Episode 151 · 2022-09-04 · 23:33 · Original in Finnish
Investing in Renewable Energy | Jussi Lilja and Otto Pöyry | Negotiator 151
Originally published as “Sijoittaminen uusiutuvaan energiaan | Jussi Lilja Otto Pöyry | Neuvottelija 151”
Jussi Lilja and Otto Pöyry of Korkia explain why their fund invests at the project development stage rather than in finished power plants, where institutional money is already crowding in and return expectations have fallen with it. The episode covers the roughly 95 per cent collapse in solar panel prices, the logic of industrial scale, the role of a local partner in every market, and why subsidy is now read as political risk rather than as an advantage. There is a concrete example from Spain, where a single plant gave rise to a local maintenance company. It closes on whether energy infrastructure is becoming an asset class alongside equities, fixed income and real estate.
Core theses
- Returns in this sector have moved to project development, because that is the stage institutional capital has not yet competed away.
- A 95 per cent fall in panel prices is what turned solar from a subsidy case into a market one, and it is the episode's load-bearing number.
- Subsidy is now treated as political risk: a project that needs it is exposed to a decision nobody in the deal controls.
- Infrastructure becoming its own asset class is the structural claim here, and it is what would change how institutions allocate rather than what they buy.
Watch and listen
Key moments
- 00:00 — The guests, and the commercial collaboration with Korkia
- 00:16 — Where the name Korkia comes from
- 00:55 — Backgrounds at Fim, and the lessons they brought
- 01:30 — How the electricity price has moved in Finland
- 01:56 — What renewable energy means in practice
- 02:32 — Solar panel prices have fallen 95 per cent
- 03:08 — Building a plant is fast and standardised
- 03:33 — The value chain, and the fund's place in project development
- 04:13 — Institutional money and falling return expectations
- 05:12 — An international portfolio and more southerly latitudes
- 05:53 — Industrial scale and maximising grid capacity
- 06:49 — A local partner in every market
- 07:41 — Spreading risk, and why the pipeline matters
- 08:42 — Capital calls and drawing down commitments
- 10:06 — ESG, the taxonomy and footprint
- 11:41 — The Spanish plant and the local maintenance company
- 13:24 — Fund size and the institutional investors' share
- 15:07 — Consulting expertise under the same roof
- 16:31 — Solar and wind in the same fund
- 17:22 — Permitting is faster for solar
- 18:07 — The history of wind funds, and subsidies
- 19:12 — Standing on market terms without subsidy
- 19:27 — Grid capacity and batteries in the plans
- 20:50 — Storage and the role of balancing power
- 21:30 — Infrastructure as an asset class of its own
- 23:19 — Closing and thanks
Summary
Jussi Lilja and Otto Pöyry of Korkia explain why their fund invests at the project development stage rather than in finished power plants, where institutional money is already crowding in and return expectations have fallen with it. The episode covers the roughly 95 per cent collapse in solar panel prices, the logic of industrial scale, the role of a local partner in every market, and why subsidy is now read as political risk rather than as an advantage. There is a concrete example from Spain, where a single plant gave rise to a local maintenance company. It closes on whether energy infrastructure is becoming an asset class alongside equities, fixed income and real estate.
Investing one stage earlier
The fund’s whole position rests on a claim about competition: institutions have arrived at operating plants, which is exactly why the returns there have compressed. Moving upstream into project development buys a risk most institutional mandates cannot hold, and that is where the premium is. Whether one accepts the premium as adequate is the question the episode leaves open.
The number under everything
Panels cost about five per cent of what they once did. That single collapse is what turned solar from a policy project into an industrial one, and it is why the conversation about subsidy has inverted — support is now a liability to be avoided rather than a reason to build.
Spain, and what a plant leaves behind
The most concrete passage is a single Spanish plant that produced a local maintenance company around it. It is a small example and it answers a real question: what a renewables investment leaves in the place it is built, once the construction crews have gone.
Watch
The recording lives on the Neuvottelija channel: Sijoittaminen uusiutuvaan energiaan | Jussi Lilja Otto Pöyry | Neuvottelija 151. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Jussi Lilja, Otto Pöyry