The world’s largest investor Blackrock will create a $2 billion fund that will allow institutional investors to profit from New Zealand’s transition to 100% renewable energy.
Prime Minister Chris Hipkins, Energy Minister Megan Woods, and representatives of Blackrock announced the new fund in Auckland on Tuesday morning.
The fund has been established on behalf of institutional clients, including the New Zealand Government, to invest in solar, wind, green hydrogen and battery storage needed in a low-carbon economy.
Blackrock has been establishing similar funds around the world to take advantage of the huge amounts of investment required to move away from fossil fuels.
For example, it said last month it hoped to raise up to US$7 billion for its fourth Global Renewable Power Fund which would invest across OECD countries.
The NZ fund will be the first such fund specific to one single country. Blackrock’s various other climate focused funds usually have broader geographic targets.
In a press release, Blackrock said it would make investments in wind, solar, batteries, electricity storage, electric vehicle charging, natural capital projects, green hydrogen, and the associated enabling infrastructure.
It will require an investment of $42 billion—spent on generation, distribution, and batteries—to take New Zealand from 83% to 100% renewable electricity.
For comparison, the entire KiwiSaver scheme holds about $97 billion worth of assets and the NZ Super Fund another $55 billion.
The Infrastructure Commission estimates there is about $4.7 billion of committed clean energy projects already in the pipeline.
Woods said investors had recognised the Government’s commitment to its climate goals, through decisions such as banning offshore oil and gas exploration.
“New Zealand is now an investment magnet for capital that will unlock technology such as battery storage, wind and solar generation, green hydrogen production and more electric vehicle chargers across New Zealand,” she said.
Infrastructure and innovation
The New Zealand Super Fund and the Accident Compensation Corporation are both likely to contribute to the $2 billion in the fund, but the Government won’t contribute directly.
The fund aims to draw in additional investments from Crown companies, superannuation funds, and private investors to accelerate the energy transition.
It appears to be targeting a mix of infrastructure investment, as well as more venture-style investments in new technology.
A division of Blackrock acquired solarZero last year, a young NZ company which provided solar, battery storage and energy services.
Charlie Reid, a senior portfolio manager for Blackrock in Asia-Pacific, said this investment had demonstrated the potential for clean energy in New Zealand.
Andrew Landman, head of the Blackrock in New Zealand and Australia, thanked institutional investors for supporting the initiative and leading on climate investments.
“The institutional investors here, whether you feel it or not in Auckland, are global leaders, they get recognised and we get a lot of inbound inquiry: how are your investors thinking in New Zealand?”
He said the level of innovation in New Zealand’s clean-tech industry was far greater than Blackrock had seen in other regions.
“We are seeing an enormous amount of visionary capabilities out of those investee companies that are great for the country, but also great for the export capabilities,” he said.
Venture capital veteran and founder of The Warehouse, Stephen Tindall, founder of K1W1, was called out for being “instrumental” in helping Blackrock to “understand and recognise” investment opportunities in New Zealand.
Examples of innovative cleantech companies include the likes of Energy Bank, Lanzatech, or Hiringa Energy.
71 Comments
"Blackrock said it would make investments.....It will require an investment of $42 billion"
Blackrock isn't investing anything. It wants to be the ticket clipper in between the developments and those with nothing better to do with their 'cash' than give it to them to manage. It's necessary here because we don't have the funds to do it ourselves and this method keeps it off the Public balance sheet. Our funds are tied up in other places.
(Let's say it all turns to custard and the whole lot is written off. Who loses their money? Not Blackrock, that's for sure)
Sojust NZ borrowing yet more money from bankers because we have given ours to the rich.
How about we do something old skool - like try to trim costs in other places to leave money to pay for this from existing debt?
i believe the repayments from pandemic related debt have ballooned already? have we not learned?
what a joke, NZ has paid twice too many times for its own assets, think about what happened with kiwi rail, Blackrock is no different , same country of origin, same product based on self promoting advisors, whose advice is worthless to a little country like NZ. These guys are parasites, and I dont want any of my tax paid dollars ending up in their pockets. Why is Labour having anything to do with Blackrock? ,
This could've been announced years ago. Rather wait until you're looking at a wipeout at a general election to bring up something sensible.
I am afraid we're horribly late to the party with Biden and EU having announced trillions in industrial subsidies for energy transition and, closer to home, Aussie going through a clean energy "gold rush" as the country pushes to decarbonise its grid.
Given all this, our major bottlenecks will be in attracting enough skilled engineers and tradespeople to help build these projects.
We should have gone with the Chinese - cheaper and quicker. But not possible.
That's it. Get back in line. & don't you dare ever question our 'just do whatever the Americans tell us to' China policy again. Link
Germany is approximately 357,022 sq km, while China is approximately 9,596,960 sq km, making China 2,588% larger than Germany.
