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## Renewable Energy 

Renewable energy PP&E increased slightly to $16.6 billion during 2013. Acquisition and development activity added $1.6 billion of assets during the year (2012 – $1.5 billion), which was offset by $551 million of depreciation, a $150 million fair value reduction and a decrease of $798 million due to the impact of lower currency exchange rates on our Brazilian and Canadian operations. 

We acquired additional hydroelectric facilities in Tennessee, New England and Brazil and completed the development of wind energy facilities in Brazil. We also acquired the remaining 50% of a joint venture and commenced consolidating the PP&E within the venture, which was previously included in investments. 

In 2012 we acquired nearly 1,000 megawatts of renewable power facilities capacity through our institutional funds including two large-scale hydroelectric portfolios valued at $1.4 billion. 

We discuss fair value changes on pages 25 and 26. 

The key valuation metrics of our hydro and wind generating facilities at the end of 2013 and 2012 are summarized below. The valuations are impacted primarily by the discount rate and long-term power prices. Discount rates are based on our after-tax cost of capital and are adjusted to reflect whether revenues are subject to long-term contracts or spot market pricing. Projected cash flows are based on in-place contracts and expected market prices for non-contracted power. Forward market prices are used for the first four years, during which time there is adequate liquidity to permit appropriate price discovery, and thereafter prices are determined using internal projections that reflect our view of future market capacity, cost of capital, costs of fuel for competing forms of generation and competitive attributes of renewable energy. A 100 basis-point change in the discount and terminal capitalization rates and a 5% change in long-term power prices will impact the value of our common equity by $1.8 billion and $0.5 billion, respectively. 

<img src='content_image/289717.jpg'>

Our generation facilities in Brazil are held under concessions and authorizations which have a fixed maturity date and accordingly, we do not ascribe a terminal value to these assets under IFRS, although we believe that we will be able to renew these concessions upon maturity. 

## Infrastructure 

Infrastructure PP&E decreased slightly to $8.6 billion during 2013. During the year we sold our Pacific Northwest timberlands and the associated production assets which reduced PP&E by $654 million after having increased by $3.4 billion during 2012. Fair value changes increased the carrying values by $691 million during 2013 (2012 – $707 million), as discussed on pages 25 and 26. During 2012 we completed the acquisition of a UK regulated distribution business and a Chilean toll road which contributed towards a $3.5 billion increase in PP&E. The decline in the exchange rates for the Australian and Brazilian currency contributed to a $456 million decrease due to foreign currency translation. 

We revalue our infrastructure assets on an annual basis using discounted cash flow models, which includes estimates of forecasted revenues, operating costs, maintenance and other capital expenditures. Discount rates are selected for each asset giving consideration to the assets revenue streams and geography where they are located. 

The key valuation metrics of our utilities, transport and energy operations are summarized below: 

<img src='content_image/289716.jpg'>

