Quinbrook infrastructure partners is a venture capitalist who oversees the investments of several corporate investors. Quinbrook managed funds invests in a wide range of portfolio companies and projects in the US, UK, and Australia, including utility and distributed scale wind power, solar PV, battery storage, embedded networks, grid supporting flexible power solutions, Virtual Power Plant portfolios, and related smart grid projects.
Quinbrook infrastructure partners are value-added investment management that focuses on originating, acquiring, constructing, operating, and managing direct investments in low-carbon and renewable energy infrastructure assets and enterprises.
What are the dangers associated with renewable energy equipment?
Forget about renewables for a while; investing in energy supply assets in power markets. Furthermore, power markets are becoming more commoditized. As a result, one is in an exposed commodity position, and one’s at danger of the price of electricity falling significantly in future at some point. Because this is a substantial risk that is difficult to prevent, one must acquire long-term contracts and maintain a strong competitive position.
The second is the risk of implicit redundancy. Today’s solar module will not be as good as tomorrow, nor will it be as inexpensive.
DOES ONE HAVE TO DRAW A LINE BETWEEN PROFITABILITY AND SUSTAINABILITY?
It is not in their business. They have created jobs, reduced carbon emissions, provided local community benefits, and made money for their investors for nearly three decades. For them, there has never been the right choice between producing something sustainable and making money.
Their investors have always gotten a profit from them. And they have always had the advantage of achieving incremental results. The difference is that they are forensically measuring it and reporting it to their investors because they are curious.
HOW ELSE ARE SHAREHOLDERS INVOLVED IN DECISION-MAKING?
Some more than others, but all are increasing at a rapid rate. They were writing responses to pro forma queries regarding ESG and environmental policies that they had authored unilaterally but were not questioned three years ago. However, investors are beginning to establish a unified terminology around managing ESG and sustainability strategies. They get inquiries regarding the policies and procedures during the diligence period when they are selling a fund and regularly from existing investors.
WHAT IS THE ATTRACTION OF RENEWABLES INFRASTRUCTURE?
When businesses build investments from the ground up, the company has more control over the value of essential inputs such as site and equipment selection, procurement, and critical development decisions. As a result, one can avoid paying a premium for access to asset opportunities to others.
The risk of overpaying for an asset in an acquisition – particularly in a competitive auction – is substantially lower than the risk of failing to complete a project. The diverse greenfield strategy has consistently delivered returns that are superior to those seen in the M&A market.
They use the analogy of making a cake to describe it. One knows what goes into it and mastery of baking, so it has a better idea of taste. One can, for example, choose to employ tier 1 equipment or lower-quality equipment and cut corners.
If one thinks long-term, as they do, one will invest in top-of-the-line equipment that will last. That results in a higher-value project, whether one keeps it, sells it, or generates revenue from it. Therefore, it believes in starting from the ground up and building it.