Sorta hints that China has a lot more natural resource for generating energy available to it, and its starting from a far lower base. And then there is the what are you willing to sacrifice/destroy to create that power.. Pretty sure Germany won't be willing to decimate the black forest to install solar, China.. i wouldn't bet against it.
Is that an AI image of what the Waitakere are going to look like?
Not wanting to come across as a conspiracy theorist but I'm not sure that having Blackrock sinking it's claws into our country is a good thing.
I think I would prefer to have China foot the bill, pretty sure they would jump at the chance, just gotta remove a few satellite dishes and we gucci.
Not wanting to come across as a conspiracy theorist but I'm not sure that having Blackrock sinking it's claws into our country is a good thing.
I'll take dirty old capitalists like Blackrock over a Frenemy like the Chinese Govt any day when it comes to having them have their claws in our infrastructure. Neither would be better, but maybe not realistic.
Can I get some solar panels for my place on the ETF dime? Raked over the coals for the dryer as it is.
Honestly these renewables are all the unreliable or market synthesised 'green technologies'. Wind and Solar are unreliable, mess with the distribution grid and do not provide much energy for price . Try recycling a wind turbine or a solar panel. This hydrogen thing is simply a way to create a new 'energy' market to replace Petroleum but keep all the form and structure of the petroleum industry. Battery packs are excessively expensive and do not make sense for anyone other than emergency service buildings where generators once functioned or farms.
The whole 'green economy' is a huge grift.
2 points
1. The electrical grid may be at 83% renewable energy, but that makes up less than half of our national energy use. The remainder is mostly fossil fuelled, with a dash of biomass energy. The article above doesn't make that as clear as the Herald
These are fundamental drivers of our economy, so media outlets including interest.co.nz should take care to get these references right.
2. Switching processes while attempting to maintain BAU will create a local optima with the current business model that won't withstand escalating GHG emissions pricing. The unicorns of tomorrow are making money today supplying the early adopters whilst having net zero emissions pricing (>$272 NZD/tonne, MFE 2019) factored in, and are enabling different different economic configurations to meet current and future needs in more regenerative and circular ways.
Agreed. NZ power network association puts the cost of upgrading our entire electricity network (transmission and distribution) at upwards of $27 billion over the next decade (in today's NZD terms) to meet the electrification targets.
That comes to just under 11k across 2m electricity users (businesses and households) across the country or $80 per month more on top of current bills.
That's just the generation and distribution of it.
There's a mountain of cost in the pipeline to either convert or replace anything that is currently running off oil as it's energy source.
https://www.stuff.co.nz/national/300874106/coal-boilers-will-be-removed…
NZ Steel get a leg up.
We have the clean car rebate to move to EV's. But the majority of the cost is from the purchaser. Is the vehicle fleet going to start turning over faster than normal replacement rate?
NZ households and business will be competing in a global market with other countries de-carbonising to replace the same things.
These ticket clippers and Labour are late to the party given that there are already $4.7 billion of projects underway - so just another political reelection announcement about something that Labour has had not much to do with
Also as noted the smart startups are already developing here in NZ
Thank goodness Interest did not follow RNZs hyperbolic BS and claim that this would make us the first 100% renewable electricity. For the record Iceland, Albania, Congo, Paraguay and probably Norway are already 100% renewable.
They are still going on about Hydrogen, poor idiots they have not noticed that the world is starting to realise that this is a load of rubbish.
So. Who knows what a FireSale looks like? The precursor to a FireSale is that you need a 'BagMan' to 'manage' the money. That's what BlackRock Inc does.
They 'divest' liabilities to the 'investors' and charge them for it by clipping their ticket when they are awarded with a 'tendered' contract. A no-risk function as the money manager. $47b+ worth of grifting to come.
Has anyone noticed that the areas of the world experiencing the highest temperatures are countries that have been de-forested and lost their top-soil (Middle East, Western USA, North Africa). Perhaps rather than worrying about CO2 we should be restoring native biodiversity. Covering the ground in solar panels won't help. I would support a scheme to put micro generation on every house and leave the marginal land for plants and animals.
There's no juice in anything now - the EROEI of global society is now too low, and we're having to defer maintenance; avoid payment/repayment; triage.
The joke on all of them, is that this time the sucker will go down (apols to Bush minor) no question. And with it, all their digital representations of what they thought was 'wealth'.
GDP hasn't been able to outpace debt/entropy since 2005.
It's a bit like your neighbour burning his rubbish every weekend but you and your other neighbours are all for clean air.
. Do you say nothing and tell the rest of the street to keep paying for your green waste to be dumped. Or do you lambast the neighbour for the greater good of the planet.
