05 October 2021
Despite ongoing challenges posed by the COVID-19 pandemic, our development and construction projects have continued to meet important milestones. In June 2021, our Formosa 2 offshore wind project in Taiwan safely completed the installation of four export cables as scheduled. In Korea, the first phase of our 1.5 GW development in Ulsan became the country’s first ever floating offshore wind project to gain an electricity business licence, granting GIG and partners TotalEnergies exclusive development rights for the site, enabling the next phase of detailed environmental impact assessments to commence.
GIG and TotalEnergies were also successful in securing rights to develop 1.5 GW of offshore wind capacity on the east coast of the UK. With the final agreement for lease expected to sign in 2022, the Outer Dowsing Offshore Wind project will play a central role in delivering the UK Government’s ambition to install 40 GW of offshore wind by 2030. With further bids submitted and in preparation for upcoming leasing rounds, including in Scotland, France and Norway, we expect that portfolio to see significant continued growth throughout 2022.
In onshore wind, GIG is currently constructing 170 MW of capacity across projects in Norway and Sweden. Installation and commissioning of turbines has commenced at our Tysvaer and Buheii projects, with final commissioning of both projects anticipated during 2022. We continue to see growing interest in the Polish market, and successfully arranged power purchase agreements with our onshore wind assets for AirProducts and Danone Companies in Poland, taking the total renewable energy capacity supported by GIG power purchase agreements to 3.9 GW.
Our UK portfolio of waste to energy projects, delivered through our partnership with Covanta, have also made significant progress. The Rookery South project in Bedfordshire has started to burn waste and entered its final phase of commissioning, and we continue to work at Earls Gate in Grangemouth, Scotland and Newhurst in Leicestershire. In December 2020, we added the Protos Energy Recovery facility to our portfolio, reaching financial close and commencing construction on the 400 ktpa plant in Cheshire, England.
Throughout all of this work, health and safety remains a key priority. Read more about our approach to health and safety and about our development and construction assets.
In addition to GIG’s work, Macquarie Group is taking a market leading approach to sustainable real asset management and working to create climate resilient infrastructure. During the reporting period Macquarie Asset Management, the world’s largest infrastructure manager, announced a plan to manage its portfolio in line with net zero emissions by 2040, and joined the Net Zero Asset Manager’s Initiative and signed The Climate Pledge. As a leading sponsor of new infrastructure, Macquarie Capital is designing climate resilience into new infrastructure to deal with a higher frequency of extreme weather and rising sea levels.
GIG is committed to delivering commercial solutions for the rapid and large-scale deployment of new technologies that will deliver deep decarbonisation across all sectors of our economy.
IEA analysis suggests that by 2050, we need to be supplying almost half of total energy consumption from electricity to achieve net zero. This huge shift to electrification is already under way, led by the rapid deployment of renewable technologies, and now in the transformation of the transport sector. In June 2021, we launched our partnership with Heliox, creating one of the first ‘charging-as-a-service’ offerings for fleet electrification in Europe. By constructing and maintaining charging facilities on behalf of our customers, the service removes up-front costs, reducing one of the main barriers to fleet electrification.
With greater electrification, and a growing share of renewables in generation, comes a greater need for system flexibility through technologies like battery storage. In June 2021, we acquired our first utility-scale battery storage development portfolio. We’re now working to co-develop that portfolio of seven projects – strategically located across severely congested areas of the UK grid network – with partner Capbal.
Not all sectors can be electrified, and this is where hydrogen has a critical role to play. The IEA suggests the use of hydrogen will need to double over the course of this decade to meet net zero. To help meet this demand, we’re working to advance a number of projects with partners globally. This includes our work with SGN which is exploring the potential to create a hydrogen super-hub at the Port of Southampton – one of six major industrial clusters in the UK. As well as the hydrogen network, the feasibility study is exploring the addition of a carbon capture, utilisation and storage (CCUS) network to help further support the Port’s decarbonisation efforts.
Batteries, e-mobility, hydrogen and CCUS will continue to be some of the most important innovations driving the next phase of the energy transition. By applying our partnership and platform creation model to these emerging technologies, GIG is delivering the commercial solutions to accelerate their deployment. You can find out about our global platforms and partnerships in the impact and activity section of this report.
Macquarie Group is also a leader in global carbon markets, creating new products and investing to support the deployment of new technologies that enable the decarbonisation of our clients and portfolio companies. During the reporting period, Macquarie’s Commodities and Global Markets business was awarded Environmental Products Bank of the Year, created a new Global Carbon business, and our Asset Finance business has continued to grow its smart meter portfolio and is financing the deployment of hydrogen fuel cell electric trucks in North America. For the fifth year in a row Macquarie Capital was named the number one global finance advisor in renewable energy.
This approach is best illustrated through Cero Generation, our European solar development platform, launched in February 2021. Over the past three years, we partnered with developers across Europe to assemble an 8 GW development portfolio – one of the largest in Europe. To take that portfolio on the next stage of its journey, we created Cero as a specialist development business, with a team of 40 experts. Since its launch, Cero has formed a new partnership with EDF Renewables and Green Lighthouse Development in France, expanded into the Greek market through a partnership with WattCrop, and delivered its first Spanish projects into operations.
Cero follows in the footsteps of our specialist solar development platforms Blueleaf Energy in Asia Pacific and Savion LLC in North America, which have also seen continued growth throughout this year. Of particular note is Blueleaf's expansion into the emerging markets of India, with partner Vibrant Energy, and the Philippines with SunAsia, as well as its entry into Japan through the creation of Hinode Energy – a new joint venture with Univergy. In the US, Savion has been busy progressing its 14+ GW development pipeline and has signed new PPAs with Dominion Energy Vision, AEP Energy Partners and Target Corporation.
In October 2020, we also launched Calibrant Energy, a joint venture with Siemens. Calibrant offers onsite Energy-as-a-Service solutions to corporate, industrial and public sector clients to help them manage their energy transition. In May 2021, Calibrant completed the delivery of solar power systems at Eldorado Middle School in Illinois, US, which will provide around 90 per cent of the school’s electricity needs.
Our approach enables us to combine GIG's financial and technical experience, resources and global reach with the local expertise of our partners to create market-leading specialist development businesses. Looking forward, we expect to continue to replicate this model across different markets and technologies, delivering volume at a transformational scale and pace. You can read more about the activities of our development platforms and partnerships in the impact and activity section of this report.
In addition to GIG’s activities, other parts of Macquarie Group, often through managed funds, are extensively supporting the green transition. During the reporting period GIG partnered with Macquarie Asset Management to raise €1.6 billion for a new renewable energy fund. You can read more about that fund in the funds under management page of this report, or learn more about Macquarie’s wider activities.