Britain’s National Grid has finalized an agreement to sell its U.S. onshore Renewable Energy business to Canadian investment firm Brookfield Asset Management for $1.74 billion, including debt.
The deal is part of National Grid’s broader strategy to refocus its investments on energy networks and divest certain assets, including its renewables business and the Grain liquefied natural gas (LNG) terminal in Britain.
This move aligns with a growing trend among energy companies such as Shell, BP, and Equinor, which have been scaling back investments or selling off their renewables and low-carbon businesses due to declining profitability, Reuters news report said.
National Grid originally announced its divestment strategy in May 2023, citing a desire to concentrate on its core infrastructure business, which includes operating Britain’s energy systems and managing transmission and distribution networks in parts of the United States.
The sale to Brookfield includes institutional partners such as Brookfield Renewable Partners, a key player in renewable energy investments. The deal is expected to be completed in the first half of the financial year ending March 31, 2026, pending regulatory approvals. National Grid Renewables, based in Minneapolis, develops and operates solar, onshore wind, and battery storage projects across the United States.
The company currently has 1.8 gigawatts of renewable energy capacity in operation, with an additional 1.3 gigawatts under construction. Brookfield Renewable Partners, which is involved in the acquisition, has a vast portfolio of renewable energy assets in the U.S., including hydropower, wind, solar, and energy storage facilities spanning 34 states.
The deal reflects the shifting priorities of traditional energy companies, many of which are reassessing their renewable energy investments amid financial pressures and evolving market conditions. While renewable energy remains a key part of global decarbonization efforts, many firms are finding that profit margins in the sector are lower than initially anticipated, leading to a reallocation of resources toward more stable or higher-return assets.
By selling its U.S. renewables division, National Grid is positioning itself to focus more on energy transmission and distribution, sectors that are critical for maintaining and expanding infrastructure as energy demand evolves. The sale also underscores the growing role of investment firms like Brookfield in acquiring and managing renewable energy assets as part of long-term investment strategies.
In 2024, Brookfield Asset Management demonstrated remarkable growth, setting new records across its operating and financial results, positioning itself for sustained success in the renewable energy sector. With its strategic focus on low-cost renewable technologies, such as solar, wind, and hydro, alongside significant investments in energy storage systems, the company is well-positioned to capitalize on the growing global demand for sustainable power.
The company’s investment strategy in 2024 proved highly effective, yielding a 10% year-on-year growth in funds from operations (FFO) per unit. This success was driven by a blend of inflation-linked and contracted cash flows, strategic acquisitions, and organic growth initiatives.
Notably, Brookfield Asset Management has invested $12.5 billion in high-growth assets, including a significant stake in Neoen, a global leader in renewable energy.
Additionally, the company’s capital recycling efforts generated $2.8 billion in proceeds, with a 25 percent internal rate of return (IRR). This success allowed the company to continue funding its growth initiatives while providing significant returns to its investors.
Baburajan Kizhakedath