This report gives an overview of our recent activity, covering the period from 1 October 2022 to 31 September 2023, unless indicated otherwise.
Mark Dooley
Global Head, Green Investment Group
Macquarie Asset Management
As part of the world’s largest infrastructure asset manager1, we’re connecting our clients to a compelling range of green investment opportunities and transition solutions, across a breadth of technologies, geographies, and stages of the energy transition.
In doing so, we’re able to mobilise the capital of some of the world’s largest institutional investors behind the transition.
Although global investment in the energy transition surpassed $US1 trillion for the first time in 2022, to meet global net zero targets, the sector requires around $US4 trillion by the end of this decade2. Over the same period, the global capacity of wind is expected to rise from 930 GW to 1,930 GW, whilst global solar capacity is expected to rise from 1,231 GW to 5,868 GW3.
Through our portfolio companies, we’re working to help accelerate deployment and create scale, while seeking opportunities for our clients to access this significant and growing market.
Corio Generation, our specialist offshore wind business, continued to expand its geographic reach during the reporting period by preparing for country first wind auctions in Portugal, Norway and Australia. In October, Corio announced an expansion of its longstanding partnership with TotalEnergies and entry into the US market through an investment in Attentive Energy.
Following our investment in Galehead Development in July 2022, we stepped up our commitment to the US solar market through the acquisition of Treaty Oak Clean Energy in December 2022. Treaty Oak is an end-to-end developer of utility scale solar and battery storage projects, benefitting from its own self-originated pipeline as well as complementing Galehead’s origination and early-stage development work by acting as a late-stage development partner acquiring projects from Galehead and taking them through to ready-to-build. This approach has already proved successful with Treaty Oak’s acquisition and development of two utility-scale solar plus storage projects in MISO-South from Galehead.
Our European solar energy company, Cero Generation secured contracts for two projects in the UK’s latest Contracts for Difference allocation round alongside UK development partner Enso Energy, and commenced a range of new projects, including a country-first that is paving the way for grid modernisation. With its partner Enso Energy, Cero reached financial close on a 49.5 MW/99 MWh battery storage system in South Gloucestershire, UK. Due to be operational in late 2024, this will be the UK’s first co-located solar and battery storage project to feed electricity directly into the transmission network.
In addition to the mature technologies of wind and solar, we’re investing across the next generation of decarbonisation solutions. Our emerging technologies strategy offers exposure to a range of synergistic technologies that are critical to delivering decarbonisation.
This strategy includes investment in batteries, which are essential to delivering reliable green energy supplies that can respond to fluctuations in demand and generation. By 2030, capacity is expected to increase fifteen-fold to 411 GW4.
One year on from creating and launching portfolio company Eku Energy, the business has rapidly established itself with its project pipeline growing to over 3 GWh globally, including 1 GWh in Australia. In June 2023, Eku and partners energised the Hazelwood Battery Energy Storage System (BESS), Australia’s largest privately funded utility-scale battery storage project. Hosted at the site of a retired coal-fired power station, it provides a template for the successful repurposing of thermal generation assets.
Adding to our fast-growing energy storage portfolio, we announced an investment into French battery manufacturer Verkor, in September 2023. The investment will support the development of their first gigafactory in Dunkirk which is expected to have an annual production capacity of 16 GWh.
For many sectors, including shipping, aviation, road freight, agriculture and steel production, decarbonisation through electrification is challenging. With these sectors accounting for around 30% of global carbon emissions, the demand for green fuels is rapidly growing5.
Following our acquisition of BayWa r.e. Bioenergy GmbH, we rebranded the specialist biomethane platform as VORN Bioenergy in February 2023. Since our acquisition, market expansion beyond the company’s German roots has been a key priority. Building on its progression of new projects in Spain and Italy, the business recently acquired Italian developer Alvus. The transaction comes at a time when Italy’s National Recovery and Resilience Plan (Piano Nazionale di Ripresa e Resilienza - PNRR) is expected to increase biomethane production in the country tenfold by 2026 to approximately 2.3 billion m3/a6.
With the green hydrogen market expected to grow to $1.4 trillion per year by 20507, our joint venture with Nobian, HyCC, continues to play an important role in the sector in Europe. Two of its projects, H2-Fifty and H2ermes, were awarded IPCEI grants from the Dutch government during the reporting period.
In July we announced an investment in Atlas Agro, a green nitrogen fertiliser company. Responsible for approximately 5% of total greenhouse gas emissions, the manure and synthetic fertiliser industry emits more carbon than global aviation and shipping combined8. By using green hydrogen in its production process, in lieu of conventional fossil fuels-based nitrogen fertiliser production, Atlas Agro is supporting the decarbonisation of global agriculture, whilst helping boost industry efficiency.
