The current cost of decarbonising technologies is still high, and therefore highly inflationary, according to Larry Fink, CEO and Chairman of BlackRock, the US multinational investment company that manages over a $1 trillion in sustainable investments.
Speaking at the energy conference CERAWeek by S&P Global in Houston, he said energy gave Europe a “wake-up call” and is now calling for more pragmatism around green investments.
“Everyone talks about the opportunity with hydrogen – we can have blue and green hydrogen but is anyone willing to pay the cost?” he said. “We have to be working side by side in trying to find ways to reduce the cost of wind, solar and other energy sources. Let’s be clear – we’re going to be dependent on dispatchable power for some time.”
While US energy strategies are being worked on by the new Trump administration, China is building 100GW of nuclear power, he added. “We just have to be aware of how the world is rapidly changing. But gas will play a major role in the US for tens of years, maybe 50-plus years.”
He added that while data centres represent 2% of US grid consumption, the figure is projected to rise to 10% to 12% by 2030. Last week BlackRock bought Preqin, a leading independent provider of private markets data.
“At the same time, the opportunities we have in building out carbon capture [are clear] … so when I talk about pragmatism it’s how to solve these problems in a holistic way.”
Fink mentioned Texan energy company Occidental in this respect. BlackRock and Occidental announced a joint venture in November 2023, to develop Stratos, billed as the world’s largest direct air capture (DAC) facility, in Ector County, Texas, which aims to capture up to 500,000 tonnes of carbon dioxide annually. It has also partnered with Nvidia and Microsoft on infrastructure challenges posed by artificial intelligence.
And through a fund managed by its Diversified Infrastructure business, it has signed a definitive agreement to form a joint venture with Occidental through its subsidiary 1PointFive that will own Stratos.
He added that BlackRock would announce more tie-ups in the coming weeks and said the priority for the US economy is to attract more private capital.
“We have huge pools of long-term capital which is looking to invest, whether it’s in data centres or ports,” he said. “The future for economic growth is having a robust banking system alongside robust capital markets.”
