‘We would rather build,’ says Carlyle, launching a European renewable energy developer

Carlyle Group Inc, a private equity firm, has formed a unit to build solar and other renewable energy plants as part of a push to build infrastructure to address the global shift away from climate-warming fossil fuels.

Carlyle did not say how much it expected to spend to reach the new unit’s target project pipeline of 10 gigatonnes by 2030. Since late 2018, the company claims to have invested approximately $1.2 billion in renewable assets.

Competition in renewable energy heats up

Infrastructure funds have been investing in low-carbon energy generation for years in order to generate consistent returns. As competition heats up, those organizations are investing in projects in their early stages in order to develop them.

The company would rather build, said Pooja Goyal, chief investment officer at Carlyle Infrastructure.

They did not simply acquire an existing platform or portfolio. But their statement is that they believe the best risk-adjusted approach is to build a platform that will deliver these projects from the start.

Applying renewables wherever possible

Carlyle Infrastructure manages $15 billion in assets in the power, energy, transportation, digital, and water sectors.

Last year, Australia’s Macquarie Group Ltd launched an offshore wind farm developer, and Carlyle soon followed with a U.S.-focused renewables business.

Telis Energy will concentrate its efforts in Europe on the United Kingdom, France, Spain, and Germany.

Goyal stated they are absolutely looking to partner with local developers or potentially acquire some development platforms.

In much of the world, producing power from low-carbon sources is less expensive than producing power from fossil fuels, but the financial models underpinning investment in renewables sites have shifted due to rising material and logistics costs exacerbated by COVID-19 and Russia’s invasion of Ukraine.

There are supply chain constraints. They are exacerbated by the pandemic. The other factor is the rapid growth of renewables. Goyal believes the company needs significant investment in supply chains.