‘We don’t need 100 ideas’: Standard Life’s real assets head on regional authorities attracting clean energy investment

Industrial planning is back in fashion, and energy transitions have a lot to do with it. South Korea and Europe have their green new deals. The Aussies have their Future Made in Australia package. China published a green industry vision board earlier this week. America’s IRA, now in flux, was once a poster child of the green industrial renaissance.

In the UK too, green industrial planning is gathering steam. Energy accounts for 51% of the UK’s £718bn infrastructure investment pipeline. Wind energy alone accounts for £136bn.

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Britain’s green industrial blueprint has another key feature – regional growth and planning. Mayoral authorities across the country are expected to play a leading role in attracting and leveraging institutional appetite for clean energy infrastructure.

Standard Life, which manages £317bn in assets, has published new research setting out key expectations from 13 regional mayoral strategic authorities.

The opportunity

Speaking to Net Zero Investor, Standard Life head of real assets Manuel Dusina explained the group’s thinking on what successful regional investment attraction could look like and why that matters for the UK’s energy transition.

“We have a target to originate each year between 50% – 70% assets that are either sustainable or productive”, he says. That target has been met each year.

As a starting point, Dusina notes that the country’s transmission infrastructure has lagged its transition is well documented. This, he says, needs to be at the core of investment planning.

“I think the narrative needs to move from generation only. The UK has enough generation. If you look at the amount of energy produced by renewable sources in 2025 and not used because of curtailment – it would have been enough to power London for 10 months”, he explains.

The bottlenecks, in his view, are more transmission linked than generation driven.

Staying the course

In the buildup to the research, Standard Life says it engaged with mayoral strategic authorities (MSAs) to develop an understanding of their investment attraction abilities. Something the group says varies significantly.

A key recommendation, Dusina outlines, is ensuring policy priorities – clean energy for instance – remain stable. Given long duration investment horizons in infrastructure assets, investors expect MSAs to stay the policy course.

“We need to know what the priorities are. Will these stay in place even if another party comes to power in the next election? This is vital because for investments in productive assets and infrastructure, it takes time to put these together”, he notes.

In turn, staying the course also shifts focus from promises made to promises kept.

“I think what we want to see as a step change is moving from ambition to delivery. We don’t need 100 ideas; we need five well developed ideas with concrete plans to take them forward. Evidence of delivery carriers more weight than ambition”, Dusina adds.

Across party lines

Maintaining energy transition priorities across party lines is easier said than done. Asked about the arguments and narratives that might generate consensus over the issue, Dusina says it comes down to two factors – investment and increasingly, energy security.

“There is nothing more powerful than demonstrating a track record of attracting finance to unlock opportunities in the future”, he reckons.

Moreover, energy security is quickly rising up the agenda. Dusina says demonstrating how renewable energy generation and storage build security will become increasingly vital.

Crowding in

Winning narratives and sticking to policy priorities aside, Standard Life’s research highlights another critical factor – public finance. The UK’s National Wealth Fund and British Business Bank, Dusina views as a way to bring private capital on the table.

“Public finance institutions such as NWF, British Business Bank etc. should catalyse private investment and not crowd it out. They should absorb risks that the public sector is best placed to manage. This investment facilitation through public financial institutions is getting better but needs to accelerate further.”, he says.

Standard Life’s latest thinking brings into sharp focus the interaction between the UK’s energy transition and the government's devolution agenda. In so far as the energy transition has regional implications, its investment appeal will too. In that context, Dusina’s message to regional leadership is three-fold: stay the course, deliver on ambition and crowd in the private tickets.