“There are a lot of deep pools of capital around the world but I think there is also a very strong desire, particularly from large organisations who want to contribute to addressing climate challenges,” he said.
Edirisuriya said ESG was gaining more and more traction in the world of investment.
“The focus on ESG is far greater than it used to be,” she said.
DLA Piper’s report said throughout 2022/2023 the firm saw consistent growth and increased interest in companies with underlying renewable assets.
“And there’s sustained high demand for quality secondary renewable sector portfolios, particularly for portfolios with operating assets, burgeoning under an Australian government focused on renewable energy and refreshed federal policies on emissions,” it said.
“New Zealand is seeing an increased demand for investments in renewable assets for similar reasons,” it said.
DLA said renewables, as a sector, had remained buoyant while other sectors were slowing.
In New Zealand, recent investments in the renewables sector have focused on early-stage development projects.
“The number of operational renewable assets available for sale is still comparatively low in New Zealand, predominantly down to the majority of the developed large-scale assets being state-owned and the number of developed large-scale assets being limited.
“This is likely to change as more large-scale renewables projects are developed.”
High commodity prices have strengthened the balance sheets of energy and natural resources businesses – like oil and gas companies – that don’t need bank debt to finance M&A transactions, it said.
“We’ve seen these businesses increasing activity in the renewables space to diversify their energy portfolios.”
Contact Energy in New Zealand has invested significantly in renewables, with a new $300 million geothermal power station at Te Huka providing 51.4 megawatts from late 2024 and Tauhara station opening in late 2023 for 168MW.
Contact also entered a joint-venture agreement with Lightsource in 2022 to develop up to 200MW of solar energy generation.
The generator-retailer is also investigating a pipeline of flexible and low-cost wind projects with Roaring40s - a consultancy.
DLA noted that late in 2022, global investment giant BlackRock invested in two early-stage green technology companies: Australian battery storage developer Akaysha Energy and New Zealand virtual battery storage and energy services provider solarZero.
The firm noted growing activity in offshore wind projects in Australia and New Zealand.
The Bass Strait area off Gippsland has been declared Australia’s first offshore wind region.
In New Zealand, investments in wind to date have predominantly focused on onshore wind farms, with 17 currently operational and more in the pipeline, such as Meridian’s Turitea wind farm.
The firm noted early interest in offshore wind projects, such as the Taranaki Offshore Wind Project, a joint venture between NZ Superfund and Copenhagen Infrastructure Partners.
In New Zealand, investment in battery energy storage projects is growing. The recent investments have been predominantly by existing players in the New Zealand energy market.
DLA Piper said it expected New Zealand’s renewable energy and broader sustainability sector to grow, especially in the context of the Government’s climate target of carbon neutrality by 2050.
Investment in onshore and offshore wind is expected to increase, and interest in solar energy is already significant.
“New Zealand’s untapped resources would allow it to meet its carbon-neutrality target three times over – all that’s missing is the investment, and regulatory frameworks that are easier to navigate,” it said.
“We expect investment pathways to become smoother as the sector matures and project structures become more sophisticated,” the firm said.
