In the past few years, Canada’s leading pension plans have been allocating more and more investments abroad to port and other infrastructure projects. One can now add to the list recent forays into offshore wind projects, notably in the United States and Europe.
Late in 2022, in an undertaking that drew strong attention, Ocean Winds (OW) and Canada Pension Plan Investment Board (CPP Investments) announced that their newly formed offshore wind joint venture Golden State Wind was awarded an 80,418-acre lease area by the U.S. Bureau of Ocean Energy Management (BOEM) in the Morro Bay area off the central coast of California.
On that occasion, Bruce Hogg, Managing Director and Head of Sustainable Energies at CPP Investments, was to comment: “We are proud that our partnership with Ocean Winds has earned this opportunity to help accelerate the transition to lower-carbon sources of energy for Californians and, more broadly, to serve as an example for other jurisdictions. This investment aligns well with our efforts to reduce carbon emissions across our portfolio while continuing to deliver strong, long-term risk-adjusted returns for the Fund’s contributors and beneficiaries.”
The lease area awarded, OCS-P 0564, is one of five sites off the coast of California that was the subject of an auction held by BOEM. This auction is particularly notable as it is the first floating offshore wind lease sale in the country. It was also the first offshore wind lease sale of any kind on the US West Coast.
Golden State Wind’s winning bid for lease area OCS-P 0564 was $150.3 million, with OW and CPP Investments each maintaining a 50% investment in the project. When fully built out and operational, the lease area could accommodate approximately 2 GW of offshore wind energy, generating enough energy to power the equivalent of 900,000 homes.
As part of Golden State Wind’s winning bid, OW and CPP Investments committed to investing $30 million in workforce development and supply chain initiatives and to work closely with key local stakeholders to maximize the benefits to California from the emerging offshore wind industry.
The CPPIB joint venture in California was announced just a few weeks after the opening of the Saint Nazaire wind farm off the west coast of France that was also backed by Canada’s pension giant.
In another recent move, the Ontario Teachers’ Pension Plan Board agreed to invest US$1 billion in a joint venture with Corio Generation to develop 14 offshore wind projects extending from Ireland to South Korea. Some are floating and others are fixed-bottom.