As an active asset manager, we’re committed to supporting the growth of our portfolio companies. We play an active role in securing talent to drive forward the leadership of these businesses and are pleased to welcome new CEOs to VORN Bioenergy, Eku Energy and Calibrant Energy.
All investments overseen by GIG9, whether held on our own balance sheet or by funds managed by Macquarie Asset Management, are subject to our green impact governance approach, which requires that each investment must contribute to one or more of our five Green Purposes – please refer to the green impact governance section of our website for details.
In this section of the Progress Report, we report on our green impact – the contribution of investments to our Green Purposes – in the form of quantitative green impact statements and qualitative Green Ratings, aggregated for our investments. Also, the Green Purposes Company provides its annual commentary on our contribution to the Green Purposes10.
For broader sustainability considerations, we apply Macquarie Asset Management’s approach to identifying and managing Environmental, Social and Governance (ESG) risks and opportunities. This approach considers a broad range of issues, including work health and safety, transitioning our assets towards net zero emissions, stakeholder engagement and many others. Please refer to the MAM Sustainability Report 2023 for further details.
We continue to give the Green Purposes Company an opportunity to provide its annual commentary on our contribution to the Green Purposes.
Our rating approach for the reporting period is consistent and comparable with our disclosures of these ratings last year. Further to last year's report, we have continued to iterate our approach and methodologies for evaluating contributions to the Green Purposes.
The green impact statements below indicate the principal quantifiable environmental benefits arising from our investments into assets and projects described in the Green Impact Reporting Criteria found on our website and from our managed funds’ investments into projects that have reached Final Investment Decision (FID).
The green impact of all our balance sheet and fund assets – whether qualitative or quantitative – is measured by comparing the performance of the project to a defined baseline or ‘counterfactual’: i.e. what would happen in the absence of the project.
Green impact is not reported for projects into which only development funding has been provided, due to the relative uncertainty over potential future green impact. More information on our methodology can be found in the Green Impact Reporting Criteria, a copy of which is published on our website.
We report on the green impact from balance sheet projects as we did in 2022, i.e. those projects where GIG provided binding commitment to make a principal investment at, or subsequent to, the project reaching FID. We also report on the green impact of projects from funds to which the Green Objective applies, as we did in 2022, i.e. those projects that reached FID by 31 March 2023.
Selected totals for data in the green impact statements – the ‘Assured Disclosures’ – in respect of the financial year 2022/23 have been independently assured by Deloitte in accordance with the Independent Limited Assurance Report (found in the links below) and are indicated in the below tables11. The Assured Disclosures are defined in the Independent Limited Assurance Report. The reporting period for the green impact statements is 1 April 2022 to 31 March 2023.
We are aware that Ofgem is investigating whether Drax Power Limited is in breach of annual profiling reporting requirements12. When a report is available, we will review the findings and decide if any action is required regarding amendments to Drax’s estimated lifetime Green Impact reported with the Green Impact statements. A review was conducted in the FY22 Progress Report and can be found here.
A table showing lifetime green impact metrics for Funds can be seen below. Learn more in the PDF below including full green impact statements for Funds, note to the statements and assurance report on the statement.
Lifetime green impact metrics ◊
| Additional lifetime green impact from investments made in 2022/23 | Lifetime green impact from all investments made to date | ||
| MGREF1 | Greenhouse gas emissions avoided (kt CO2e) | 0 | 9,592 |
| Renewable energy generated (GWh) | 0 | 22,138 | |
| MGREF2 | Greenhouse gas emissions avoided (kt CO2e) | 12,233 | 14,577 |
| Renewable energy generated (GWh) | 46,894 | 53,494 | |
| Fund 3 | Greenhouse gas emissions avoided (kt CO2e) | 397 | 397 |
| Renewable energy generated (GWh) | 377 | 377 | |
| Energy Storage Capacity (MW/MWh) | 399.5/613.5 | 399.5/613.5 |
A table showing lifetime green impact metrics for our investments on balance sheet can be seen below. Learn more in the PDF below including full green impact statements for Balance Sheet, note to the statements and assurance report on the statement.
Lifetime green impact metrics ◊
| Additional lifetime green impact for investments made in 2022/23 | Lifetime green impact for investments made to date | ||
| Greenhouse gas emissions avoided (kt CO2e) | 9,516 | 217,516 | |
| Renewable energy generated (GWh) | 16,222 | 599,153 | |
| Energy demand (GWh) | 0 | 3,959 | |
| Materials recycled (kT) | 1,581 | 40,037 | |
| Waste to landfill avoided (kT) | 6,645 | 131,982 | |
| Energy storage capacity (MW/MWh) | 6/13 | 263/553 |
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