Indigenous renewables firm Bute Energy has secured nearly £70m in Welsh local authority pension fund backing to help bring its portfolio of planned onshore windfarms across Wales to operation.
The Cardiff-based firm has to date been backed by one of Europe’s biggest renewable energy investors in Copenhagen Infrastructure Partners (CIP), which has an equity stake in its energy park projects.
Now the Wales Pension Partnership (WPP) - which pools investment on behalf of eight local authority pension funds including Powys, Swansea and Rhondda Cynon Taf - is providing additional equity investment worth £68m to support Bute’s ambitious rollout. The funding, subject to planning approvals, would take its projects to a point where it can decide whether to seek, or not, subsidy support from the 海角视频 Government in the form of a contract for difference.
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The investment is the biggest yet from the Welsh public sector pension sector - although small in terms of total funds under management - in backing the renewables industry in Wales. There has been growing cross-party support for pension funds in Wales to back the sector, including First Minister Mark Drakeford who last year called on the WPP to accelerate divestment of funds held in fossil fuel equities in order to support the drive to net zero.
The unlocking of pension funds to finance infrastructure, as well firms with scale-up potential, is also being targeted by the 海角视频 Government - although ultimately it is for fund managers to decide on investment strategies.
Bute is currently consulting of five proposed windfarm energy parks in Powys and Conwy which collectively would provide nearly 100 turbines. For its Twyn Hywel energy park on the border of Caerphilly and Rhondda Cynon Taf it recently submitted an application for a development of national significance to Planning and Environment Decisions Wales, which will make a recommendation to Welsh Government ministers on whether to approve the project or not.
Councillor Ted Palmer, chair of the WPP joint governance committee, said: “We are at a critical time for society as we attempt to address climate change and the cost-of-living crisis, while creating green, skilled jobs. This investment in Bute Energy projects means that our members are contributing to addressing all of these issues while also retaining the wealth from renewable energy in Wales.
“This will deliver ethical investments and will contribute to the wellbeing of future generations in Wales – as well as meeting Welsh Government targets on local and shared ownership of renewable energy projects.”
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Bute Energy said its energy parks and electricity grid projects are expected to attract up to £3bn of direct investment. As well as creating construction jobs and skilled long-term roles during their operational phases, Bute said its investment would also create indirect jobs through supply chains.
Once operational, the energy parks are expected to deliver approximately £800m of community benefit funding to the communities living closest to them. They will generate enough clean, green electricity to offset more than 2.6 million tonnes of CO2 emissions a year – equivalent to around 7% of Wales’s total greenhouse gas emissions.
Oliver Millican, chairman of the Bute Energy Group, said: “We’re delighted to welcome this public sector investment in renewable energy in Wales. Public sector workers across the country are investing in projects that will generate clean, green energy that homes, businesses, schools and hospitals will need in the future. They are not only investing in their future, but also the health and wellbeing of future generations in Wales.
“At Bute Energy our ambition is to power Wales with clean green energy, and empower our communities through investment, jobs, and skills. We share WPP’s values of long term, stable and sustainable investment.
“Just like Wales was at the heart of the first industrial revolution, it has all the natural resources, skills and innovative thinking to lead the Green Revolution. The Welsh Government is determined that the benefit, value and wealth from this green revolution will come to and stay in Wales and this investment will help to guarantee that.”
WPP has been advised by independent clean energy asset manager Capital Dynamics and by the law firms TLT and Burges Salmon.