AES's 2025 Q2 Earnings Call: Unpacking Contradictions in Renewable Projects, Safe Harbor Protections, and Strategic Sales

Renewable Energy Growth:
- AES reported a 56% increase in adjusted EBITDA in the renewables segment for Q2 2025, with renewables adjusted EBITDA reaching $240 million.
- This growth was driven by the addition of 3.2 gigawatts of new projects over the past four quarters and achieving higher returns from these projects.

Strong U.S. Utility Investment:
- The company is investing approximately $1.4 billion across AES Indiana and AES Ohio to improve customer reliability and support economic development in 2025.
- This investment focuses on hardening the distribution network, smart grid, and new generation, including the completion of major projects such as the Pike County energy storage project.

Customer Demand and PPA Backlog:
- AES signed 1.6 gigawatts of new PPAs in the quarter, bringing the backlog to 12 gigawatts, with 1.6 gigawatts attributed to data center customers.
- The strong demand from data centers, particularly from Meta, contributes to a robust PPA market driven by the rapid growth of data centers and the need for additional power.

Financial Resilience Amidst Policy Uncertainty:
- AES' business was resilient despite recent policy changes, with significant protections due to safe harboring and U.S. supply chain strategies.
- This resilience is attributed to the company's strategic positioning with a major component of its backlog consisting of international projects unaffected by U.S. policy changes.