contract pricing on battery deliveries for sort of the near term is substantially higher than that in terms of percentage values. For solar PPA rates, again, there are substantially higher than those percentage values. As you can appreciate, Michael, there’s a variety of idiosyncrasies that come with resource and project location. But the bottom line is PPA prices are increasing between 15% and 50% roughly for vintages during the course of the next 24 to 36-months.

But they still offer, I think, relative to alternatives, a pretty favorable value proposition for customers. We’ve seen upward trends on RECs that are even higher than those percentage values. And I think what that also reflects is the fact that sort of supply chain dislocation, and project completion timelines are converging with escalating demand for renewable energy products, lead customers to be prepared to pay more for those. So in total, we are seeing a pretty significant escalation in renewable power prices, as somebody who wants to see the resource accelerate broadly across the country as fast as possible, I don’t relish the fact that market conditions require that, but we’re seeing customers be prepared to continue to engage with us in advance projects forward, even with that price escalation, because the renewable projects relative to other fuel sources are still disinflationary.

Michael LapidesGoldman Sachs — Analyst

Got it. OK. That’s super helpful. The second question, unrelated one little quiet on this topic.

Any update on the California gas plants?

Chris SotosPresident and Chief Executive Officer

A very simplistic, Michael. Not a big update. I mean, we continue to work on it. I think that we’ve talked about a little bit previously is most of the California ISOs procurement comes in the second and third quarter.

So we will work on that continually, but that’s probably we will get a next significant update is probably more third quarter along those lines.

Michael LapidesGoldman Sachs — Analyst

In any thoughts on what any potential change in the retirement of Diablo Canyon? Obviously, there’s been some press out of the governor’s office. What that would mean for one of those, and one of the assets you own?

Chris SotosPresident and Chief Executive Officer

I really don’t see that big a delta, just because of as we talked about over the years the importance of the assets we do have. And I think in a lot of ways, given what we’re seeing in the market today, those assets are as needed, if not more so than ever. I don’t think it really affects things that much, but remains to be seen.

Michael LapidesGoldman Sachs — Analyst

Got it. Thanks, guys, much. Appreciate it.

Operator

Thank you. And our last question comes from the line of Noah Kaye with Oppenheimer. Your line is open. Please go ahead.

Noah KayeOppenheimer and Company

Thanks for taking the question. Can you give us a bit more of an update on the battery supply situation, what you’re seeing in terms of cost increases there, and any kind of push-out delivery dates? How are you managing that aspect of the project development?

Chris SotosPresident and Chief Executive Officer

Craig?

Craig CorneliusPresident and Chief Executive Officer, Clearway Energy Group

It’s an interesting dynamic because there’s so many different factors that converge on the one hand, accelerating demand for use of batteries in automotive applications has strained the supply expansions that were planned already by different manufacturers. But push-out of paired solar and storage projects in the US have tempered some of the pricing escalation that we were seeing taking off at the beginning of this year. For our companies specifically, I think we enjoy prioritization of customers or of suppliers, I should say, both because of the many gigawatt-hours worth of batteries we have procured, or are planning to procure for project completions during the next four years. But also upstream from Clearway Group and Clearway Energy Inc., GIP is our owner, it is a global investor with a very global footprint of renewable and storage investment.

And, and those suppliers recognize that as they’re engaging with us, they’re, they’re also sort of engaging with that broader family. we’re able to have strategic conversations with them, and within for those to keep our project schedules on track. As we look forward, I think our company and others like us are looking to establish analogs to the type of framework agreements that the automotive industry implies with those suppliers, and with those framework agreements to give ourselves certainty of supply, certainty of cost structure within ranges, and also evolution of what that manufacturing footprint might look like. And the suppliers with whom we’re engaged on those types of framework agreements really see how essential it is for the long-run story our industry can tell for policymakers and citizens in America that they build a manufacturing footprint here in America.

So as we’re crafting those framework agreements, we are first looking to secure adequate supply so that we can build the resources that our customers need here. Second, looking to establish a corridor of costs that allow us to be confident in developing projects. But third, also looking to accelerate establishment of battery supply chains here in the continental US, so that footprint can both diminish risk around trade and freight, but also make good on the kinds of commitments that we’re looking to make for policymakers as they establish a more robust environment for incentives for the deployment of batteries and renewables.

Noah KayeOppenheimer and Company

Great. Thank you, Craig. And just a quick housekeeping item, if I can clarify. There’s a helpful table in the appendix around the contribution of committed or closed growth investments on full-year basis [inaudible] for 23 and 24, possible to give us roughly what that might be for 2022? How material it is?

Chris SotosPresident and Chief Executive Officer

Chad, wants to take that because I think it’s basically the $56 million record.

Chad PlotkinChief Financial Officer

Yeah, maybe, I wasn’t exactly following the question. So are you just asking how much of that incremental capital would come in 22?

Noah KayeOppenheimer and Company

No, how much of the [inaudible] contribution in 2022 is from the Committee of Close Growth Investments?

Chad PlotkinChief Financial Officer

Oh, well, I think, if you think about it from a timing perspective. So what I would say, is if you look at the table, which I believe you’re looking at a slide 14, so obviously, anything that had funded through the end of last year, or in the early part of this year, so really through blackrock, that’s almost entirely encapsulated in our 2022 expectations. I would say with regards to Mililani [inaudible and Daggett, not that’s somewhat of a negligible contribution in the 2022 forecast. So what I’d ask you to do is, is that what we try to do is give a sense of the shape as those materialize, which you can see on slide 17.

So basically the way I would think about it is, is that assuming we had all of our targets on CODs’ and those begin to generate the revenue and associated CAFD, we would expect to see a pretty sizable bump up starting next year.

Chris SotosPresident and Chief Executive Officer

Right. So if I could just reflect that what’s in CAFD for this year is done, and whatever gets done this year in terms of additional projects, it is in a contribution would be upside.

Chad PlotkinChief Financial Officer

That is a fair way to think about it.

Noah KayeOppenheimer and Company

Great. Thank you.

Operator

Thank you. And that does conclude today’s question-and-answer session. And I would like to turn the conference back over to Chris Sotos for any further remarks.

Chris SotosPresident and Chief Executive Officer

Thank you, everyone, for your time. Appreciate the support. And everyone, stay safe. Thank you.

Operator

[Operator signoff]

Duration: 39 minutes

Call participants:

Chris SotosPresident and Chief Executive Officer

Chad PlotkinChief Financial Officer

Julien Dumoulin-SmithBank of America Merrill Lynch — Analyst

William GripinUBS — Analyst

Craig CorneliusPresident and Chief Executive Officer, Clearway Energy Group

Colton BeanTudor, Pickering, Holt and Company — Analyst

Michael LapidesGoldman Sachs — Analyst

Noah KayeOppenheimer and Company

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