Offshore wind is not a place for passengers – CPP

This year has seen a swathe of platforms announced. However, ones that are wholly-owned by LPs are still not commonplace, particularly when the platform in question will develop offshore wind as is the case with CPP Investments’ newly launched Reventus Energy. CPP Investments, though, has form with the European solar, wind and battery platform Renewable Power Capital and the US-based Pattern Energy platform well established, among others.

The pension’s entire investable funds are already topping half a trillion dollars and growing. The funds allocated to infrastructure will grow with it and, according to Bill Rogers, head of CPP Investments’ global Sustainable Energies investment activities, the LP going at it alone and through multi-billion platforms is an obvious consequence of the scale of the investments needed.

“With a €20 billion portfolio growing to €40 billion over the coming years, and with a team of 60 people, we can’t invest directly in lots of projects worth some tens of millions or even a few hundred million. The whole portfolio becomes too fragmented. Also, large projects demand specialist skills, so we tend to either set-up or back platforms that house the specialist capability to originate, structure, develop, construct and operate these projects, either directly or alongside partners.

“We see [offshore wind] as a sector with exciting growth prospects. It also plays into the capabilities we have, as developing and building these projects takes time and requires large amounts of flexible capital,” Rogers says.

While Reventus Power was recently part of a consortium that was granted a feasibility licence for the 2.5GW fixed-bottom Gippsland Skies in Australia, CPP Investments is anything but new to offshore wind. In 2019, it partnered with Enbridge in France through the Maple Power joint venture. This has, among other projects, resulted in France’s first commercial offshore wind park, the 480MW Saint-Nazaire commissioned in 2022.

Currently, Maple Power is developing the 500MW Fecamp project with EDF Renewables and GIP  and Mubadala-owned Skyborn Renewables, while CPP Investments has won a Californian seabed under its own brand, alongside Oceanwinds, an EDP Renewables and ENGIE offshore wind joint venture.

Having Reventus as the overarching platform will not make such partnerships less interesting, according to Rogers. “We’ve consolidated our OSW holdings into Reventus, and it is a business we’d like to invest billions in. However, Reventus’ growth strategy will also be based on finding the right opportunities alongside the right partners.”

More generally, Rogers is adamant that CPP Investments is not turning its back on the wider infrastructure community. “Partnerships are a core part of CPP Investments’ DNA and have been a major part of our global success. Within Sustainable Energies, we have made many investments alongside both industrial and financial partners, and this will be a core part of our strategy going forward.”

Plenty of reasons to keep offshore afloat

As the launch of Reventus demonstrates, CPP Investments strongly believes in offshore wind despite recent travails. Also, with locations suitable for fixed-bottom projects being somewhat thin on the ground, Reventus is developing a pipeline in floating wind. The Canadian pension has already been involved with floating offshore wind as Maple Power was an early mover and partnered with Enbridge on France’s first floating wind farm, the 25MW Provence Grand Large currently under construction.

“We think there’s a lot of opportunity in fixed bottom offshore wind. There’s still work to do to make fixed as streamlined, as efficient and as effective as possible. But we do think floating is an important part of the solution, in terms of unlocking projects that couldn’t be done otherwise because of sea-water depth,” says Rogers.

“We are also intrigued by the potential of standardising the manufacturing and construction process for floating projects and are looking to leverage some of the port assets and insights that we have.”

With floating wind, the supporting structure is still in flux and there is an impressive array of solutions under development and deployment. Octopus Energy, in which CPP Investments has invested $1 billion, has just bought a company that develops triangular steel floating wind submersible platforms. The Provence Grand Large project uses a very different triangular steel floating wind submersible platform, while the 118MW Hywind Tampen turbines are placed on massive concrete spars.

“This may never be a case of one size fits all”, says Rogers. “We don’t think there’s a single right floating construct. As we look at projects around the world, there are different wind and wave conditions. Different floating turbine combinations will work best under different conditions. Therefore, we think it’s important to have a technology-neutral process.”

Global thinking

Reventus is launched with a global mandate, but not all regions will get equal focus. “If you think about our core markets, offshore wind is needed in Europe and North America. I think Australia was a bit more opportunistic based on liking the opportunity there and seeing the chance to build something – and it’s a market where CPP Investments has a lot of experience in investing in infrastructure projects.” The LP, through its portfolio company Pattern, made early forays into Japan offshore, and Rogers confirms that Reventus is looking elsewhere in Asia too.

The deciding factor includes careful consideration of the available physical support structures, particularly on the port side.

“We’ve already announced that we’re going to be bidding into the Celtic Sea option [via the Gwynt Glas OWF], so understanding how we would work with the right ports to be able to deliver that project has been an important part,” he says. CPP Investments is a shareholder in Associated British Ports which is already preparing selected ports for offshore wind.

“Similarly, when we were bidding on the Californian seabed lease, we had to understand the port capacity down the Western US Coast to develop the project. Obviously, the market is much more nascent there,” he says. “We’ve looked at some schemes where along with investing in the project, you’d also need to invest in the port.

“Offshore wind has a really important role to play [in the energy transition], particularly for countries that have a shortage of land for onshore renewables and/or load centres near the coast,” says Rogers. “A good example of that for me is Australia, where there’s lots of great onshore solar and wind potential. But if you consider the challenges of getting that energy to parts of the coast [where it is needed], offshore wind makes a lot of sense.”

And, as is the case for most other energy transition subsectors, offshore wind is not a place for the complacent investor, according to Rogers: “It’s not a place for passengers. There’s a lot of complexity in offshore wind. And I think it’s important to have experience, to have the right partners, and be backing the right team. So, we’re very happy with the Reventus team, our current partners and are actively exploring other partnership options.”