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RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Tables)
 12 Months Ended
Dec. 31, 2019
RISK MANAGEMENT AND FINANCIAL INSTRUMENTS [Abstract]  
Summary of financial instruments that Brookfield Renewable
Impact of a 1% change in interest rates, on outstanding interest rate swaps and variable rate debt, for the year ended December 31:
 
Effect on net income(1)
 
Effect on OCI(1)
(MILLIONS)
2019

 
2018

 
2017

 
2019

 
2018

 
2017

1% increase
$
34

 
$
(10
)
 
$
17

 
$
17

 
$
42

 
$
54

1% decrease
(34
)
 
11

 
(17
)
 
(17
)
 
(42
)
 
(54
)
(1) 
Amounts represent the potential annual net pretax impact.
Impact of a 5% change in U.S. dollar exchange rates, on outstanding foreign exchange swaps, for the year ended December 31:
 
Effect on net income(1)
 
Effect on OCI(1)
(MILLIONS)
2019

 
2018

 
2017

 
2019

 
2018

 
2017

5% increase
$
20

 
$
30

 
$
4

 
$
32

 
$
44

 
$
79

5% decrease
(24
)
 
(30
)
 
(4
)
 
(32
)
 
(44
)
 
(79
)
(1) 
Amounts represent the potential annual net pretax impact.
The maximum credit exposure at December 31 was as follows:
(MILLIONS)
2019

 
2018

Trade receivables and other short-term receivables
$
548

 
$
448

Due from related parties
60

 
65

Contract asset
473

 
447

 
$
1,081

 
$
960

Impact of a 5% change in the market price of electricity, on outstanding energy derivative contracts, for the year ended December 31:
 
Effect on net income(1)
 
Effect on OCI(1)
(MILLIONS)
2019

 
2018

 
2017

 
2019

 
2018

 
2017

5% increase
$
(7
)
 
$
(3
)
 
$
(3
)
 
$
(7
)
 
$
(10
)
 
$
(4
)
5% decrease
7

 
3

 
3

 
7

 
10

 
4


(1) 
Amounts represent the potential annual net pretax impact.
Summary to classifies the cash obligations related to Brookfield Renewables liabilities into relevant maturity groupings based on the remaining period from the statement of financial position dates to the contractual maturity date
The table below classifies the cash obligations related to Brookfield Renewable’s liabilities into relevant maturity groupings based on the remaining period from the statement of financial position dates to the contractual maturity date. As the amounts are the contractual undiscounted cash flows (gross of unamortized financing fees and accumulated amortization, where applicable), they may not agree with the amounts disclosed in the consolidated statements of financial position.
AS AT DECEMBER 31, 2019
(MILLIONS)
< 1 year

 
2-5 years

 
> 5 years

 
Total

Accounts payable and accrued liabilities
$
590

 
$
—

 
$
—

 
$
590

Financial instrument liabilities(1)
139

 
30

 
9

 
178

Due to related parties
127

 
—

 
—

 
127

Other long-term liabilities – concession payments
1

 
4

 
9

 
14

Lease liabilities
24

 
68

 
100

 
192

Corporate borrowings(1)
—

 
607

 
1,500

 
2,107

Non-recourse borrowings(1)
685

 
2,681

 
5,598

 
8,964

Interest payable on borrowings(2)
597

 
1,990

 
2,087

 
4,674

Total
$
2,163

 
$
5,380

 
$
9,303

 
$
16,846

 
 
 
 
 
 
 
 
AS AT DECEMBER 31, 2018
(MILLIONS)
< 1 year

 
2-5 years

 
> 5 years

 
Total

Accounts payable and accrued liabilities
$
533

 
$
—

 
$
—

 
$
533

Financial instrument liabilities(1)
27

 
57

 
54

 
138

Due to related parties
101

 
—

 
—

 
101

Other long-term liabilities – concession payments
1

 
4

 
10

 
15

Corporate borrowings(1)
6

 
1,344

 
990

 
2,340

Non-recourse borrowings(1)
489

 
2,806

 
5,164

 
8,459

Interest payable on borrowings(2)
577

 
1,906

 
1,684

 
4,167

Total
$
1,734

 
$
6,117

 
$
7,902

 
$
15,753

(1) 
Includes both the current and long-term amounts.
(2) 
Represents aggregate interest payable expected to be paid over the entire term of the obligations, if held to maturity. Variable rate interest payments have been calculations based on estimated interest rates.
Summary of Brookfield Renewables assets and liabilities measured and disclosed at fair value classified by the fair value hierarchy
The following table presents Brookfield Renewable’s assets and liabilities measured and disclosed at fair value classified by the fair value hierarchy as at December 31:
(MILLIONS)
Level 1

 
Level 2

 
Level 3

 
2019

 
2018

Assets measured at fair value:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
115

 
$
—

 
$
—

 
$
115

 
$
173

Restricted cash(1)
173

 
—

 
—

 
173

 
181

Financial instrument assets(2)
 
 
 
 
 
 
 
 
 
