By Harriet Dennys, Financial Mail on Sunday, 18 January 2020
‘The protesters from Extinction Rebellion have a point – I was tempted to join them.’
Mike Bonte-Friedheim is not your typical eco-warrior. The former Goldman Sachs banker spent Christmas in St Lucia with his family (he offset his carbon emissions, he tells us), drives a BMW and has homes in both London and Majorca.
But his solar energy group, NextEnergy Capital, is one of Europe’s biggest investors in solar projects, with $2.3billion (£1.8billion) invested – and the City is finally starting to fall in line with his lucrative brand of climate change evangelism by switching investments from fossil fuels to renewable energy.
On the day we meet at Bonte-Friedheim’s third-floor Mayfair office, which gave him a ringside view of Extinction Rebellion’s latest London protests – ‘I was tempted to join in’, he says – the world’s biggest asset manager, BlackRock, said it will no longer actively invest in major coal producers.
BlackRock’s co-founder and chief executive Larry Fink said his £5.7trillion giant will instead increase the money it invests in sustainable firms from £68billion to £760billion.
The billionaire’s conversion followed Bank of England governor Mark Carney’s warning to City chiefs last month that some of their assets would become ‘worthless’ unless they woke up to the climate change crisis.
‘There will be trillions of dollars invested in solar over the next ten, 20 years,’ predicts Bonte-Friedheim, who founded NextEnergy 13 years ago. It’s a bold claim, but perhaps more believable after last week. The changing mood now sweeping City circles is clearly music to his ears.
He says the interventions were ‘hugely significant’ – and not just because a four-degree Centigrade rise in global temperatures would put the Caribbean hotel he stayed at over Christmas ‘nine metres under water’.
‘It is fundamental that high-profile market participants, such as Larry and Mark, put that message out very clearly. Because to rapidly effect change we need to deploy capital for renewable energy and other carbon reducing investment strategies,’ Bonte-Friedheim says.
Scandinavian investors, such as Norwegian pension fund KLP, are ‘really pushing’ to invest in his group’s 90 solar assets while funds in the UK, the US and Europe are ‘well behind’.
‘To make the climate change crisis clear to financial decision-makers, we need society to say, ‘You’re managing our pension money, do something’,’ he adds.
Whatever your views on climate change, the 53-year-old has clearly identified a major opportunity ahead of the curve and staked his career on it.
Bonte-Friedheim was born in Kenya before his family moved to Rome for his German father’s job. After completing an MBA he worked on the energy advisory desks at Credit Suisse, Morgan Stanley and Goldman Sachs. He launched Next-Energy using savings from his investment banking career.
He says he is now a committed environmentalist who partly powers his West London home by solar panels and Tesla battery storage that charges overnight from the National Grid (his favourite band, he confides, is the aptly-named Australian heavy metal group AC/DC).
‘I’m living the strategy,’ he beams. That strategy has been to invest in solar energy projects across the UK, Italy and, more recently, the US. The investments are held across three funds that are backed by pension funds and wealth managers, including Fink’s very own BlackRock.
Investors in the flagship FTSE 250-listed NextEnergy Solar Fund receive dividends from profits made by selling the electricity generated by the solar assets to suppliers including Shell, EDF Energy and Centrica.
Over the six months to September 30 last year, NextEnergy Solar Fund generated enough electricity to power 134,000 homes, equivalent to Bradford and Bournemouth combined, producing a 6.7 per cent shareholder return.
Its profits are boosted by taxpayer-funded subsidies. NextEnergy Solar Fund received £45.3million of incentives over the year to March 2019 through Feed-In-Tariffs and Renewable Obligation Certificates.
But the costs of building solar plants have reduced by 90 per cent since NextEnergy launched in 2007. Bonte-Friedheim says his firm’s solar projects are now ‘financially viable’ without subsidies.
Last year, the group opened its first two subsidy-free solar plants, Hall Farm II in Leicestershire and Staughton in Bedfordshire, the UK’s largest subsidy-free solar plant.
He says increasing numbers of Britons will lead sustainable lives through switching to renewable energy suppliers, driving electric and hybrid cars and installing electric boilers to heat their homes. ‘I call it the electrification of GDP.’
Bonte-Friedheim hopes to double his group’s assets under management to $4.6billion in three years, and says revenues will double too.
A recent study by Professor Christian Breyer of Finland’s Lappeenranta University predicts solar will generate 69 per cent of global electricity supply by 2050 – the Government’s deadline for the UK achieving zero carbon emissions.
In the meantime, he wants the Government to ‘not put sticks in our spokes’ by hampering his firm with regulation.
He says: ‘The way I often describe my policy requirements is I just need governments not to impede us – just get out of my way. ‘Because economically I can make solar work. I don’t need your help, I don’t need cash from you. I just need you to make our life easy so we can build as much solar as possible.’