At a glance
- Sword+Stone Capital Management helps clients identify opportunities for investment in renewables.
- The company has identified a market-proven technology for use in Australia’s electricity market to support growth in renewable generation.
One of the key lessons Peter Brindley FCPA learned from being a CPA is the importance of bringing together real-world operations with finance.
For example, “how do we innovate so that it becomes commercially viable for large scale of battery storage to join the grid?”, Brindley asks.
The business develops projects for investors to build battery farms, and then sells the electricity storage capacity to a range of customers.
“It could be solar farms that need to shift their solar energy to a time when it’s more valued by the electricity grid; it can be commercial customers that are worried about high charges during peak demand periods for their sites; or it can be the electricity grid operators who want help to get more power through the grid and reduce losses,” Brindley says.
Sword+Stone also plans to take part in wholesale energy markets – using its own algorithms to buy energy when it is cheap because too much is being generated, and then sell it back into the market when demand and prices are high.
Batteries are expected to play a central role in the development of zero emissions electricity in Australia, helping overcome the problem that wind and solar power is not always generated at times of peak demand, as well as reducing inefficiencies in the electricity grid.
One of the key challenges for the business is that the price of renewable energy technology, including batteries, is getting cheaper, while at the same time becoming more efficient.
“Making sure we get the batteries at a cost that will be sustainable over time will be crucial,” says Brindley, who has held operational and management roles at Origin Energy, the RACV and Dulux among others.
It is here where Brindley says his finance and accounting expertise come to the fore.
“One of the things that the CPA and finance background has really taught me is the importance of bringing real operations and real activity together with the financial outcomes,” he says.
“There’s a need to find creative ways to develop new markets and new contracts with different customers, so that there’s enough return for the investment in the batteries.
That understanding of real activity in the field and the financial implications has been key. And thinking about how you can find multiple opportunities – how do the finances become additive?”
The business is working on its first project, a large-scale battery farm in Queensland.
It has secured initial funding for the project from an overseas investor and will be seeking A$50 million to A$100 million from institutional investors locally or overseas.
Sword+Stone earns revenue from project development and operation, as well as project investment returns. The firm also has its own capital invested alongside its external investors’ funds.
The business came about after Stuart Parry, another director with experience in investment, saw that, while investment markets wanted to support renewable energy, they were struggling to make commercial investments without government help. He was the one who brought together the four Sword+Stone founders.
“We started a discussion, around how do we close that gap? How do we find technical solutions that can stand on their own two feet commercially without any government subsidies, and how do we bring those to life?” Brindley says.
“And that was where Sword+Stone came from.”
One piece of advice
“Don’t underestimate the value of the knowledge that you’ve built through becoming a CPA and as a finance expert, but be adaptable to learning new things, moving into business.”