Clearway Energy (NYSE:CWEN) reaffirmed its 2027 cash available for distribution, or CAFD, per-share target of $2.70 or better while lowering its 2026 CAFD guidance after weaker wind resources affected first-half results.
For the second quarter, the company reported adjusted EBITDA of $409 million and CAFD of $167 million. Year-to-date adjusted EBITDA totaled $666 million, while CAFD was $237 million, according to Chief Financial Officer Sarah Rubenstein.
“Our flexible generation segment delivered solid execution in line with budgeted expectations,” Rubenstein said. Solar and battery results were affected by lower resource and realized revenues, while the wind fleet experienced below-typical wind at both Alta and the company’s ERCOT assets.
The revised guidance midpoint incorporates lower-than-P50 production assumptions for the second half, particularly at Alta and in ERCOT, Chief Executive Officer Craig Cornelius said. The low end assumes the El Niño-Southern Oscillation-related weather pattern persists through the remainder of the year. Cornelius said fleet controllable performance remained strong and management is aiming to finish in the upper half of the revised range.
Long-Term Growth Targets Remain in Place
Despite the 2026 guidance reduction, management said it remains confident in the underlying earnings power of the operating fleet and its longer-term growth plan. Clearway is targeting CAFD-per-share growth of 7% to 8% or more from 2025 through 2030 at the top end of its stated range.
Cornelius said the company now has greater visibility into a potential $3 billion of corporate capital deployment between 2026 and 2029. Approximately 70% of the investment needed to reach the top end or better of its 2030 target is already commercialized and in view, he said.
The company has identified more than $2 billion of growth investments across its 2027 through 2029 completion vintages. Its 2028 opportunity set includes more than 2 gigawatts of late-stage projects with signed or awarded contracts, including Swan Solar, Catamount, and Wildflower 2 and 3 solar-plus-storage projects. Construction mobilization for those projects is planned for the first half of 2027.
For the 2029 vintage, Clearway cited roughly 2 gigawatts of late-stage solar-plus-storage projects representing about $650 million of potential corporate capital investment. The company also said it has more development projects than the approximately 2.7 gigawatts it would need to build in that year to exceed the high end of its 2030 targets.
Management plans to update its five-year CAFD-per-share growth and capital-allocation targets on its third-quarter earnings call, when it expects to extend the outlook into 2031.
Fleet Enhancements and Capital Plan
Clearway completed long-term power purchase agreement transactions for all three ERCOT wind projects it set out to enhance. The agreements extend contracted terms for more than 600 megawatts beyond 2040, increase projected EBITDA and CAFD, and improve cash-flow visibility, Cornelius said.
The company continues to expect to deploy about $600 million into its repowering program, targeting CAFD yields of 11% to 12%. Cornelius said PPA restructurings at the Elbow Creek and Langford wind projects are expected to be accretive to EBITDA and CAFD beginning in their first month of effectiveness, even after financing obligations associated with prior hedge settlements.
Rubenstein said Clearway expects retained cash flow to contribute more than $500 million of funding between 2026 and 2029 as it works toward a long-term payout ratio below 70%. The company expects to raise more than $1.5 billion in corporate debt over that period, including $600 million already raised, while maintaining a targeted corporate leverage ratio of four to four-and-a-half times in support of a BB credit rating.
External equity is expected to contribute roughly $500 million to $1 billion from 2026 through 2029, including $50 million raised to date. Rubenstein said the company intends to issue equity only when it is demonstrably accretive and can be done in ways that limit market impact.
Digital Infrastructure Offers Potential Upside
Clearway Energy Group is developing co-located digital infrastructure complexes that management described as an additional opportunity beyond its core growth targets. The pipeline includes more than 17 gigawatts of co-located generation under development, with more than 6 gigawatts at MISO South and Wyoming complexes included in the group’s reported pipeline.
The company is targeting completion of the first phases of generation capacity at these complexes in 2029. Cornelius said the Wyoming complex’s first generation is still expected at the end of 2028, while the 2029-2030 timeline reflects when the project could first serve data-center load.
Management said digital infrastructure investments are not included in the company’s current 2030 targets and would likely be considered for Clearway Energy as projects become sufficiently commercialized. Cornelius said the company expects these projects to feature 20- to 25-year contracts and risk-adjusted returns similar to renewable, battery and natural-gas tolling assets in its core portfolio.
Clearway also said it continues to see a robust market for projects that can be completed within roughly 36 to 48 months and have established interconnection positions and permitting paths. Cornelius said the company has more than 8 gigawatts of contracted or awarded projects year to date, including commercial and industrial customers, though he said hyperscalers generally show the highest willingness to pay in markets where direct sales are possible.
On third-party acquisitions, Cornelius said Clearway’s organic development pipeline is sufficient to achieve its long-term goals. The company is currently focused on integrating and improving assets acquired last year rather than relying on additional project M&A for growth.
About Clearway Energy (NYSE:CWEN)
Clearway Energy Group (NYSE: CWEN) is a U.S.-based energy company specializing in the ownership, operation and development of clean and conventional power generation assets. The company’s portfolio spans utility-scale wind and solar farms, biogas and natural gas-fired thermal facilities, as well as distributed generation projects such as rooftop solar and energy storage. Clearway’s generation assets are largely underpinned by long-term power purchase agreements and service contracts with creditworthy counterparties, enabling stable, predictable cash flows.
Originally launched in 2013 as NRG Yield and rebranded to Clearway Energy in 2018 following a strategic sponsorship change, the business has grown into one of the largest independent renewable energy platforms in the United States.
