Friday, 7 July 2022
One of Australia’s largest ESG investors, Aware Super has made an early move to be part of the nation’s accelerating energy transition.
The fund’s latest move is a recent cornerstone investment into North Harbour Clean Energy (NHCE), which the fund’s managers believe is well positioned amongst an emerging new wave of Australian energy technologies.
Aware Super believes there are opportunities to be had in solving the very real challenge of how a nation as big and energy-hungry as Australia deals with transitioning the nation’s electricity supply. In its most recent Integrated Systems Plan the Australian Energy Market Operator, AEMO, estimates a need for an additional 400GWh of storage by 2030, growing to more than 600GWh by 2050. Based on AEMO’s numbers, NHCE has priced the investment opportunity at $30 billion and $100 billion over the 2030 and 2050 horizons respectively.
Less than five years old, NHCE seeks to identify, develop and operate renewable energy storage projects with a focus on two critical – and already commercial – storage technologies: closed-loop pumped hydro, and vanadium redox flow batteries (VRFB).
Rather than the mega-projects pumped hydro is typically associated with, NHCE is taking a unique approach to creating storage assets by focusing on midscale projects, at or near to major loads, to minimise the delivered cost of electricity. In addition, it avoids the worst of the land-use debate by focusing on already disturbed land and utilising existing infrastructure.
With VRFB, the NHCE team is looking to deploy Australian-developed technology sized at industrial up to grid scale into key demand centres. Ultimately it sees a fully Australian-based solution utilising Australianproduced vanadium and local manufacturing of other key components.
NHCE Managing Director, Tony Schultz, says it’s all part of a strategy to focus on accelerating projects to their commercial operations date.
”We know electrifying the Australian economy needs to mean more than simply replacing domestic energy generation with renewables,” Mr Schultz said.
”Declining sources of carbon-intensive dispatchable power, driven by the move to decarbonise electricity generation is the key issue in the electricity market, and is now an increasing part of the discussion.
”Pumped hydro in particular can play a significant role in closing that capacity gap, and we’re very enthusiastic about the opportunities that our project portfolio has the potential to unlock.”
Aware Super Senior Portfolio Manager, Mark Hector, says NHCE’s proposition fits neatly with the fund’s investment philosophy of seeking to deliver strong long-term returns to its members, at the same time as having a positive impact on communities through its investment strategy.
“In NHCE we saw an opportunity to support a very early-stage energy storage business, led by a team with excellent credentials in the energy sector, energetically pursuing solutions that can deliver on Eastern Australia’s absolute need for dispatchable, renewable power,” Mr Hector said.
“In addition to providing early working capital, we recognised a significant strategic opportunity to fund larger equity capital into future successful development projects. That presented us with a very attractive opportunity to deliver strong investment performance for our members, at the same time as making a meaningful and practical contribution to the nation’s energy transition.”
About Vanadium Redox Flow Batteries (VRFB)
VRFBs are a type of rechargeable flow battery that employs vanadium ions as charge carriers. For several reasons, including the relative bulk of the battery, their application is best suited to grid-energy storage. NHCE sees VRFBs playing a strategic role as a behind-the-meter installation suitable for a variety of industrial applications.
The underlying VRFB technology was first invented at the University of New South Wales in 1983, and patented in 1986.