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Investors embrace NSW energy plan

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An investors group and superannuation giant have expressed support for the newly launched NSW Energy Infrastructure Roadmap, which has planned to inject $32 billion in private investment.

The NSW state government has unveiled its plan for building energy infrastructure for its transition towards net-zero emissions by 2050, with a focus on hydropower. 

The roadmap had a number of goals, including a target of attracting up to $32 billion in private investment for regional energy infrastructure by 2030. 

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Aware Super chief investment officer Damian Graham reported his fund was pleased to see a focus on improving the state’s electricity grid, which has previously been a barrier for renewables investment.

“One of the barriers to this investment in Australia has been significant capacity constraints with the energy grid,” Mr Graham said. 

“Announcements like the NSW government’s electricity infrastructure roadmap help to provide long-term investors like Aware Super with more certainty.”

However, he noted the fund would need to further understand the pricing structure developed to support the plan.

Emma Herd, chief executive of the Investor Group for Climate Change (IGCC), which represents a number of established investment managers and super funds, said the roadmap provided “critical market clarity” and a long-term framework for private sector investment in new zero-emissions energy projects. 

But she also referred to the federal climate change bill to be introduced by independent MP Zali Steggall, aimed at transitioning Australia to a decarbonised economy.

“While the NSW energy plan is a significant step, a national framework is still critical to ensuring an orderly transition to net zero emissions,” Ms Herd said. 

“The Climate Change National Framework Bill would provide a responsible national framework, setting a clear goal for net zero emissions by 2050 and ensuring independent guidance on emissions reductions and building climate resilience.”

Following the weekend’s US election results, more than 70 per cent of Australia’s two-way trade will be with countries with net-zero emissions commitments around mid-century, the IGCC chief warned. 

A climate shift from the US in capital markets and diplomatic circles would have a material impact, especially when combined with the climate policy commitments emerging across China, Japan, South Korea and Europe. 

“It serves no Australian industry or community well to ignore this global trend,” Ms Herd said.

“A responsible economic response is to adopt clear Paris-aligned goals and strategies towards decarbonising by 2050. IGCC commends the NSW energy plan and Steggall bill as two significant steps towards doing this.”

The Victorian government also indicated on Monday that one of the world’s largest lithium-ion batteries would be installed just outside of Geelong. 

Aware Super welcomed the battery storage move, saying like the NSW roadmap, it was a strong signal to long-term investors.

“This is an area we have been investigating for some time and hope to have some further announcements about this in the near future,” Mr Graham said. 

The super fund earlier this year declared it would be divesting from thermal coal mining, alongside setting targets to increase its investment in renewables and new technologies across its portfolio. It has also committed to net-zero emissions by 2050.

“We believe that sustainable investments will be more successful in the long-term,” Mr Graham said.

“Investing in renewables and storage capacity not only supports our members to achieve a better retirement outcome, it also supports a growing industry that will drive economic growth in NSW and beyond.”

 

Investors embrace NSW energy plan
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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