The NZ Superannuation Fund is slowly tracking towards its target of $1 trillion in investments in 50 years’ time – a breathtaking 37.6 percent of GDP.
It’s just reported an 11.9 percent pre-tax return for the year to June. The gain (lagging just 0.1 percent behind its reference portfolio) is because of a strong performance by global share markets.
The fund’s value increased by $9.7 billion to a new high of $65.4b, after benchmarking to a Paris climate targets-aligned index that reduced its holdings from about 6,000 to 1,200. But chief executive Matt Whineray says the main focus is on its long-term performance – and that’s where its SuperBuild infrastructure partnerships come in.
The Super Fund was burned by its failed attempt to invest in Auckland Light Rail, but Whineray says it learned from that to avoid being tied into non-disclosure conditions that allowed critics to “hijack the narrative”.
“That’s a definite regret in terms of the public interest,” he says. “We have to be able to move people around our city more efficiently.”
Now, the Super Fund has partnered to build a big wind farm off the Taranaki coast, and Whineray is determined to engage better with government, business, iwi and the wider public. “We’re going to need a significant amount of generation capacity in order to electrify the economy, if we’re going to achieve the net zero target.”
The Ministry of Business, Innovation and Employment is consulting on proposed regulations to enable renewable energy development at sea, while protecting the interests of New Zealanders now and in the future.
The NZ Super Fund is not the only organisation working to build an offshore wind farm. Newsroom reported this month that a developer named Wind Quarry Zealandia has also applied for a consent to build a 54-turbine farm off the coast of Taranaki. That firm is run by American brothers Pat and John O'Meara.
The ministry says offshore renewables such as wind generation have the potential to meet the needs of greater electricity demand, and support meeting the Government’s targets of 100 percent renewable electricity generation by 2030, and net-zero emissions by 2050.
But 2030 is fast approaching. Whineray says that regulatory framework is the next step in building the wind farm, and it's a fundamental one to enable sustainable energy projects to break ground – or break water.
There are expectations that some of the skilled workers who will lose their jobs on the Taranaki gas fields should be able to be retrained to work on the wind farms, though it's not yet clear in what numbers. The wind farm partners have been working with Venture Taranaki and low-emissions energy innovation group Ara Ake on industry skills mapping, he says.
"How do we collaborate around the transition of the skilled labour force? There's a lot of work going on on that. It's just really urgency. We've got to pick up the pace.
"I think there is a big opportunity there. There is a lot of support required. Some of the skills will be truly transferable. Some of them might not. That's the work we're doing with local players to understand what resources are there, and how do we support the new skills that we need?"
Taranaki Offshore is a partnership between the Super Fund and Copenhagen Infrastructure Partners. Offshore wind turbines operate just the same as regular wind turbines, like the ones in Waverley or on the hills around Palmerston North, they say.
"The difference is that offshore wind turbines are installed in the sea, relatively far from the coast – so far that they might be just visible over the horizon on a clear day. The wind blows much more regularly and strongly out at sea, meaning offshore turbines tend to provide power more reliably."
The wind farm would be about 25km offshore, made up of 70 of the most powerful wind turbines available on the market, each one almost as tall as the Sky Tower in Auckland. The farm could power 650,000 homes and satisfy around 10 percent of Aotearoa’s electricity demand, the partnership claims.
The partnership is to hold a public meeting this month, in Hawera, to discuss with locals the environmental aspects of offshore wind projects. And Whineray says conversations are proceeding well with Taranaki iwi who hold mana whenua and mana moana over the land and sea that the wind farm would affect.
The wind farm won't deliver returns for some years. Meanwhile, the news is not all good for the Super Fund investments, in the coming year or two. The geopolitical tensions driven by Russia’s invasion of Ukraine, and concerns regarding China’s stalling economy are of "real concern", Whineray says.