The Renewables SBU added 4.9 GW to its contracted backlog during 2023, including 1.2 GW with large technology companies. Demand from data centers in the U.S. is expected to nearly double in the next three years.

The company signed long-term contracts for 5.6 GW of renewables and completed the construction of 3.5 GW. The backlog now consists of 5.1 GW under construction and 7.2 GW with signed PPAs.

The company was awarded up to $2.4 billion of grant funding by the U.S. Department of Energy for two green hydrogen hubs with AES participation. The company is partnering with Air Products to develop the largest green hydrogen production facility in the United States.

AES Indiana reached a unanimous settlement agreement for its first rate case since 2018, and expects to receive approval from the IURC by the middle of 2024. This demonstrates progress in regulatory relationships.

The company exited or announced the sale or closure of 2.1 GW of coal generation in Vietnam, the U.S., and Chile. This demonstrates progress in transitioning to lower carbon forms of energy.

The company secured $1.1 billion in asset sale proceeds, to accelerate its portfolio transformation, outpacing its target of $400 to $600 million. This demonstrates effective capital allocation and execution of strategic goals.

The economic climate, particularly the state of the economy in the areas in which we operate, which impacts demand for electricity in many of our key markets, including the fact that the global economy faces considerable uncertainty for the foreseeable future, which further increases many of the risks discussed in this Form 10-K.

Variations in weather, especially mild winters and cooler summers in the areas in which we operate, the occurrence of difficult hydrological conditions for our hydropower plants, as well as hurricanes and other storms and disasters, wildfires and low levels of wind or sunlight for our wind and solar facilities.

Cyber-attacks and information security breaches pose a risk to the company's operations and financial results. The company's business relies on electronic systems and network technologies to operate its generation, distribution and transmission facilities.

The company has been consistently rated by Bloomberg New Energy Finance as one of the top two largest sellers globally of renewable power to corporate customers, with a focus on large technology/data center providers.

Our generation fleet is diversified by technologies and fuel type. This diversification allows the company to better manage risks associated with fuel costs and availability, as well as seasonality and weather variations.

Our distribution business in El Salvador faces limited competition due to significant barriers to enter the market. AES Indiana and AES Ohio each operate as the sole distributors of electricity within their respective jurisdictions.

For all generation businesses, managing fixed costs and reducing them over time is a driver of business performance. In our businesses with long-term contracts, the majority of the fixed O&M costs are recovered through the capacity payment or were otherwise factored in as a component of the long-term contract price.

Our contract and short-term sales provide incentives to our generation plants to optimally manage availability, operating efficiency and flexibility. Capacity payments under contract sales are frequently tied to meeting minimum standards.

The regulated tariff generally recognizes that our utility businesses should recover certain operating and fixed costs, as well as manage uncollectible amounts, quality of service and technical and non-technical losses. Utilities, therefore, need to manage costs to the levels reflected in the tariff, or risk non-recovery of costs or diminished returns.

At the core of our innovation strategy is AES Next, our business and technology incubator. AES Next works to identify new and innovative technologies and business opportunities that provide or support leading-edge greener energy solutions.

We are a leader in developing green hydrogen. We are partnering with Air Products to develop, build, own, and operate the largest green hydrogen production facility in the United States. We are also participating in two green hydrogen hubs in the United States, which were awarded up to $2.4 billion of grant funding from the U.S. Department of Energy.

Our New Energy Technologies SBU includes investments in new and innovative technologies to support leading-edge greener energy solutions. It includes investments in Fluence, Uplight, and 5B.

AES Indiana expects to spend an estimated $3.2 billion on capital projects from 2024 through 2026, which includes AES Indiana's power generation and renewable energy projects discussed above, spending under AES Indiana's TDSIC Plan, as well as other new transmission and distribution projects.

AES Ohio is projecting to spend an estimated $1.2 billion on capital projects from 2024 through 2026, which includes expected spending under AES Ohio's Smart Grid Phase 1 included in the Stipulation and Recommendation entered into in October 2020 as well as other new transmission and distribution projects.

For our generation businesses, our priority for development is in key growth markets, where we can leverage our global scale and synergies with our existing businesses by adding renewable energy.

At AES Indiana, for example, we are working to retire its remaining coal generation by the end of 2025, while adding new renewables and natural gas to the grid.

As part of this commitment, AES Colombia is developing a pipeline of 1.3 GW of solar and wind projects. Six wind projects totaling 1,149 MW are located in La Guajira, one of the windiest spots in the world.

The Chilean government's decarbonization plan includes the complete retirement of the SEN coal fleet by the end of 2040 and carbon neutrality by 2050. AES Andes continues to work under the Green Blend strategy to accelerate the phase-out of the remaining coal-fired units.

Specifically, demand from data centers in the U.S. is expected to nearly double in the next three years as generative artificial intelligence use-cases expand. Our well-established relationships with these customers, combined with our proven track record of delivering our projects, positions us well to take advantage of this opportunity.

As states, communities, and organizations of all types make commitments and plan to reduce their carbon footprints, renewables are the fastest-growing source of electricity generation in the U.S. AES Clean Energy works with its customers to co-create and deliver the smarter, greener energy solutions that meet their needs, including 24/7 carbon-free energy.

The electricity market in Brazil is highly dependent on hydroelectric generation, therefore electricity pricing is driven by hydrology. AES Brasil owns 12 hydroelectric power plants in the state of São Paulo, which represents approximately 2% of the hydropower physical guarantee of the hydrological risk sharing system.