Carlyle Launches Renewable-Energy Infrastructure Unit

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Private-equity giant Carlyle Group Inc. is launching a company to develop renewable-power-generation and storage projects in a push to reorient its energy business toward sustainable investments.

Funds Carlyle operates will inject as much as $700 million in the new venture, Copia Power, enabling it to arrange projects worth over $6 billion, according to

Pooja Goyal,

Carlyle’s co-head of infrastructure and head of renewable and sustainable energy. Copia will focus on developing large-scale solar generation projects and battery facilities to store power and distribute it after sunset.

Carlyle has a long history of debt and equity investments in fossil fuels, but now the firm—and competitors like

Blackstone Group Inc.



& Co.—is pivoting to cleaner technologies. The money manager in April disclosed $22 billion of private-equity investments in traditional and renewable energy, representing 16% of total private-equity assets under management.

The initiative is part of a race on Wall Street, as large investment firms bankroll competing power projects amid a national pushto revamp electrical infrastructure. The shift comes as investors clamor for environmentally friendly financial products and as national infrastructure initiatives offer potential opportunities to private-equity firms.

“There is a recognition by these companies that this is a new asset class and that there’s an enormous amount of development prospects out there,” said

Jason Burwen,

interim chief executive of the U.S. Energy Storage Association trade group. “It’s a good time to be a capital provider.”

Carlyle sees opportunity in building clean-power projects for technology companies and others that are setting targets to reduce or eliminate their carbon-gas emissions, Ms. Goyal said. Such projects can be more profitable than bidding on power-supply agreements for regulated utilities that “have gotten so competitive that contracts are short and rates are low,” she said.

Copia will launch with several projects acquired from Omaha, Neb.-based power developer Tenaska Inc., which are slated to produce about 6 gigawatts of clean energy. The startup will also join with Birch Infrastructure to help negotiate future power-purchase agreements with large corporate buyers.

“The biggest opportunity we’re seeing is in large utility-scale developments, to the tune of 200 megawatts to 1 gigawatt,” Ms. Goyal said.

In an interview with WSJ’s Timothy Puko, U.S. special climate envoy John Kerry explains the roles he’d like to see the private sector and countries play in fighting climate change. Photo: Rob Alcaraz/The Wall Street Journal (Video from 4/21/21)

Growth prospects are good in corporate procurement because industrial-scale electricity consumers have just started exploring long-term contracts for clean energy, Mr. Burwen said. Google helped kick-start the process last year, he said, when it pledged to operate 24 hours a day on carbon-free energy by 2030.

Carlyle’s push comes as competitors are racing to build the best franchise in environmental, social and governance, or ESG, investing.

Blackstone, which manages about $649 billion, last year pledged to cut its carbon footprint globally, in part by looking at energy consumption of the companies it purchases. The firm is a big investor in Altus Power Inc., a builder of rooftop solar installations, and made one of the first large private-equity investments in renewable-energy storage last year by purchasing Aypa Power.

Private-equity firms are also facing off against fund-management titans like

BlackRock Inc.,

which has become a large player in global infrastructure, and smaller infrastructure specialists, like Stonepeak Partners, which raised $2.75 billion for a renewable-energy fund this year.

Write to Matt Wirz at

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