Agenda item
Presentation - Renewable Energy Infrastructure Training by Temporis Capital Ltd
Minutes:
The Committee received a presentation from Andres Senouf and Matthew Ridley from the Temporis Equity Infrastructure team which manages a number of private and public renewable energy portfolios across onshore wind, hydro, biomass and solar.
The Committee noted:
- The modern world depends on food, energy and water. The world is facing crises in the availability of these vital natural resources. Temporis' investment philosophy is that the global economy is facing huge structural change across these fundamental sectors. These dislocations are creating excellent conditions for implementing an active investment strategy. Disruptive technology and government interference are creating uncertainty and volatility in global equity prices leading to undiscovered investment opportunities. Climate change, shifting demographics and the pursuit of food-energy-water security present opportunities as well as challenges. Temporis Capital combines financial and sector expertise to take advantage of these opportunities;
- Temporis have a team of over thirty investment professionals with combined experience of over 170 years in renewables and over 400 years in financial services. Temporis feel that their investment and operational policies enable them to deliver consistent returns for our clients. Temporis see challenges and uncertainty as an opportunity. Their approach it was noted was manage and mitigate it carefully such risks;
- Temporis work to build mutually beneficial relationships with clients and counterparties leads to long term working relationships that they see as core to their philosophy and strengthen their success as a business.
- Cohesive and High Performance Team.
The questions and comments from Members on the report may be summarised as follows
The Committee noted that:
- One of the most important economic benefits of wind power is that it reduces the exposure of fuel price volatility;
- Whilst offshore wind capacity is more expensive than onshore wind there is an expected benefit of higher wind speeds and the lower visual impact of the larger turbines;
- Wind power is one of the oldest-exploited energy sources and today is considered to be the most seasoned and efficient energy of all renewable energies provided by companies such as Siemens a trusted technology partner;
- There is benefit in the amalgamation of several wind farms than investment in the development of a larger new wind farm;
- Temporis are one of the few companies that invest across the supply chain;
- Whilst Temporis will outsource element of the development and running of schemes they have a skilled Asset Management Team who maintain an oversight of the scheme; and
- Whilst solar and wind farms provide a valuable contribution to the National Grid on a daily basis there can be fluctuations. However, there is the ability to use gas/nuclear to address such fluctuations.
Andres Senouf and Matthew Ridley were thanked for their presentation.
The Chair Moved and it was:-
RESOLVED
To note the Presentation.
The Chair gave a quick update on the Infrastructure training he attended, which was organised by LGA (Local Government Association) & SAB (Scheme Advisory Board):
- Pension funds are trying to diversify their portfolios and to enhance their long-term asset-liability management with infrastructure assets.
- There is an appetite for infrastructure projects with local government schemes to increase their investment in infrastructure;
- Infrastructure is an asset class that can help preserve capital, deliver diversification and potentially generate stable cash flows;
- Infrastructure (i) Provides a stable long term cash return; (ii) there are many projects within the UK that are significant in terms of scale; and (iii) investment in scheme could be undertaken through pooling;
- Currently LGPS invests just 0.5% in UK infrastructure whilst investment in some non UK pension funds in infrastructure is up to 20%; and
- Greenfield infrastructure investment finances new assets at the construction stage, in contrast to acquiring already-operational “brownfield” infrastructure. This offers investors an early entry [point to ownership of infrastructure, typically at a higher return than brownfield and with a steady yield over the very long term, in return for accepting a degree of execution risk.