Home > Ontario Teachers’ Pension Plan Invests in Scottish Hydroelectric Transmission System

NewsDecember 1, 2022

Ontario Teachers’ Pension Plan Invests in Scottish Hydroelectric Transmission System

The pension fund will pay $2.4 billion for 25% of SSEN Transmission, continuing the plan’s allocation to infrastructure, which has increased 60% since 2017.

By Dusty Hagedorn

The $242.5 billion Ontario Teachers’ Pension Plan has taken a 25% stake in SSEN Transmission, a division of SSE PLC, a multinational energy company headquartered in Perth, Scotland.

The pension fund reported paying £1.47 billion ($2.4 billion) for the share of SSEN Transmission. The placement is the pension fund’s largest power-distribution and utility investment.

SSEN Transmission, the trading name for Scottish Hydro Electric Transmission, delivers hydroelectric power from northern Scotland to the rest of Great Britain. The company’s network consists of underground and subsea cables, overhead lines, and substations. The division is already a mass exporter of renewable energy; around two-thirds of power generated in the network’s area gets exported to demand centers further south in Britain.

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The SSEN transaction is the latest in a series of investments that OTPP has made in power transmission and distribution.

In 2021, the pension plan bought a 40% share of Finnish power distributor Caruna, which is in the process of burying most of its power lines in order to “weatherproof” its grid. The same year, the fund bought power transmission network Evoltz, a Brazilian operator, which owns more than 3,500 kilometers of power lines spanning 10 Brazilian states.

The investments are a part of the Ontario Teachers’ Infrastructure & Natural Resources group, which invests in energy infrastructure worldwide to accelerate the transition away from fossil fuels.

In May, OTPP agreed to invest up to $1 billion into a new offshore wind farm business launched by Macquarie Group Limited, of Australia, which aims to develop 14 fixed-bottom and floating wind farms in South Korea, Taiwan, Japan, Ireland and Great Britain.

OTPP in 2021 had acquired Scotia Gas Networks Limited, a British gas distribution company that manages natural and green gas distribution networks in Scotland and England, from SSE PLC.

“SSEN Transmission is one of Europe’s fastest growing transmission networks. Its network stretches across some of the most challenging terrain in Scotland–from the North Sea and across the Highlands–to deliver safe, reliable, renewable energy to demand centers across the UK,” said Charles Thomazi, OTPP senior managing director and head of EMEA infrastructure and natural resources at, in a press release. “We’re delighted to partner again with SSE and are committed to supporting the growth of its network and the vital role it plays in the UK’s green energy revolution.”

The fund’s total infrastructure assets under management have grown by more than 60% since 2017, reaching $30.6 billion at the end of June 2022.

Higher Interest Rates Are Living on Borrowed Time, Jeremy Siegel Says

The Federal Reserve won’t be able to ignore a slowing economy and will reverse course, the economist predicts.

By Larry Light

The big debate on Wall Street is how high the Federal Reserve will take interest rates, aiming to stamp out high inflation, and if they will stunt the economy. There’s a case, though, that interest rates will head in the other direction.

The momentum right now is for ever-higher rates. James Bullard, president of the St. Louis Fed, contends that the Fed funds rate needs to climb to somewhere between 5% and 7%. Futures markets are convinced that the central bank will increase by half a percentage point at its mid-December meeting, which would put it in a 4.25% to 4.5% band.

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The other side of this debate, which typically gets less attention, is that rates will be cut in 2023 as the economy heads south. Jeremy Siegel, emeritus professor of finance at the University of Pennsylvania’s Wharton School, is a prominent proponent of the dovish viewpoint. Siegel “would not be surprised to see the Fed reversing course next year from uber hikes back to rate cuts,” he wrote recently in his commentary for WisdomTree Investments, where he is a senior investment strategy adviser.

The reason, of course, is that he expects an economic slowdown severe enough to bring radical rate cuts. He expects there will be “a 2% Fed funds rate by the end of 2023,” he wrote.

Evidence of a weakening economy buoys his prediction, he argued, although the Fed at the moment seems more focused on constraining high inflation. The Producer Price Index has been slowing all year, turning negative in July, hitting zero in August and advancing by minuscule amounts (0.2% in September and October) since.

The deceleration of the PPI, which measures wholesale prices, was a non-event at the Fed, Siegel complained. Fed officials, in public appearances, ended up “ignoring these improving price trends,” which he believes portend a lessening of inflation.

In addition, the National Association of Home Builders Housing Market Index, done in conjunction with Wells Fargo, continues to show that this important economic sector is shrinking, he pointed out. The NAHB index, a gauge of builders’ confidence, has fallen almost 60% this year. “This did not translate to a major drop in housing starts or home sales yet, but we will surely see more pressure on housing prices given the surge in mortgage rates,” Siegel remarked.

While the labor market remains strong, Siegel went on, he expects that to be temporary.

Once the jobs situation sours, he said, the Fed will wake up. But that may well be too late, he added.

In that scenario, a deeper recession than necessary will ensue because the Fed did not lower rates soon enough, in his view.

“There is still a small chance we can avoid a recession if the Fed recognizes the inflationary impulse and pressures are over and eases off the brakes,” Siegel declared.