I Squared Capital is set to deploy $500 million over the coming years into a new European renewables platform, as it looks to take advantage of a significant wind repowering opportunity on the Continent.
The Miami-based manager has established Cube Green Energy, a platform designed to develop, repower, construct and operate wind and solar farms, as well as invest in battery storage and clean hydrogen, it said in a statement. While there is no fixed allocation to each segment, I Squared managing partner Gautam Bhandari said a significant focus will fall on the wind repowering opportunity in mature European markets, particularly in Germany.
“A lot of progress is being made in offshore wind and that will continue, but there is a forgotten resource, which is older wind farms built 20 years ago,” he told Infrastructure Investor. “Those are coming to the end of their lives and it would be a pity to waste that resource.”
Bhandari estimated that Europe has about 35GW of existing wind power over 15 years old, with about 15GW in Germany alone. Technological improvements since they were built could significantly improve their efficiency and capability, Bhandari added.
“New wind turbines are almost three times more efficient than older turbines,” he explained, adding there were also significant cost efficiencies involved.
“A lot of the cost of a wind project is getting the transmission connection and building access infrastructure to the site. Although we have to go through a re-permitting process, there is still significant cost savings. Importantly, older sites have excellent wind data collected over 15-plus years. Very few countries in Europe are adding new onshore wind MWs. For many countries, land is a limited resource and a lot of the good sites have already been developed. It makes a lot of sense to update that older wind farm and doing that is a lot cheaper than offshore wind, which is almost quadruple the cost of onshore wind. In the end, consumers are better off and that is critically important if we want higher penetration of green energy.”
Cube Green Energy will be led by chief executive Raghuveer Kurada, previously managing director at GE Energy Financial Services. He has been joined by managing directors Sharad Jain and Niko Meissner – who have joined from GE Capital and Aquila Capital, respectively – while Hussain Shalchi has joined from Orsted as chief operating officer.
The creation of Cube Green Energy is thought to be the ninth deal from the firm’s ISQ Global Infrastructure Fund III, launched last year with a $12 billion target. Other deals include the just-announced majority stake acquisition in Australian organics recycling firm SOILCO, the investment in Singapore-based AG&P City Gas, the acquisition of KIO Networks, a data centre and digital infrastructure services provider in Mexico and Central America, and the creation of Ezee Fiber, a platform to invest in fibre networks in the US.