Aware Super to plough up to $2 billion into small scale solar and battery projects

One of Australia’s biggest super funds, Aware Super, says it plans to invest up to $2 billion into small scale solar and battery storage projects being built around the grid by renewable developer Birdwood Energy.

A deal announced on Wednesday by the two companies will see Aware Super – which manages $160 billion of assets – sink an initial $300 million into the partnership, with plans to boost this to $2 billion.

Birdwood says it has already bought two operating solar farms west of Adelaide with associated battery energy storage systems (BESS) for its new platform and partnership with Aware, and it has its eyes on another 10 such projects.

The Aware investment also includes a commercial renewable asset finance business called Juice Capital Energy. That business has 400 customers and is developing another 10 grid solar and battery projects that are ready to construct.

“Distributed energy is difficult for institutional investors to access due to the multitude of small developers and companies,” said Birdwood Energy managing partner Scott McGregor.

“While this sector offers the cheapest, most secure and cleanest energy system, it does require investment at scale in order to achieve capital and operating efficiencies and hit our net zero targets – with distributed energy we are able to fulfil about 60 per cent of Australia’s future energy requirement.”

McGregor told Reuters the majority of the projects will be 30-100 megawatts (MW), although there would be some larger projects in the mix.

The complexity of managing small-scale and distributed renewables has meant these markets have been neglected, as investors have focused on easier-to-understand utility solar, wind and BESS infrastructure.

But as delays in utility-scale wind and solar projects continue, investors have been putting money into batteries and distributed energy resources.

Investing in managers like Birdwood however, appear to be mitigating that challenge. Birdwood says it manages 4.1 gigawatt (GW) or US$6 billion ($9.4 billion) in assets across the US, Europe and Australia.

Furthermore, the focus on small-scale solar and BESS projects means grid connections are quicker and projects can be finalised faster, McGregor says.

He also added the platform would service retail, commercial and industrial customers via offtake agreements.

“We are well-positioned to execute trades that capture value for the platform and its customers from the widening spreads in intra-day pricing, with our management team’s expertise and experience in BESS in both Australia and the UK, central to meeting commercial objectives,” McGregor says.

Aware Super’s head of Infrastructure, Mark Hector, said the agreement provides a unique entry point into a platform with a strong pipeline of small scale, fast deployment renewable energy and storage assets. He said battery storage is a critical technology in supporting the transition to a clean energy future.