The world’s largest asset manager has a new multibillion-dollar renewable energy fund in the works, and a good chunk of it may go to batteries.
Looking out over the next few years, energy storage is one market “where we’ll see the opportunity set expand,” said Martin Torres, head of the Americas at the renewables group within BlackRock Real Assets.
BlackRock shook the financial universe this month when CEO Larry Fink said the company will put sustainability at the “center” of its investment approach. Exactly what Fink’s announcement will mean for BlackRock’s fossil fuel investments remains to be seen. But in the realm of renewables, at least, BlackRock’s green bona fides need little burnishing.
Since 2011, BlackRock claims to have channeled $5.5 billion into more than 250 wind and solar projects around the world, a fleet that generates enough power to keep the lights on in Spain. And its appetite for renewables investment keeps growing.
BlackRock’s first renewables private-equity fund drew around $600 million of commitments from big investors. The second, launched a few years later, brought in $1.65 billion. With its third “vintage,” known as the Global Renewable Power III fund (GRP III), BlackRock is targeting $2.5 billion of commitments; in December it announced a record $1 billion “first close,” meaning the fund can begin making investments even as it continues to bring in more capital.
Onshore wind and utility-scale solar will remain core investments for GRP III, with a growing focus on repowering aging wind projects. But BlackRock is also keeping a close eye on the rapidly expanding U.S. energy storage market, Torres said. “As we think about the opportunity set for GRP III, we see more and more opportunity for battery storage,” Torres said. That means distributed or utility-scale storage projects, and both standalone facilities or those coupled with wind or solar farms.