Abu Dhabi’s Masdar explores up to $1b investment in New Zealand renewables, power prices hold the key

Detailed summary

Renewable energy is now New Zealand’s biggest investment opportunity, says Invest New Zealand Robert Wall. But international investors need greater certainty over electricity…

Renewable energy is now New Zealand’s biggest investment opportunity, says Invest New Zealand chief executive Robert Wall. But international investors need greater certainty over electricity prices before committing billions of dollars to new projects.

New Zealand has attracted the attention of one of the world’s biggest renewable energy investors, with Abu Dhabi’s Masdar exploring an investment of up to $1 billion in wind, solar and battery storage.

The potential investment represents a significant vote of confidence in New Zealand’s energy future. But it also exposes a fundamental weakness in the country’s investment proposition: while there is no shortage of renewable energy projects or international interest, uncertainty over future electricity prices is not making it easy to get projects financed and built.

Wall believes renewable energy is now the country’s largest investment opportunity, as growing electricity demand creates an urgent need for new generation. “We see it as the largest investment opportunity in New Zealand at present,” Wall told the Herald.

The opportunity extends well beyond Masdar. Invest NZ has been working with renewable energy investors from Australia, the United States and Malaysia on potential wind and solar developments, including projects incorporating battery storage.

“The challenge we have in finalising and getting them built is the uncertainty of the power price,” he says.

New Zealand has an increasingly pressing need for new generation. Yet developers face difficulty securing the long-term revenue certainty required to make substantial capital commitments.

Wall says the Government, investors and developers need to work together to address that uncertainty. “It is fundamentally one of the biggest decisions that can impact this economy and the attraction of investment, and therefore the productivity of our country.”

The Masdar memorandum of understanding (MoU), signed with Invest NZ, provides a practical starting point for bringing…

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