"Sputnik" Era Upon Us, Steven Chu Estimates
We’re in a new “Sputnik” era according to U.S Energy Secretary Steven Chu, who spoke yesterday about the success of China’s clean energy industries and the potential for the United States to emerge in a new “Sputnick Moment.”
"When it comes to innovation, Americans don't take a back seat to anyone - and we certainly won't start now," said Secretary Chu. "From wind power to nuclear reactors to high speed rail, China and other countries are moving aggressively to capture the lead. Given that challenge, and given the enormous economic opportunities in clean energy, it's time for America to do what we do best: innovate. As President Obama has said, we should not, cannot, and will not play for second place."
Chu outlined a series of clean energy innovation efforts to jumpstart the “Sputnik” revolution, including the Recovery Act funded electric vehicle batteries at 500 miles on a single charge and a project established by the Energy Innovation Hub led by the California Institute of Technology for converting sunlight into usable fuel.
In risk of faltering behind China and other countries, Chu recommended the United States begin focusing on improving the work within high voltage transmission, high speed rail, advanced coal technologies, nuclear power, alternative energy vehicles, renewable energy and supercomputing. While China has been advancing in the last few years with scientific partnerships and global testing, Chu stressed the importance of continuing innovation while focusing on keeping all program local. As China continues to invest in clean energy technologies, so too will the United States, estimates Chu, with 17 National Labs and leading scientific and computing resources already established via the Department of Energy.
USS pension fund buys 50% stake in Bruc Energy
The Universities Superannuation Scheme (USS) private pension fund has taken a 50% stake in Bruc Energy, a Spain and Portugal renewables-focussed investment vehicle created by OPTrust and Spanish businessman, Juan Béjar.
In the transaction arranged by USS Investment Management, the wholly-owned subsidiary and principal investment manager and advisor to the Scheme, USS has invested €225M (c.£200m) in return for the stake in a major pipeline of 4,000MW of PV farms. Bruc Energy has an ambitious growth plan that goes beyond this to invest in other green energies, such as wind power.
USS, which announced two weeks ago its aim to be net zero by 2050, already has a strong relationship with both OPTrust and Juan Bejar through Globalvia, a specialist infrastructure platform focussed on managing rail and highways assets around the world.
Spain’s sun-drenched climate and national target to reach 100% renewable-based generation by 2050 make it an attractive place to invest in solar energy. In addition, the decades long lifespan of solar PV panels make them well-suited to USS in helping pay members’ pensions long into the future.
USS Investment Management CEO, Simon Pilcher, said: “We are delighted to be committing further finance to renewables and particularly to a major Spanish solar platform like this. We have already invested or committed around £1 billion to renewable energy and demand for this will only increase as more and more countries transition to lower carbon. We know that our members care very much about climate change and ESG and we are convinced that USS playing its part in supporting the transition to a low carbon economy makes good financial sense, too. This announcement closely follows on from our stated ambition to become Net Zero by 2050 so this transaction and others like it will be a key plank of our strategy going forward.”
Gavin Merchant, Co-Head of Direct Equity, said: “We have worked alongside OPTrust and Juan Béjar for many years and are delighted to be making this investment. The long-term nature of solar and the steady returns make renewables attractive to a pension scheme needing to pay pensions for years to come.”
OPTrust’s Morgan McCormick, Managing Director, Private Markets Group UK said: “We are excited to have USS join Bruc Energy building on our strong existing relationship. Their investment will help Bruc become one of the leading renewable energy platforms in Spain. At OPTrust, we believe that investing in renewable energy helps transitions the world to a more sustainable economy. In doing so, we can continue to deliver on our mission of paying pensions today and preserving pensions for tomorrow.”
Béjar said the partnership is a key step to establishing Bruc as one of the more dynamic players in the renewables industry in Spain, because it ensures access to the funds to develop our current portfolio. "All three shareholders of Bruc Energy share a long-term vision, but also the ambition and the social responsibility to counter the effects of climate change in the short-term," he said.
Following the transaction, which remains subject to conditions, including regulatory approval, Bruc Energy will be owned 50% by USS and BROP, a vehicle owned by OPTrust and Béjar. The transaction was advised by Royal Bank of Canada (RBC), Greenhill and Nomura. Juan Béjar will be the president of Bruc Energy and Luis Venero the CEO.