New Zealand partners with BlackRock in aim to hit 100% renewable electricity

Sheep graze near wind turbines at the Trust Power’s Tararua Windfarm near Palmerston North, New Zdealand, May 18, 2004. New Zealand’s government said Tuesday, Aug. 8, 2023, it will partner with U.S. investment giant BlackRock in an aim to become one of the first nations in the world to have its electricity grid run entirely from renewable energy. (Dean Purcell/New Zealand Herald via AP)

WELLINGTON, New Zealand  — New Zealand’s government said Tuesday it will partner with U.S. investment giant BlackRock in its aim to become one of the first nations in the world to have its electricity grid run entirely from renewable energy.

The government said it was helping BlackRock launch a $1.2 billion fund to ramp up investments in wind and solar generation, as well as battery storage and green hydrogen. Some of the investment is expected to come from government-owned companies.

New Zealand’s electricity grid already runs off about 82 percent renewable energy after it damned rivers decades ago to produce hydroelectric power. The government said it aims to reach 100 percent renewable generation by the end of this decade.

The announcement comes two months out from an election, with the government hoping to burnish its green credentials. Critics point out the nation’s overall greenhouse gas emissions have barely budged since the government symbolically declared a climate emergency in 2020.

“This is a gamechanger for the clean-tech sector, and an example of the pragmatic and practical steps the government’s taking to accelerate climate action while actually growing our economy and creating jobs,” Prime Minister Chris Hipkins told reporters in Auckland.

Hipkins said the fund would allow New Zealand companies to produce intellectual property that could be commercialized across the world.

“Partnering with, and supporting, industry to solve the climate crisis is a no-brainer,” Hipkins said.

BlackRock released few details about the planned 2 billion New Zealand dollar ($1.22 billion) fund, but did say it would initially target institutional investors. It was the first time BlackRock had launched an initiative of its kind, said Andrew Landman, the head of BlackRock in Australia and New Zealand.

“The level of innovation is far greater in this country than we see elsewhere in clean tech,” Landman told reporters. “We are seeing enormous visionary capabilities out of those investee companies.”

BlackRock said making the grid completely green would require a total investment of about US$26 billion.

BlackRock Chief Executive Larry Fink said on social media that “the world is looking for models of cooperation between the private and public sectors to ensure an orderly, just and fair energy transition.”

David Seymour, the leader of New Zealand’s libertarian ACT Party, said the plan would push up power prices for little environmental gain.

“New Zealanders don’t want to be subject to a ‘world first’ climate change experiment that will mean the government micromanages their lives,” Seymour said in a statement.