New Zealand Sovereign Wealth Fund Forms Offshore Wind Partnership with CIP

NZ Super Fund and Copenhagen Infrastructure Partners (CIP) are working in partnership to explore the potential for large-scale offshore wind energy in the South Taranaki Bight offshore New Zealand.

The NZD 58 billion (EUR 36.4 billion) NZ Super Fund is a global investment fund that was established by the New Zealand Government to help pre-fund universal superannuation.

The feasibility study and the development of the project will be managed by a newly established jointly held company, NZ Super Fund.

Subject to feasibility, an initial planned 1 GW development would represent over 11 per cent of New Zealand’s current electricity demand capacity and could power over 650,000 homes.

The partners believe the project could later expand to 2 GW, helping to meet strong projected growth in demand for electricity in New Zealand.

CIP and NZ Super Fund are in the early stages of project feasibility evaluation, which includes wind resource measurement, designing detailed environmental impact assessments with the support of local communities and experts, and examining industry potential and training needs for the Taranaki region. The partners will also focus on measures to ensure any project can coexist with other uses of the marine area.

CIP’s investment in the South Taranaki project is part of a broader project development pipeline for CIP’s upcoming flagship fund ‘CI V’.

This project will be CIP’s first investment in Aotearoa New Zealand and follows the NZD 58 billion NZ Super Fund’s NZD 208 million commitment to CIP’s new Energy Transition Fund (CI ETF I) last year.

The success of offshore wind in South Taranaki will require active engagement and partnering with a wide variety of key stakeholders, including local iwi, businesses and communities, the companies said. The partners have had positive initial discussions and look forward to furthering the relationships with iwi and other stakeholders as early feasibility work continues.

CIP and NZ Super Fund have welcomed a recent announcement by New Zealand’s Minister of Energy and Resources Megan Woods that Government would begin work on a new regulatory regime for offshore renewable energy in 2022.

NZ Super Fund CEO Matt Whineray says offshore wind energy has the potential to be an attractive commercial opportunity that aligns with the NZ Super Fund’s climate change investment strategy and focus on sustainable finance, as well as its desire to invest in large-scale New Zealand infrastructure.

”We are in the unique position of being able to attract best-in-class global partners on infrastructure developments that create positive environmental and social outcomes while delivering financial returns for New Zealanders through the Fund,” Whineray said.

”The climate crisis is driving a global shift in how countries produce energy. We are focused on opportunities that allow us to apply our long-term investment capital to support this shift and the Fund’s own public commitment to being net zero by 2050. While this proposal is still at a very early, exploratory stage, we are confident it could help New Zealand’s transition away from fossil fuels and towards home-grown clean energy.”

CIP Partner Michael Hannibal said Aotearoa New Zealand’s world-class offshore wind fundamentals – high average wind speeds and relatively shallow waters close to transmission infrastructure – makes the project an exciting development for CIP.

”There is a global shift to clean and sustainable energy sources. New Zealand has a prime opportunity to utilise its natural resources, in this case offshore wind, to power the country into the future. We look forward to working with NZ Super Fund, the NZ Government, local iwi and communities on this project,” Hannibal said.

”The New Zealand Government’s renewable energy ambitions will require strong partnerships to deliver large-scale clean energy projects over the coming decade. We can think of no better partner than the NZ Super Fund to help bring our expertise to New Zealand.”

Hannibal added that the Taranaki region has the skills and know-how to make offshore wind a success.

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CIP recently announced its ambition to have over NZD 160 billion under management by 2030. Both CIP and NZ Super Fund are signatories of the United Nations Principles for Responsible Investment.

Project feasibility is being managed locally by Copenhagen Offshore Partners (COP). The feasibility work is expected to take approximately 24 months.

Should the project proceed, and subject to relevant regulatory approvals, CIP and NZ Super Fund could deliver power by the end of the decade, making a contribution to New Zealand’s ambitions for 100 per cent renewable energy by 2030.

Demand for electricity is expected to grow over the coming decades as New Zealand shifts from fossil fuel energy to renewable forms. For instance, electricity grid operator Transpower believes demand will grow from ~43 TWh today to 70 TWh by 2050 primarily from electrifying transport and process heat. The offshore wind project also fits in with New Zealand’s commitment to achieving net-zero emissions by 2050.

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