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Why investors are eyeing the energy transition

Chris Ireland, Ontario Teachers’ Senior Managing Director of Greenfield Investments and Renewables, shares insights into what's driving the demand for renewables and emerging trends within the sector.

Powerful forces are driving increased investment in the energy transition more broadly and in renewable energy, in particular. Ontario Teachers' already has over $34 billion in green assets. They include companies that generate clean energy, reduce demand for fossil fuels and help build a sustainable economy. 

Recently, Chris Ireland, Ontario Teachers’ Senior Managing Director of Greenfield Investments and Renewables, discussed the opportunities in the energy transition with Pensions & Investments. Here are highlights from that interview along with additional insights on what’s driving demand for renewables.

What’s driving investment in renewable energy?

Chris Ireland

Chris Ireland: We see a lot of opportunity with the energy transition. A huge amount of capital is needed as countries transform their energy systems and as others build businesses to support the transition. Last year, we released a Renewable Energy Report highlighting key factors driving demand for renewable power. These factors include bolder climate ambitions, a heightened focus on energy security and the rise of climate-centric industrial policies. Also on the list is the improving cost-competitiveness of renewable energy. 

As a responsible investor, we are committed to deploying capital towards initiatives that not only generate financial returns but also contribute to positive environmental and social outcomes. We have invested a material amount in renewable energy across several technologies and we plan to continue to allocate capital to the sector. 

Which emerging technologies in the energy sector are proving to be attractive for an investor?

CI: We continue to explore a wide range of technologies beyond traditional wind and solar energy. These include energy storage solutions, hydrogen technology, advanced nuclear energy, renewable fuels and others. Hydrogen, for example, is a versatile and clean-burning energy carrier that can be stored in large amounts and for extended periods before being transformed into electricity. We’ve invested in a project called ACES Delta, which once completed will be the largest green hydrogen storage facility in the world, playing a role in the decarbonization of the Western U.S.

 

How is Ontario Teachers' adapting its investment strategy as the sector evolves? 

CI: We began our direct investment initiatives over 20 years ago and in the renewable sector 15 years ago, recognizing the potential for long-term value creation and alignment with our mission as a pension plan to secure sustainable returns for our members. 

We already have a strong and diversified portfolio across the sector, positioning us to seize opportunities in the energy transition. We are on course to achieving our target of $50 billion in green assets. As we close in on this milestone, our focus will shift towards further diversification, innovation and sustainability within our investment portfolio by exploring new opportunities and technologies that contribute to environmental stewardship and long-term value creation.

A selection of Ontario Teachers’ investments in renewables

Corio

Corio

In 2022, we entered into a joint venture with offshore wind development company Corio Generation to pursue clean energy solutions via offshore wind projects across the globe. Corio and its partners are currently developing a 657 km2 offshore wind project in Scotland called West of Orkney Wind Farm.

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ACES Delta

ACES Delta

Our portfolio company ACES Delta is addressing seasonal renewable energy challenges in the U.S. by increasing green hydrogen storage capabilities. With our support, alongside additional investors and funding from the U.S. government, the storage platform will be the largest in the world upon completion.

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Mahindra Susten

Mahindra Susten

In 2022, we acquired a 30% stake in Indian renewable energy company Mahindra Susten, a major player in the country’s growing solar sector. The investment strategically expands our exposure to the world’s most populous country and third-largest producer of renewable energy.

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Equis Development

Equis Development

In 2020, we purchased an approximate 50% stake in energy infrastructure developer Equis Development. Equis uses battery storage to smooth out variations in renewable power. The company is actively pursuing infrastructure development and investment across the Asia-Pacific region, with a primary focus on Australia, Japan, and South Korea. Its projects include the Melbourne Renewable Energy Hub, which will serve one million-plus households.

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More to explore