PAUL MCBETH: Trying to Bloom when others survive

Paul McBeth is the editor of The Bottom Line and Curious News, and previously worked at BusinessDesk for 15 years.

Even the best investors can lose patience when a promising proposition takes an age to show proof of concept, just ask the New Zealand Superannuation Fund.

The Guardians of New Zealand Superannuation – which oversees the $90.84 billion, and growing, earmarked to partially pay Baby Boomers’ pensions – was dead keen on cleantech firms and alternative energy long before the sneering “Go woke, go broke” mantra started accompanying any idea that a mythical chardonnay-swilling do-gooder might approve of.

And the investment case stacked up for a fund manager that consistently beat its benchmark and won global accolades for its performance to allocate a small portion of its portfolio to private alternative energy firms that could deliver outsized returns if their theses came true.

That saw the fund invest in the likes of Kiwi-born carbon recycling firm LanzaTech, wind turbine developer Ogin, smart-glass maker View, fuel cell manufacturer Bloom Energy, and US renewable energy developer Longroad Energy.

And to be clear, it wasn’t just your so-called green energy bets that the Super Fund was making, with private equity giant KKR getting a mandate to invest in North American shale oil and gas developments that helped turn the world’s biggest economy into a net exporter of energy through the 2010s.

I’m just roaming for the moment

After all, the Super Fund hit paydirt alongside Infratil in the 2009 purchase of Shell’s local petrol station chain, followed soon after by its rebranding as Z Energy and an initial public offering in 2013, with the pension fund pocketing $1.1 billion from its $210 million outlay.

Not all of its energy plays were quite so successful.

The Super Fund wrote off the Ogin stake in 2017 when the wind turbine maker failed to raise enough money, and it exited View in 2023 after the glassmaker went public through a special purpose acquisition company listing by Howard Lutnick’s Cantor Fitzgerald a couple of years earlier, which left a bitter taste in a few people’s mouths and an US$11 million settlement.

The pension fund is still picking LanzaTech to turn things around, taking part in a US$20 million capital raising earlier this year as the carbon management firm eyes a bigger funding round to keep the lights following a wide-ranging restructuring.

Meanwhile, it pulled the pin on Bloom, booking a loss on the fuel cell maker when it sold out after a 2018 IPO when the hype over another cleantech firm was overwhelmed by sceptics on its ability to deliver cheap energy with lower emissions.

I heard you cryin’ loud

Point proved that cleantech and green energy is rubbish and old-fashioned oil is still black gold, right?

Not so fast.

We’ve all seen the runaway success – with a few speed bumps on the way – of Longroad through Infratil’s stewardship of the renewable developer, and no-one would accuse its manager, Morrison, of being anything other than a factory to print money.

And the Middle East conflict snarling up global oil supplies hasn’t done carbon recycler LanzaTech any harm, with the Nasdaq-listed shares surging 82% in March and another 70% so far this month to close Friday at US$27.15.

Bloom has been a different story again. It survived a short-selling assault led by the now-defunct Hindenburg Research in 2019 that pushed the stock below US$3 a share to emerge as a winner in the insatiable energy demand to drive artificial intelligence, with Brookfield last year agreeing to invest up to US$5 billion to use the company’s fuel cells at new data centres.

The stock surged 291% in 2025 and is up another 92% so far this year, closing on Friday at US$166.70, valuing the company at US$46.77 billion.

That’s not a criticism of the Super Fund pulling out and putting its money to work elsewhere – it continued to outperform its benchmarks with a 10.2% annual return since inception.

You can’t go forcing something if it’s just not right

Hindsight’s a beautiful thing, but nobody predicted an AI boom creating seemingly endless demand for a fuel cell to provide handy onsite generation for racks upon racks of power-hungry servers.

Still, the question of energy investments – both fossil-fuelled and renewable – is instructional as we ponder the wider policy to firm up the nation’s resilience beyond simply beefing up our diesel storage at Marsden Point and an increasingly uneconomic-looking liquified natural gas import terminal seen as a way to mitigate the dry-year risk to our hydro-powered system.

As one of my old mentors at BusinessDesk, Pattrick Smellie, pointed out last week, energy security trumps everything as the lifeblood that drives a modern economy.

He was enamoured by the recent Sustainable Business Council report urging policymakers to turbocharge the electrification of the economy to help preserve domestic manufacturing, which has been shutting factories at a rapid clip in recent years as firms bemoan the price of power they face.

Especially given it would remove the still-fraught climate argument from the simple need to preserve skills, capability and actual industry in an increasingly isolated nation at the bottom of a less globalised world.

That should be an opportunity, not just a cost.

No time to search the world around

Everyone needs to play their part, and a key issue raised in the weighty Frontier Economics report on New Zealand’s electricity market last year was policy uncertainty.

Funnily enough, investors weren’t overly enamoured by the ban on offshore oil and gas exploration, which encouraged existing players to pare back their local footprints, while the prospect of a giant pumped hydro scheme froze plenty of plans for new generation plans as developers weighed up the worth of proceeding.

It’s all well and good to build new renewable generation, but there will be a longer transition period than people realise to get heavy industry to switch to electric-powered processes from their gas- and coal-powered equipment.

Frontier favoured the government taking on all the thermal-powered generation to carry the dry-year risk, something the Beehive wasn’t keen on as it promised to back new generation plans from the three electricity generator-retailers it controls and investigates an LNG import terminal to act as an insurance policy for when the rain falls in the wrong places.

That LNG terminal is looking shaky as the Middle East conflict triggered a spike in global prices, presumably sending the boffins back to the drawing board, and those West Coast coal mines owned by the likes of Bathurst Resources are looking pretty useful in firing up the economy when the hydro dams are quiet.

Even so, the broader electrification programme is carrying on at pace.

The big four gentailers’ new generation programmes account for more than half of the 27,800 megawatts waiting to be developed.

And we’ve seen the emergence of plenty of smaller players keen to tap into those renewable programmes, primarily with designs on winning the battle to be the best solar player – it’s hard to miss the All Black troika of Barrett brothers and their father Kevin, also no slouch on the rugby field, fronting Lightforce Solar’s push into the public consciousness with a high-billing in the current TV ad rotation.

If electricity ends up powering an ever-growing share of transport, industry, households and businesses, it just makes sense for the money to flow into those various ways to generate and get it from A to B.

Not every local company is going to land on its feet in the same way Bloom Energy found a fellow traveller in the form of AI, but the electrification of everything shouldn’t be mistaken for high-minded idealism when billions of dollars are being invested and billions more are still to be made.

 Image from Markus Spiske on Unsplash.