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PROPERTY, PLANT AND EQUIPMENT
 12 Months Ended
Dec. 31, 2019
Disclosure of detailed information about property, plant and equipment [abstract]  
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT, AT FAIR VALUE
The following table presents a reconciliation of property, plant and equipment at fair value:
(MILLIONS)
Notes
 
Hydroelectric

 
Wind

 
Solar

 
Other(1)

 
Total(2)

As at December 31, 2017
 
 
$
22,399

 
$
3,803

 
$
575

 
$
319

 
$
27,096

Additions
 
 
212

 
36

 
47

 
6

 
301

Acquisitions through business combinations
3
 
—

 
125

 
86

 
—

 
211

Transfer to assets held for sale
5
 
—

 
(58
)
 
(691
)
 
—

 
(749
)
Items recognized through OCI:
 
 
 
 
 
 
 
 
 
 


Change in fair value
 
 
3,775

 
466

 
313

 
4

 
4,558

Foreign exchange
 
 
(1,138
)
 
(256
)
 
(77
)
 
(41
)
 
(1,512
)
Items recognized through net income:
 
 
 
 
 
 
 
 
 
 


Change in fair value
 
 
(33
)
 
(20
)
 
—

 
(8
)
 
(61
)
Depreciation
 
 
(536
)
 
(236
)
 
(25
)
 
(22
)
 
(819
)
As at December 31, 2018
 
 
24,679

 
3,860

 
228

 
258

 
29,025

IFRS 16 adoption (3)
 
 
79

 
62

 
—

 
4

 
145

Additions
 
 
172

 
42

 
—

 
4

 
218

Disposals
4
 
—

 
(440
)
 
—

 
—

 
(440
)
Acquisitions through business combinations
3
 
—

 
550

 
—

 
—

 
550

Items recognized through OCI:
 
 
 
 
 
 
 
 
 
 


Change in fair value
 
 
1,521

 
460

 
(7
)
 
(3
)
 
1,971

Foreign exchange
 
 
108

 
(29
)
 
(10
)
 
(8
)
 
61

Items recognized through net income:
 
 
 
 
 
 
 
 
 
 


Change in fair value
 
 
(15
)
 
(1
)
 
(1
)
 
(1
)
 
(18
)
Depreciation
 
 
(520
)
 
(246
)
 
(13
)
 
(19
)
 
(798
)
As at December 31, 2019(4)
 
 
$
26,024

 
$
4,258

 
$
197

 
$
235

 
$
30,714

(1) 
Includes biomass and cogeneration.
(2) 
Includes intangible assets of $10 million (2018: $11 million) and assets under construction of $334 million (2018: $388 million).  
(3) 
On January 1, 2019 Brookfield Renewable adopted IFRS 16. See Note 1 - Basis of preparation and significant accounting policies for additional details regarding the impact of the new accounting standard adoption.
(4) 
Includes right-of-use assets not subject to revaluation of $71 million in our hydroelectric segment, $51 million in our wind segment and $3 million in our other segment.
The fair value of Brookfield Renewable’s property, plant and equipment is calculated as described in Notes 1(h) – Property, plant and equipment and revaluation method and 1(q)(i) – Critical estimates – Property, plant and equipment. Judgment is involved in determining the appropriate estimates and assumptions in the valuation of Brookfield Renewable’s property, plant and equipment. See Note 1(r)(iii) - Critical judgments in applying accounting policies – Property, plant and equipment. Brookfield Renewable has classified its property, plant and equipment under level 3 of the fair value hierarchy. 
Brookfield Renewable has a purchase option that can be exercised in November 2020, subject to consent from its third-party investment partners, to acquire the 192 MW hydroelectric facility in Louisiana that it currently operates under a lease arrangement, for total consideration of $560 million.
Discount rates, terminal capitalization rates and exit dates used in the valuation methodology are provided in the following table:
 
North America
 
Colombia
 
Brazil
 
Europe
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Discount rate(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contracted
4.6% - 5.1%
 
