We had an excellent second quarter with a 24% increase in adjusted earnings per share from the second quarter of 2020 and a record 1.8 gigawatts of renewables under long-term contracts added to our backlog bringing our total to 8.5 gigawatt.
We remain on track to achieve 7% to 9% average annual growth in adjusted earnings per share and parent-free cash flow through 2025.
As you may recall, during our Investor Day in March, we outlined our plan to invest $2.3 billion to transform our two U.S. Utilities, AES Ohio and AES Indiana.
Starting with AES Ohio on slide 5 where we expect to nearly double the rate base by growing 12% annually through 2025.
Now, moving on to AES Indiana on slide 6 where we're investing $1.5 billion over the next five years as part of our grid modernization program and our transition to more renewables-based generation.
We recently received regulatory approval for our 195 megawatt Hardy Hills Solar Project.
And we announced an agreement to acquire the Petersburg Solar Project, which includes 250 megawatts of solar and a 100 megawatt hours of energy storage.
We expect to grow the rate base at AES Indiana by more than 7% annually.
Now, turning to the second theme of renewables growth on slide 7; last year was a record-breaking year of renewable contracts for us with over 3 gigawatt signed.
So far this year, we have already signed almost 3 gigawatt of contracts for wind, solar, and energy storage nearly double the amount at the same time last year.
More than 90% of the new contracts are in the U.S. and we are well on our way toward achieving or exceeding our target of 4 gigawatts for 2021.
At the same time, more than 80% are with C&I customers negotiated on a bilateral basis.
Our progress so far this year includes our recent agreement to acquire 612 megawatts of operating wind assets in New York as shown on slide 8.
This year we announced the world's first ever large scale 24/7 carbon-free energy netted on an hourly basis supplying Google's Virginia data centers.
We have since replicated similar structures with other large-scale customers helping them to achieve their sustainability targets while supporting our renewables growth goals or a total of 1.5 gigawatts of these Clean Energy products signed or awarded thus far this year.
Turning to slide 10, with nearly 3 gigawatts of renewables and energy storage projects added this year we now have a backlog of 8.5 gigawatt including 2.5 gigawatts currently under construction.
We expect to bring 1.4 gigawatts online during the remainder of 2021.
The strength of our U.S. renewables growth in the rapidly expanding market will support achieving our goal of having 50% of our earnings from renewables and utilities and 50% of our earnings from the U.S. by 2025.
As you can see on slide 11, we now have a pipeline of 37 gigawatts, among the largest in the world.
More than 60% of this pipeline is in the U.S. including 8 gigawatts in the hottest market in the country, California.
Now to decarbonization on slide 12; last month, AES Andes announced that 1.1 gigawatts of coal-fired generation would be voluntarily retired as soon as January 2025 and will be replaced with 2.3 gigawatt of newly contracted renewable.
Since 2017, we have announced the sale or retirement of almost 12 gigawatts of coal-fired generation, which is among the largest programs of any American company.
I am pleased to report that these exits along with our substantial renewable additions reduce our generation from coal to approximately 20% of total generation on a pro forma basis, an additional reduction of 5 percentage points since last quarter.
With 90% of the equipment needed for our 8.5 gigawatt backlog already secured, we feel very comfortable in our ability to execute on our strong pipeline over the short- and medium-term.
For example, we have benefited significantly from our Energy Storage business, which we started over 10 years ago and which now is one of the largest in the industry.
Specifically, the award was for the AES Alamitos Battery Energy Storage System consisting of 400 megawatt hours of energy storage that can supply power to tens of thousands of homes in milliseconds.
Turning to slide 15, similarly, we continue to benefit from our investment in Uplight, which provide cloud-based energy efficiency solutions to more than a 110 million households and businesses through its numerous utility customers, including AES Ohio in AES Indiana.
In July, we closed the previously announced transaction with Schneider Electric and a group of investors that valued Uplight at $1.5 billion.
Not only are we well-positioned to achieve all of our financial goals but we are on track to hit our transformational targets of more than 50% of our earnings from renewables and utilities and more than 50% from the U.S. while having less than 10% of our generation from coal by 2025.
Turning to our financial results for the second quarter on slide 17; adjusted earnings per share was up 24% to $0.31, primarily reflecting execution on our growth plan, demand recovery at our U.S. Utilities and parent interest savings.
Turning to slide 18, adjusted pre-tax contribution or PTC was $303 million for the quarter, an increase of $65 million versus the second quarter of 2020.
In the U.S. & Utilities Strategic Business Unit or SBU, PTC was up $71 million driven primarily by the demand recovery at our utilities, higher contributions from about 1 gigawatt of new renewable assets, and the commencement of Power Purchase Agreements or PPAs at Southland Energy in California.
For Q2 on a weather-normalized basis demand at AES Ohio is up 9% and demand at AES Indiana is up 4%.
Separately, in California, our 2.3 gigawatt Southland legacy units are well-positioned to contribute to the State's pressing energy needs and its transition to a more sustainable carbon free future.
In fact, the State Water Board is considering the California Energy Agencies' recommendation for our 876 megawatt Redondo Beach facility to be extended for two years through 2023 to align with our remaining legacy units.
Turning to slide 24; with our first half results we are on track to achieve our full year 2021 adjusted earnings per share guidance of $1.50 to $1.58.
As we have discussed in the past, our typical quarterly earnings profile was more back-end weighted with roughly 40% of earnings occurring in the first half of the year.
Growth in the year-to-go will be primarily driven by 1.4 gigawatts of new renewables assets coming online in the remainder of the year, continued demand recovery across our markets, reduced interest expense and cost savings benefits.
We are also reaffirming our expected 7% to 9% average annual growth target through 2025.
We expect the positive momentum in these metrics to continue enabling us to reach BBB ratios by 2025.
Now to our 2021 parent capital allocation plan on slide 26; consistent with our prior disclosures, sources shown on the left hand side of this slide reflect approximately $2 billion of total discretionary cash.
This includes $800 million of parent-free cash flow, $100 million of proceeds received from the sale of Itabo in the Dominican Republic, and the successful issuance of the $1 billion of equity units in March.
Now to uses on the right hand side, we'll be returning $450 million to shareholders this year consistent of our common share dividend and the coupon of the equity units.
And we plan to invest approximately $1.4 to $1.5 billion in our subsidiaries, as we capitalize on attractive opportunities for growth.
Approximately 60% of these investments are in global renewables reflecting our success in originations during 2020 and our expectations for 2021.
And about 25% of these investments are in our U.S. Utilities to fund rate based growth with a continued focus on grid and fleet modernization.
In the first half of the year, we invested approximately $700 million primarily in renewables, which is roughly 50% of our expected investments for the year.
We have the most innovative new products and an 8.5 gigawatt backlog and a 37 gigawatt pipeline of projects.
All-in-all we are enthusiastic about our future and we feel confident about delivering on our 7% to 9% average annual growth rate.

Summary:
Turning to our financial results for the second quarter on slide 17; adjusted earnings per share was up 24% to $0.31, primarily reflecting execution on our growth plan, demand recovery at our U.S. Utilities and parent interest savings.
Turning to slide 24; with our first half results we are on track to achieve our full year 2021 adjusted earnings per share guidance of $1.50 to $1.58.
We expect the positive momentum in these metrics to continue enabling us to reach BBB ratios by 2025.