Government partners with US investment giant BlackRock on $2bn fund for solar, wind, hydrogen
US mega-investor BlackRock has worked with the Government to launch a new $2bn investment fund to help New Zealand reach 100% renewable electricity by 2030. BlackRock says the fund which will invest in projects like solar, wind, green hydrogen, battery storage and EV charging is the first time its made a country-specific investment like this. Globally, investment in renewable energy is booming. The investment giant cited estimates saying it will take $42bn to get New Zealand from 83% renewable electricity to 100%. We firmly believe NZ could be the first country in the world to be 100% renewable energy. Long-term, though, solving the issues of high power prices and hydropower generation falling during dry years is expected to need a game-changing investment on the scale of the proposed Lake Onslow pumped hydro station or a significant collection of smaller developments . Asked what other investment was coming to bolster the clean power switch, Energy Minister Megan Woods pointed to the Governments existing $1bn industrial decarbonisation fund, which recently has given large grants to Fonterra and NZ Steel to reduce their coal use. Unlike the US administration under President Joe Biden, the New Zealand Government doesnt offer direct stimulus for initiatives such as household solar. BlackRock didnt answer directly on whether a change of Government and possible ditching of Labours 2030 deadline for being 100% renewable would make the fund less attractive, instead discussing the goal of getting investment rolling quickly. Globally, $200 trillion will be needed to get to net-zero greenhouse gas emissions by 2050 and halt global warming, said BlackRock Asia-Pacific head of climate infrastructure Charlie Reid. Head of BlackRock Australasia, Andrew Landman, said the firms involvement in managing retirement investments in New Zealand had shown that the level of innovation "is far greater in this country than we see elsewhere in clean tech" and he was confident the country would get to 100% renewably-powered. In 2022, BlackRock bought New Zealand company solarZero, a firm that instals home solar power for no money upfront, in a 100m plus deal. While the Government wont invest directly in the new fund, it has helped and encouraged BlackRock to establish it, said Prime Minister Chris Hipkins, adding that Government-owned investors (which include the NZ Super Fund and ACC) may well put money in. Conversely, the fund wont be investing directly in state-owned power companies such as Meridian and Genesis, though BlackRock said it might invest alongside the state-owned gentailers in specific projects. This will be a game changer for the clean tech sector, said Hipkins, at the announcement on Tuesday in central Auckland, in a speech promising that this would boost well-paid renewables jobs. The Warehouse founder Sir Stephen Tindall had been instrumental in helping find investment opportunities, BlackRock said. Landman said it was the first time the firm had done a country-specific decarbonisation fund. "We've benefited over the last 10 years managing various retirement savings for New Zealand and I think through that engagement we've learnt so much about the innovation in New Zealand and also the institutional investors here - whether you feel it or not - in Auckland, are global leaders. "They have really driven this idea very hard with us, and we've thought about it." Woods and Climate Change Minister James Shaw said new renewable projects enabled by the fund (like other renewable schemes in New Zealand) might enable electricity customers to make claims about being powered by zero-carbon electricity, which could prove marketable overseas. Such claims have proved controversial previously, when Meridian sold products called renewable energy certificates separately from its renewable electricity . The certificates allowed companies to claim they used zero carbon electricity in their operations and avoid purchasing carbon offsets to claim carbon neutrality, even though there was no clear requirement for the money to be used to create new or additional clean electricity. Companies could make the claims even though they were buying power off the national grid, which is partly fossil-fuelled. After questions were raised about the climate credentials of the certificates, Woods announced a review of the environment integrity framework. Woods said on Tuesday that review was still ongoing. National Party leader Christopher Luxon welcomed the $2bn investment: ...it underscores exactly what we've been saying - that the world is awash with investment opportunities for companies and funds that actually want to invest in renewable energy," he said. However Luxon said New Zealand was too slow to consent renewable energy projects. "You can build a wind farm in two years, but it's taking eight years to consent it here in New Zealand. Hipkins said the Governments Resource Management Act reforms would speed up consenting, reforms he said National wanted to scrap.