Shaw wants to save the planet with Kiwis hard paid taxes while Malaysia burns fuel and Shaw looks the other way
Pristine land covered in solar and wind generators, perfect. We can throw them in a massive hole in 2040.
https://watch.adh.tv/nick-cater-s-battleground/season:2/videos/special-…
The taxpayers can pickup the costs like externalities, companies going bust.
Yip, selling assets means you make money on something that was going to always be a noòse around your neck,
Letting overseas conglomerates own your ass means they profit from owning your ass while continuing to control your ass, and allowing the local asset that could have controlled your ass to go broke.
Eg: POSTBANK
The details are pretty sparse, but how do you see this resulting in blackrock owning our ass? It looks like we'll be permitting them to fund some renewable generation. Maybe they'll end up as a power provider themselves, maybe they'll build and sell to other operators. Who knows?
The only (but important) difference I see between selling existing assets, and allowing others to fund new assets, is that you end up with more assets at the end of it. That is the whole point in this policy - selling off the gentailers does not achieve the same goal.
To put things into perspective, Meridian claim to own 8 billion dollars worth of property, plant and equipment. About the same for Mercury. Allowing another participant to come in and build 2 billion dollars of new generation sounds like healthy diversification to me, and far less significant than any policy to sell the remaining half of the existing part-owned gentailers.
Agreed. The industry is already building more generation - even the companies with a large existing generation network who have a vested interest in prices staying high. The business case for renewables clearly stacks up and we should have no need to do a sweetheart deal.
I think we're having some issues over the word 'own'. In this case, ASB seem to have outsourced some of their investment strategy to Blackrock. ASB are the customers, Blackrock are providing a service. If I hire a cleaner for my house, they do not own my house even if they have some influence on how things are arranged.
Planet of the humans on repeat
I'm sure this wind farm project will get off now rather than 2008 when it was financially unviable. What i hear you so look at the commercial terms the Maori tried to extract then. They wouldn't do that now would they with Maori caucus holding so much sway.
Ask yourself one question why isn't this project viable now and Labour shouting it from on high?
https://wattsupwiththat.com/2022/11/14/dissecting-a-wind-project-an-int…
https://www.stuff.co.nz/business/industries/101385931/a-community-fight…
Big project generation is all very well but how are they going to distribute it around the country. More to the point how are they going rebuild the whole local distribution networks to deal with twice the load. There is going to have to be some hefty rises in the local network charges.
I would be seriously looking at encouraging owner occupier solar installation with a lot of smart network and load control. That should go a long way to reduce demands on the network capacity and quickly mobilize a lot of investment and execution. Far quicker than cumbersome mega projects.
Now your true colours are becoming very apparent.
I've been off grid for 20 years, all on 2nd-hand L/A batteries, many over 20 years old and still working, albeit some are at 80-90%.
Your problem is that in 20 years there will be NO fossil energy available (exponential growth and doubling-time and best-first say so) so you had better consider what remaining alternatives you will have, before discarding things out-of-hand.
Water-at-height is the best battery - just sayin'
I saw this coming decades ago. Planted a forest for the good of the planet, didn't get into the ETS. Found out how little energy one can get by on, comfortably.
Lots of folk fear change - especially if it threatens their perceived status in the current regime - but it's been a lot of fun and a great intellectual challenge.
Hydrogen is a net energy loss; it takes more electrical energy to separate it, than the burning of it returns you. Then there's leakage, transporting energy, safety.
In some specialist applications, where the energy-loss is acceptable given the rewards (short-term space-travel, say) fuel-cells may have an application. In terms of replacing fossil energy in private transport? A total non-flyer.
We're better using the electricity as the energy source, rather than diluting it - and it'll be much more precious - via energy-loss transformations. The FF companies will promote hydrogen - it's their vaping, p/r-wise - but we mush t ignore that. Hydrogen is a dead-end.
Think more?
Beyond fossil energy, we won't be making PV panels (no PV will ever manufacture PV; the EROEI is too marginal, even negative). Nor will we be building major dams. So there will be a period of gradual decay of existing 'renewable' tech, followed by a lower-tech era.
That lower-tech we can guess at, by looking back to a similarly-energised time - and low-tech direct windmills (old-school farm style) are very likely contenders. So too is micro-hydro, whether E or direct-mechanical.
Well the technology better improve. The blades can be recycled (but they generally aren't) and they don't have a long life (some at least).
A recent Interest article about the possibilities for increased geothermal power stations seems a better bet while saving NZ's gas supply for the peak energy demand periods.
https://oilprice.com/Energy/Coal/China-Has-Approved-More-Than-50-Gigawa…
So we're "investing" in renewable energy while China churns out the coal power stations essentially nullifying any effort we make.
The way I see it is if countries like China and India are still using coal to produce energy then we are pissing money up the wall investing in renewable energy sources that are unreliable.
Still not sure why we aren't looking into waste-energy solutions like they do in Europe.
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