Nest, the UK’s largest workplace pension scheme by members, announced plans to significantly boost its investments in renewable energy infrastructure, through a new partnership with specialist clean energy investor Octopus Renewables.

Nest estimates it will commit around £250 million this year to renewable energy projects, such as solar and offshore windfarms, and as much as £1.4 billion by the end of the decade.

Renewable energy infrastructure is set to be a key focus area in the UK’s long-term decarbonization push. Late last year, UK Prime Minister Boris Johnson unveiled his Green Industrial Revolution plan, including billions of pounds of investments in clean energy projects such as offshore wind and low carbon hydrogen.

Mark Fawcett, Nest’s Chief Investment Officer, said:

“We want to invest in the energy of the future, not the past. The money we manage on behalf of our members needs to provide steady returns for the next 10, 20, 30 years.

“Renewable energy projects are fantastic opportunities. Every new site provides greater energy security, increases potential returns and contributes to tackling the climate emergency. We want to deliver bigger pensions for our members, in a better world.”

Octopus is a specialist clean energy investor, with a diverse portfolio of clean energy assets with a capacity of over 2.6GW. The company is the largest investor of utility scale solar power in Europe, as well as a leading UK investor in onshore wind and biomass.

Stephen O’Neill, Nest’s Head of Private Markets, said:

“Octopus stood out amongst a very strong field of candidates. They’re one of the largest developers of renewable energy assets in Europe, and carefully manage their energy price risk.

“We’ll also have full access to their proprietary deal-flow, across technologies and geography. This gives us confidence that our investment will provide strong returns for our members.”

Alex Brierley, Co-Head of Octopus Renewables, added:

“This partnership will create a strong platform for Nest, covering a diverse range of technologies, geographies and assets across their lifecycle, whether that be at development, construction or operational stages. The fund will also allocate capital to growth opportunities in the wider energy transition.”

Under the new partnership, Octopus will arrange investment deals directly with the owners of renewable infrastructure projects, negotiating bespoke deals so Nest members are suitably rewarded for injecting new funding. The mandate will target deployment into renewable energy projects and associated infrastructure, predominantly in the UK and Europe to support the transition to a net zero economy.

Chris Hulatt, Co-Founder of Octopus Group, said:

“As gatekeepers to trillions of dollars, institutions, including pension funds and their members have a critical role to play in fighting climate change. There is a real opportunity here to help deliver the energy transition, meet net zero targets and shape the Green Economy – creating a meaningful impact that Nest’s members can be proud of.”