Accelerating the future of UK energy

Macquarie has been investing in new solar capacity by creating, acquiring and investing in development companies and financing rooftop and utility scale projects. This includes Cero Generation¹, a leading utility-scale solar developer headquartered in the UK, working across Europe with local development partners to support the transition to net zero.

Launched in 2021, Cero Generation is the home of one of the largest solar development portfolios in the UK. This includes the Larks Green Solar Farm, a 50MW UK-based subsidy-free utility-scale solar PV project, located in South Gloucestershire.¹

In 2017, Macquarie Capital’s Principal Finance team supported the UK’s largest social housing rooftop solar PV rollout, participating in development through to operation with over 13,000 systems installed.

Moreover, our asset management business supports a joint venture with the UK Government, known as UK Climate Investments (UKCI), which has invested £200 million from the UK Government's International Climate Finance funding to support renewables projects in emerging economies.

1. Cero Generation, 2022. Cero Generation is an independent portfolio company of Macquarie Asset Management’s specialist Green Investment team, operating on a stand-alone basis.

Our Commodities and Global Markets (CGM) business works across the UK energy system, working with power generators and upstream producers, refineries and processing plants, large industrial energy users, as well as suppliers and distributors across the country. CGM’s role is to help clients navigate price volatility across a variety of markets, including carbon, gas, liquified natural gas (LNG), power, crude oil and fuels, and biomass.

CGM is adding other products to our traditional risk management services that allow our clients to better navigate working capital and liquidity, as well as credit constraints.

Recently we have seen increased client demand in the UK for hedging solutions and access to the market for independent producers.

We also supply gas and energy to more than 13,000 small and large customers in the UK through our leading UK independent commercial energy supplier, Corona Energy. It supplies 14 per cent of the UK’s industrial and commercial gas market – more than any of the UK’s six largest energy suppliers.¹

1. Q421 Business Gas Market Share Survey data and commentary for 31 October 2021.
   

To meet the UK’s 2050 net zero target, it is estimated that the proportion of intermittent wind and solar capacity in our generation mix will need to increase to almost 60 per cent by 2030.¹ Battery storage provides grid operators with the tools and flexibility to deal with this increased variability of supply and finely match it to demand.

In 2021, we announced its investment in a 187MWh portfolio of new battery storage capacity across the UK, which includes sites in Scotland and South East England.

We also entered into a joint development agreement with Bluestone Energy to develop up to 2GW of UK battery storage projects. Projects representing 1.3GW are already in early-stage development, having secured grid connection offers, with the pipeline continuing to grow steadily.

Our global efforts to support energy grids have been enhanced through the launch of Eku Energy, a new global specialist battery storage business, headquartered in the UK. Eku Energy’s initial portfolio brings together our existing battery storage activities in the UK, Australia, Japan and Taiwan.

Our Commodities and Global Markets business is also a funder and supporter of smart energy, with more than one in six homes in the UK benefiting from a Macquarie-owned meter, of which more than two thirds are now smart.²

1. From a current baseline of c. 40 per cent. Fitch Solutions Analysis, 2021.
2. Data as at 30 September 2022.

Water companies have a central role in managing our most vital resource, protecting public health and conserving the environment. However, many water companies have struggled to meet the expectations of their stakeholders as they grapple with ageing infrastructure, exacerbated by the impacts of population growth and climate change.

Following several years of underperformance under its previous ownership, funds managed by Macquarie Asset Management took a majority stake in Southern Water in September 2021 and made a series of commitments aimed at improving the company’s operational performance, financial resilience, and relationship with its customers. This included a commitment that Southern Water would invest more than £2 billion in its network during the current five-year regulatory period – equivalent to £1,000 per household – to accelerate the company’s operational transformation and reduce pollution incidents by more than 50 per cent by 2025.

Home internet connectivity and access to fast, reliable broadband has never been more important, but only 70 per cent of UK premises have access to gigabit-capable broadband today. The UK Government’s aim is to increase this to 85 per cent by the end of 2025. Access to fibre-to-the-premises (FTTP) is currently around 30-40 per cent.¹

In 2019, Macquarie Capital made an initial investment in Voneus, a leading specialist in Fixed Wireless Access technology, and has since increased its ownership to a majority shareholding in the business. With Macquarie's support, Voneus is bringing ultra-fast full-fibre broadband to communities that have historically suffered from slow internet speeds, including Buckland Dinham in Somerset and Dunton in South Bedfordshire.

Macquarie Asset Management has also been investing in the UK’s digital infrastructure. In September 2022, Macquarie-managed KCOM announced the next phase of its plan to deliver the UK’s fastest and most accessible full-fibre broadband to communities in Lincolnshire and Hull in East Yorkshire. The new £100 million investment will see KCOM’s fibre network expanded to reach around 350,000 properties. 

1. UK Government Project Gigabit Delivery Plan – Summer Update 2022.

Addressing the undersupply in high-quality, sustainable and professionally-managed rental housing across key regional cities will unlock substantial economic and social benefits for the UK.

Macquarie Asset Management launched Goodstone Living in 2021. This specialist real estate development and investment management business was established to design, deliver and operate the UK’s next generation of rental communities, offering quality homes, bigger spaces and a better rental experience. It also aims to create healthier homes and communities, with a focus on halving operational carbon emissions and significantly reducing embodied carbon at its development projects.¹

These principles are being demonstrated at Goodstone Living’s first sites in Birmingham and Edinburgh.

1. Goodstone Living, 2021.