Written By: Natalie Baer
BlackRock, the world’s largest asset manager, is planning further investment in renewable energy technologies after claiming success of its first renewable power fund.
BlackRock, which manages more than US$4 trillion of assets on behalf of global individuals and institutions, has announced the launch of further investment opportunities in renewable energy. The company witnessed great success with its first renewable energy fund, which closed in December 2013.
Founded in 2011, BlackRock’s Renewable Power Group offers clients the opportunity to pursue returns from investments in onshore wind and solar projects that have been commercially deployed for several decades. Based on a great demand in this sector, BlackRock announced a range of follow-up products.
Speaking to the Financial Times, Jim Barry, head of BlackRock’s renewable power group, announced, “There has been a huge flood of capital into the space. We felt this was an attractive institutional strategy.”
Barry cited concerns about gas generation, particularly focusing on its price vulnerability. “Do we invest in gas generation –which is cheap now, but what is it going to be like in 30 years? And then [investors] also have to think about carbon dioxide even as a contingent liability”, says Barry, “Or do they build or buy renewable power, where they can lock up the costs for 15, 20 and 25 years?”
Commenting on the company’s portfolio strategy, Barry said, “We will seek to develop a range of products over the course of the next three years, but we will shape them all differently depending on the institutional need.”
According to the US Energy Information Administration, renewable-electricity generation is expected to be one of the fastest growing sources of energy generation, estimated to increase by 2.8% per year to 2040.