Octopus Investments Australia, a subsidiary of the major UK-based Octopus Group, has revealed the next projects it plans to bring into its investment platforms, the first of which is the nearly-completed 180 MW Dulacca Wind Farm in southwest Queensland, which hosts some of Australia’s largest wind turbines. The 43-turbine project is backed by a 70% offtake deal with the Queensland government.
The next projects to be folded in are proposed hybrid projects, the Fulham project in southeast Victoria and Blind Creek in southeast New South Wales, near Canberra.
Fulham is set to include an 80 MW solar farm coupled with a 120 MWh battery, while the agrisolar Blind Creek project will have up to 350 MW (AC) of solar and nominally a 300 MW / 600 MWh battery.
In an update video, Darren Brown, Octopus’ Co-Head of Investment and Development, noted the company is also working on its first standalone storage asset and hopes to bring that into operation, and the Octopus portfolio, later this year – though that was the extent of the details provided.
All of these projects have or are being developed by Octopus Australia, and it appears that ownership will then pass to investors aggregated by the company’s investment platforms, OREO and OASIS.
Octopus’ OREO and OASIS platforms
To recap, Octopus Australia launched these two platforms mid-2022, one for institutional investors and the other for wholesale investors, to provide funds for a multi-billion-dollar Australian renewable energy portfolio.
The platform for institutional investors, named the Octopus Australia Sustainable Investments (OASIS) Fund, on launch had already secured a $75 million (USD 49 million) commitment from the Commonwealth government’s Clean Energy Finance Corporation (CEFC), as well as from superannuation fund Hostplus and Octopus Renewables’ Sky Fund, backed by European institutional investors.
The second fund, named Octopus Renewable Energy Opportunities (OREO), is aimed at wholesale investors and smaller players. Speaking to pv magazine Australia last year, Managing Director Sam Reynolds explained this platform was developed in response to feedback the company received from “sophisticated investors,” including people with high net worths and family offices, who were eager to invest in renewables.
“Really the only way they could do it was by investing in smaller projects,” Reynolds said. That is, projects sitting around the $20 million mark – and since renewable projects are all about scale, it meant these investors missed out on the juiciest morsels. OREO, Reynolds said, is Octopus’ answer to this conundrum. “It’s an institutional style product but for wholesale investors,” Reynolds said. The minimum ticket to invest in the OREO fund is $25,000.
The investors participating in both the OREO and OASIS funds are then aggregated to create a large pool, which Octopus uses to acquire projects and generate returns.
Key to this is Octopus’ vision of expanding past single-project investments, and instead using the funds to build a diversified portfolio of projects, including large-scale wind, solar and storage.
Generally investors in Australia have put funds into single projects, Reynolds said, “and there’s not much you can do with that site for 35 years.”
“We see that as an okay way to play in the renewable energy space, but we think it’s better to have a portfolio – and that’s what the platform is, a portfolio of assets – wind, solar and storage – that look after the fluctuating nature of renewables but also the fluctuating nature of the daytime energy prices.”
In other words, it leans into the concept of power in diversity, diversifying both its pools of potential investors and the types of renewable projects it holds.
The investment platforms finance the entire renewable energy life cycle from development, through construction and into long-term operations.
Currently, the platforms’ cornerstone asset is the 333 MW Darlington Point Solar Farm, Australia’s largest operational solar project. Located in the south east of NSW, Octopus previously jointly held Darlington Point Solar Farm with Edify Energy before it used the OREO and OASIS funds to acquire the project in its entirety last year.
Darlington Point recently secured second offtake agreement with Smartest Energy Australia, owned by Marubeni – one of the largest infrastructure investments. Smartest Energy has agreed to offtake 25% of Darlington Point’s output, meaning the project is now contracted for 80% of its generation.
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