Australia’s third-biggest pension fund plans to invest up to A$2bn (US$1.3bn) in superannuation fund Aware Super for renewables projects as the country looks to scale-up clean energy.
Aware Super, which has A$160bn under management from more than one million members, has announced a A$300m partnership with energy storage and renewables developer Birdwood Energy, Reuters reports.
The funds will go towards the establishment of the Birdwood Distributed Energy Platform, which has already purchased two operating solar farms, Birdwood Energy said in a press statement. It also has a further ten grid solar and battery projects in preparation for construction. Aware Super expects its investment to grow as more projects become ready for financing.
The partnership, which will see investment go primarily towards smaller-scale solar panel clusters paired with batteries, will diversify Aware’s current A$2bn portfolio, which is largely made up of large-scale wind and solar projects, Aware Super portfolio manager Jired Zhou said.
"We see tremendous opportunities in the renewable energy transition sector," he said.
"The reason not many institutional investors have done distributed energy is scale. Single projects are quite small... The structure we have tried to set up is to create a platform at scale so we can more efficiently manage and invest."
Birdwood Energy managing partner Scott McGregor said that meeting the A$2bn pipeline from Aware would require investment in some larger projects but added that the focus would remain on projects between 30MW and 100MW, which would in turn streamline grid connection processes.
“While this sector offers the cheapest, most secure and cleanest energy system, it does require investment at scale in order to achieve capital and operating efficiencies and hit our net zero targets – with distributed energy we are able to fulfil about 60% of Australia’s future energy requirement,” he said in a statement.
The partnership comes as Australia moves to significantly increase its renewables output in an effort to alleviate its dependency on coal. A report published by climate think tank Ember in September found that Australia continues to rank top for per capita emissions from production and consumption of coal power in the G20, producing more than triple the world’s average coal power emissions.
The country did post a record high in clean electricity output for this year’s first quarter, forcing down energy prices and slightly displacing coal and gas in the energy mix, but investment in renewables remains insufficient. Last week, new modelling from Australia’s Clean Energy Council showed the country must invest approximately $10bn in its renewable energy sector annually for the next ten years to keep up with the US and other competitors.
McGregor also told the Australian Financial Review that: “Everyone talks about this pipeline that can’t be unlocked in Australia. This is a way to unlock it. It should hopefully provide one channel to get to net zero... which is faster and cheaper.”
The company will focus on late-stage, ready-to-build projects servicing retail, commercial and industrial customers.
