A significant public sector pension fund in West Wales is contemplating divesting from an investment in a renewable energy company, despite concerns raised by one of its members. The committee overseeing the £3bn-plus Dyfed Pension Fund, which counts Carmarthenshire Council and other public sector organisations as contributors, has been asked to explore the possibility of withdrawing from an earlier investment in Bute Energy. Bute Energy intends to develop wind farms in Mid Wales and connect them via pylons to a substation near Carmarthen through its subsidiary, Green GEN Cymru. There has been strong opposition to the pylon plans, with calls for the cables to be buried underground using cable ploughing.
Carmarthenshire Council, a vocal critic of overhead lines, submitted a withdrawal request through its cabinet member for resources, Cllr Alun Lenny, who also represents an employer on the Dyfed Pension Fund. Although the council has advocated for climate change action, endorsing a goal to become a “net zero” greenhouse gas-emitting authority by 2030, concerns have been raised about divesting from a zero-carbon investment. During a recent Dyfed Pension Fund committee meeting, Cllr Dai Thomas expressed reservations about considering divestment from Bute Energy, particularly as there is pressure to move away from fossil fuels. The council’s corporate services director, Chris Moore, highlighted the need to assess the legal feasibility and financial implications of divestment.
The committee was informed that the pension fund’s early divestment from Bute Energy could potentially compromise its objective of obtaining value for money. Despite mixed opinions within the committee, including Cllr Thomas’s reservations about divestment, a proposal was made to explore the costs of divestment further. It was suggested that the fund should engage with Bute Energy-Green GEN Cymru regarding the underground cable option and formulate a detailed response for future committee deliberation. The complexities of balancing divestment decisions with environmental priorities and financial considerations have underscored the challenges faced by the public sector pension fund in navigating its investment strategy.