Energy derivative contracts
—

 
53

 
23

 
76

 
3

Interest rate swaps
—

 
—

 
—

 
—

 
9

Foreign exchange swaps
—

 
4

 
—

 
4

 
55

Investments in equity securities
25

 
87

 
48

 
160

 
117

Property, plant and equipment
—

 
—

 
30,714

 
30,714

 
29,025

Liabilities measured at fair value:
 
 
 
 
 
 
 
 
 
Financial instrument liabilities(2)
 
 
 
 
 
 
 
 
 
Energy derivative contracts
—

 
(8
)
 
—

 
(8
)
 
(22
)
Interest rate swaps
—

 
(131
)
 
—

 
(131
)
 
(116
)
Foreign exchange swaps
—

 
(39
)
 
—

 
(39
)
 
—

Contingent consideration(3)
—

 
—

 
(11
)
 
(11
)
 
(3
)
Assets for which fair value is disclosed:
 
 
 
 
 
 
 
 
 
Equity-accounted investments(4)
1,010

 
—

 
—

 
1,010

 
703

Liabilities for which fair value is disclosed:
 
 
 
 
 
 
 
 
 
Corporate borrowings
(1,905
)
 
(299
)
 
—

 
(2,204
)
 
(2,367
)
Non-recourse borrowings
(416
)
 
(9,157
)
 
—

 
(9,573
)
 
(8,696
)
Total
$
(998
)
 
$
(9,490
)
 
$
30,774

 
$
20,286

 
$
19,062

(1) 
Includes both the current amount and long-term amount included in Other long-term assets.
(2) 
Includes both current and long-term amounts.
(3) 
Amount relates to business combinations with obligations lapsing between 2020 and 2024.
(4) 
The fair value corresponds to Brookfield Renewable’s investment in publicly-quoted common shares of TerraForm Power, Inc.
Summary of Brookfield Renewables net financial instrument positions
The aggregate amount of Brookfield Renewable’s net financial instrument positions as at December 31 are as follows:
 
 
 
2019
 
 
 
2018

(MILLIONS)
Assets

 
Liabilities

 
Net Assets
(Liabilities)

 
Net Assets
(Liabilities)

Energy derivative contracts
$
76

 
$
8

 
$
68

 
$
(19
)
Interest rate swaps
—

 
131

 
(131
)
 
(107
)
Foreign exchange swaps
4

 
39

 
(35
)
 
55

Investments in equity securities
160

 
—

 
160

 
117

Total
240

 
178

 
62

 
46

Less: current portion
75

 
139

 
(64
)
 
33

Long-term portion
$
165

 
$
39

 
$
126

 
$
13
Summary of Brookfield Renewables total net financial instrument asset
The following table presents the change in Brookfield Renewable’s total net financial instrument asset position as at and for the year ended December 31:
(MILLIONS)
Note
 
2019

 
2018

 
2017

Balance, beginning of year
 
 
$
46

 
$
(85
)
 
$
(28
)
Increases (decreases) in the net financial instrument liability position:
 
 
 
 
 
 
 
Unrealized (loss) gain through OCI on investments in equity securities
(a)
 
35

 
(16
)
 
(20
)
Unrealized (loss) through income on energy derivative contracts
(b)
 
15

 
(3
)
 
(5
)
Unrealized (loss) through OCI on energy derivative contracts
(b)
 
38

 
—

 
(17
)
Unrealized gain (loss) through income on interest rate swaps
(c)
 
(22
)
 
17

 
1

Unrealized gain (loss) through OCI on interest rate swaps
(c)
 
(2
)
 
14

 
18

Unrealized gain (loss) through income on foreign exchange swaps
(d)
 
(23
)
 
76

 
(29
)
Unrealized gain (loss) through OCI on foreign exchange swaps
(d)
 
—

 
87

 
(94
)
Acquisitions, settlements and other
 
 
(25
)
 
(44
)
 
89

Balance, end of year
 
 
$
62

 
$
46

 
$
(85
)
 
 
 
 
 
 
 
 
Financial instrument assets designated at fair value through OCI
 
 
 
 
 
 
 
Investments in equity securities
(a)
 
$
160

 
$
117

 
$
159

 
 
 
 
 
 
 
 
Derivative assets not designated as hedging instruments:
 
 
 
 
 
 
 
Energy derivative contracts
(b)
 
$
53

 
$
3

 
$
—

Interest rate swaps
(c)
 
—

 
—

 
1

Foreign exchange swaps
(d)
 
4

 
32

 
19

Net positions
 
 
$
57

 
$
35

 
$
20

 
 
 
 
 
 
 
 
Derivative assets designated as hedging instruments:
 
 
 
 
 
 
 
Energy derivative contracts
(b)
 
$
23

 
$
—

 
$
—

Interest rate swaps
(c)
 
—

 
9

 
5

Foreign exchange swaps
(d)
 
—

 
23

 
1

Net positions
 
 
$
23

 
$
32

 
$
6

 
 
 
 
 
 
 
 
Derivative liabilities not designated as hedging instruments:
 
 
 
 
 