4.8% - 5.3%
 
9.0
%
 
9.6
%
 
8.2
%
 
9.0
%
 
3.5
%
 
4.0% - 4.3%
Uncontracted
6.2% - 6.7%
 
6.4% - 6.9%
 
10.3
%
 
10.9
%
 
9.5
%
 
10.3
%
 
5.3
%
 
5.8% - 6.1%
Terminal capitalization rate(2)
6.2% - 6.7%
 
6.1% - 6.8%
 
9.8
%
 
10.4
%
 
N/A

 
N/A

 
N/A

 
N/A
Exit date
2039
 
2038
 
2039

 
2038

 
2047

 
2047

 
2034

 
2033
(1) 
Discount rates are not adjusted for asset specific risks.
(2) 
The terminal capitalization rate applies only to hydroelectric assets in the United States, Canada and Colombia.
The following table summarizes the impact of a change in discount rates, electricity prices and terminal capitalization rates on the fair value of property, plant and equipment:
 
2019
(MILLIONS)
North America

 
Colombia

 
Brazil

 
Europe

 
Total

25 bps increase in discount rates
$
(870
)
 
$
(190
)
 
$
(90
)
 
$
(10
)
 
$
(1,160
)
25 bps decrease in discount rates
940

 
250

 
70

 
10

 
1,270

5% increase in future energy prices
820

 
400

 
80

 
10

 
1,310

5% decrease in future energy prices
(820
)
 
(400
)
 
(80
)
 
(10
)
 
(1,310
)
25 bps increase in terminal capitalization rate(1)
(210
)
 
(40
)
 
—

 
—

 
(250
)
25 bps decrease in terminal capitalization rate(1)
220

 
40

 
—

 
—

 
260

 
2018
(MILLIONS)
North America

 
Colombia

 
Brazil

 
Europe

 
Total

25 bps increase in discount rates
$
(770
)
 
$
(180
)
 
$
(80
)
 
$
(20
)
 
$
(1,050
)
25 bps decrease in discount rates
840

 
190

 
80

 
20

 
1,130

5% increase in future energy prices
800

 
440

 
100

 
20

 
1,360

5% decrease in future energy prices
(800
)
 
(440
)
 
(100
)
 
(20
)
 
(1,360
)
25 bps increase in terminal capitalization rate(1)
(210
)
 
(30
)
 
—

 
—

 
(240
)
25 bps decrease in terminal capitalization rate(1)
230

 
30

 
—

 
—

 
260

(1) 
The terminal capitalization rate applies only to hydroelectric assets in the United States, Canada and Colombia.
Terminal values are included in the valuation of hydroelectric assets in the United States, Canada and Colombia. For the hydroelectric assets in Brazil, cash flows have been included based on the duration of the authorization or useful life of a concession asset plus a one-time 30-year renewal term for the majority of the hydroelectric assets. The weighted-average remaining duration of the authorization or useful life of a concession asset at December 31, 2019, including a one-time 30-year renewal for applicable hydroelectric assets, is 32 years (2018: 33 years). Consequently, there is no terminal value attributed to the hydroelectric assets in Brazil at the end of the authorization term.
The following table summarizes the percentage of total generation contracted under power purchase agreements as at December 31, 2019:
 
North America

 
Colombia

 
Brazil

 
Europe

1 - 10 years
54
%
 
25
%
 
68
%
 
71
%
11 - 20 years
30
%
 
0
%
 
33
%
 
13
%

The following table summarizes average power prices from long-term power purchase agreements that are linked specifically to the related power generating assets:
Per MWh(1)
North America

 
Colombia
 
 
Brazil

 
Europe

1 - 10 years
$
87

 
COP
217,000

 
R$
295

 
€
82

11 - 20 years
77

 
 
272,000

 
407

 
102

(1) 
Assumes nominal prices based on weighted-average generation.
The following table summarizes the estimates of future electricity prices:
Per MWh(1)
North America

 
Colombia
 
 
Brazil

 
Europe

1 - 10 years
$
66

 
COP
257,000

 
R$
273

 
€
75

11 - 20 years
132

 
 
358,000

 
411

 
84

(1) 
Assumes nominal prices based on weighted-average generation.
Brookfield Renewable’s long-term view is anchored to the cost of securing new energy from renewable sources to meet future demand growth between 2023 and 2035. A further one year change would increase or decrease the fair value of property, plant and equipment by approximately $200 million (2018: $150 million). 
Had Brookfield Renewable’s revalued property, plant and equipment been measured on a historical cost basis, the carrying amounts, net of accumulated depreciation would have been as follows at December 31:
(MILLIONS)
2019

 
2018

Hydroelectric
$
11,816

 
$
11,888

Wind
2,705

 
2,753

Solar
138

 
260

Other(1)
234

 
246

 
$
14,893

 
$
15,147

(1) 
Includes biomass and cogeneration.