May 27, 2020

The latest Multibillion-Dollar Renewables Program for BlackRock Aims at Storage

A recent mega-billion dollar renewable power project is under development, and a good part of it can go to batteries by the world’s biggest wealth manager. BlackRock has recently started to purchase G.E.’s integrated solar and storage company, which is a significant global player in the wind and solar energy, including last year’s takeover.

If you look at power storage in the next couple of years, “the industry will grow,” stated Martin Torres, head of America for the BlackRock Real Assets renewable energy division. He also notes that Torres and his team are “working with eagerness” the growth of the American offshore wind industry.

The financial world was stunned by BlackRock this month when Chief executive Officer Larry Fink announced that sustainable development would become the focus of its spending. The exact meaning of the Fink declaration needs to be seen in BlackRock’s support for fossil fuel. Yet BlackRock green products need little burning in the area of renewable energy, at least.

In 2011, BlackRock unveiled its first renewable energy equity fund. Since then, the firm has been playing an important role to persuade institutional investors — think about pension schemes, insurance firms, and supporters— to find solar and wind power like any other technology asset: predictable, secure, quickly lucrative.  

Big investors ‘ first private-equity renewable energies fund in BlackRock has created around $600 million in investment. A few years after the completion of the second, the total was 1,65 billion dollars

BlackRock has reached $2.5 billion of obligations with the third vintage, which was identified as the Global Renewable Power III fund (GRP III). It has confirmed a track $1 billion “first close” in December, so that, while the Fund continually invests, it can start making investments. It is a remarkable difference between the way the renewable energy industry appeared a decade ago and today.

The wind and solar energy onshore will remain critical GRP III investments, with an increasing focus on reactivating aging wind initiatives. Yet BlackRock still tracks U.S. energy storage industries in a fast-growing way, Torres said.

A couple of early investments in back-of – the-line storage projects for business and industry clients were made in BlackRock’s latest renewables fund, which is the target market for G.E.’s last year, called Distributed Solar Development. 

The U.S. wind energy, which will grow in a yearly multi-gigawatt industry by mid-10%, is also a potential new frontier for investors. Back to its previous activities in Asia, BlackRock has already explored some U.S. offshore wind projects. But the U.S. industry might not grow as Europe does, Torres says.

There is no end to the age of federal subsidies for U.S. renewable energy projects, with the wind sector gaining another extension to its federal manufacturing tax credit by the end of 2019 and the battle of the solar industry continuing in 2020.

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