 
 
Energy derivative contracts
(b)
 
$
(8
)
 
$
(7
)
 
$
(5
)
Interest rate swaps
(c)
 
(123
)
 
(82
)
 
(107
)
Foreign exchange swaps
(d)
 
(17
)
 
—

 
(33
)
Net positions
 
 
$
(148
)
 
$
(89
)
 
$
(145
)
 
 
 
 
 
 
 
 
Derivative liabilities designated as hedging instruments:
 
 
 
 
 
 
 
Energy derivative contracts
(b)
 
$
—

 
$
(15
)
 
$
(14
)
Interest rate swaps
(c)
 
(8
)
 
(34
)
 
(48
)
Foreign exchange swaps
(d)
 
(22
)
 
—

 
(63
)
Net positions
 
 
$
(30
)
 
$
(49
)
 
$
(125
)
 
 
 
 
 
 
 
 
Total financial instruments, net
 
 
$
62

 
$
46

 
$
(85
)
Summary of derivative contracts designated as hedging instruments
The following table summarizes the interest rate hedges designated as hedging instruments:
Interest rate hedges
December 31, 2019

 
December 31, 2018

Carrying amount (asset/(liability))
(8
)
 
(25
)
Notional amount - $
124

 
178

Notional amount - C$(1)
227

 
151

Notional amount - €(1)
—

 
377

Notional amount - £(1)
—

 
99

Notional amount - COP(1)
227

 
256

Maturity dates
2021 - 2034

 
2019 - 2036

Hedge ratio
1:1

 
1:1

Change in discounted spot value of outstanding hedging instruments
(8
)
 
8

Change in value of hedged item used to determine hedge effectiveness
10

 
(2
)

(1) 
Notional amounts of foreign currency denominated interest rate hedges are presented at the U.S. dollar equivalent value based on the December 31, 2019 foreign currency spot rate
The following table summarizes the foreign exchange swaps designated as hedging instruments:
Foreign exchange swaps
December 31, 2019

 
December 31, 2018

Carrying amount (asset/(liability))
(22
)
 
23

Notional amount for hedges of the Canadian dollar(1)
—

 
419

Notional amount for hedges of the Euro(1)
146

 
221

Notional amount for hedges of the British pounds sterling(1)
170

 
247

Notional amount for hedges of the Chinese yuan(1)
195

 
—

Notional amount for hedges of other currencies(1)
101

 
—

Maturity date
2020 - 2021

 
2019

Hedge ratio
1:1

 
1:1

Weighted average hedged rate for the year:
 
 
 
C$/$ foreign exchange forward contracts
—

 
1.34

€/$ foreign exchange forward contracts
0.90

 
0.82

£/$ foreign exchange forward contracts
0.82

 
0.76

CNY/$ foreign exchange forward contracts
7.22

 
—


(1) 
Notional amounts expressed in millions of U.S. dollars
The following table summarizes the energy derivative contracts designated as hedging instruments:
Energy derivative contracts
December 31, 2019

 
December 31, 2018

Carrying amount (asset/(liability))
23

 
(15
)
Notional amount - millions of U.S. dollars
175

 
188

Notional amount - GWh
4,650

 
5,024

Weighted average hedged rate for the year ($/MWh)
38

 
37

Maturity dates
2020 - 2022

 
2019 - 2020

Hedge ratio
1:1

 
1:1

Change in discounted spot value of outstanding hedging instruments
29

 
(8
)
Change in value of hedged item used to determine hedge effectiveness
(29
)
 
9

The following table presents a reconciliation of the LP unitholder equity reserves impacted by financial instruments:
(MILLIONS)
Cash flow
hedges

 
Investments
in equity
securities

 
Foreign
currency
translation

Balance, as at December 31, 2017
$
(29
)
 
$
15

 
$
(378
)
Effective portion of changes in fair value arising from:
 
 
 
 
 
Energy derivative contracts
(1
)
 
—

 
—

Interest rate swaps
1

 
—

 
—

Foreign exchange swaps
—

 
—

 
42

Amount reclassified to profit or loss
7

 
—

 
—

Foreign currency revaluation of designated borrowings
—

 
—

 
87

Foreign currency revaluation of net foreign operations
—

 
—

 
(324
)
Valuation of investments in equity securities designated FVOCI
—

 
(8
)
 
—

Tax effect
(2
)
 
—

 
(10
)
Other
(10
)
 
(3
)
 
(69
)
Balance, as at December 31, 2018
$
(34
)
 
$
4

 
$
(652
)
Effective portion of changes in fair value arising from:
 
 
 
 
 
Interest rate swaps
(1
)
 
—

 
—

Amount reclassified to profit or loss
2

 
—

 
—

Foreign currency revaluation of designated borrowings
—

 
—

 
(49
)
Foreign currency revaluation of net foreign operations
—

 
—

 
14

Valuation of investments in equity securities designated FVOCI
—

 
19

 
—

Other
1

 
(11
)
 
(13
)
Balance, as at December 31, 2019
$
(32
)
 
$
12

 
$
(700
)