Funding the Future: How Solar and Wind are Securing Oregon’s Retirements

Introduction: The Hundred-Billion-Dollar Question

For decades, the mandate of the Oregon Public Employees Retirement Fund (OPERF) was straightforward: maximize returns to ensure that the state’s firefighters, teachers, and civil servants received their promised pensions. The primary variables were interest rates, inflation, and market volatility. Today, a new, volatile variable has entered the equation—climate change. With a portfolio valued at over $100 billion, the Oregon State Treasury is undertaking a massive strategic pivot, moving capital away from fossil-fuel-heavy indices and into "climate-positive" real assets.¹

This shift is not merely an act of environmental stewardship; it is a calculated financial maneuver grounded in a reinterpretation of fiduciary duty. As the global economy decarbonizes, the Treasury is betting that "transition infrastructure"—solar farms, battery storage hubs, and wind arrays—will outperform traditional energy assets. This article explores the legislative frameworks driving this change, the financial modeling behind the risk assessments, and the specific physical technologies that now form the bedrock of Oregon’s pension security.

Part I: The Legal and Political Landscape

Redefining Fiduciary Duty

Historically, fiduciary duty was interpreted as a legal obligation to prioritize financial returns above all else, often excluding environmental, social, and governance (ESG) factors. However, under the leadership of Treasurers Tobias Read and Elizabeth Steiner, Oregon has adopted the position that climate risk is financial risk.² The logic is that ignoring the global energy transition exposes the fund to "stranded assets"—investments in coal mines or oil reserves that may become worthless due to regulation or market obsolescence.³

This stance has been reinforced by Oregon Attorney General Ellen Rosenblum, who has actively investigated corporate boards for breaching their fiduciary duties by failing to manage long-term risks, signaling a broader legal strategy to protect the fund’s value.⁴

The Climate Resilience Investment Act (HB 2081A)

In 2025, this policy shift was codified into law with the Climate Resilience Investment Act (HB 2081A). The Act statutorily mandates the Treasury to:

1. Assess Risk: regularly analyze the risks associated with Scope 1 (direct) and Scope 2 (energy purchase) emissions within the portfolio.

2. Pursue Opportunities: actively identify and invest in profitable clean energy projects.

3. Report: provide transparency to the legislature regarding the fund’s climate trajectory.⁵

Critically, the Act has faced scrutiny for what it excludes. Advocacy groups like Divest Oregon point out that the legislation focuses on Scope 1 and 2 emissions, largely omitting Scope 3 emissions—the pollution generated when a company's product (like gasoline) is used by a consumer. Since Scope 3 accounts for the vast majority of fossil fuel companies' carbon footprints, critics argue this creates a reporting loophole.⁶

The "Hidden" Report and the Pause Act

The political tension surrounding these decisions is palpable. A 2021 report by the Treasury's consultant, Ortec Finance, titled "Climate Risk Modelling Scenario," became a flashpoint. Allegedly withheld from the public for a year, the report utilized NGFS (Network for Greening the Financial System) scenarios to predict that in a "Failed Transition" (business-as-usual) scenario, the OPERF portfolio could lose 37% of its value by 2060 compared to a baseline.⁷

This data fueled support for the "Pause Act" (SB 681), a legislative effort championed by climate advocates to place an immediate moratorium on new fossil fuel investments. While the Treasury favors "engagement"—using shareholder power to push companies toward net zero—activists argue that the Ortec data proves that immediate divestment is the only fiscally prudent path.⁸

Part II: The Financial Strategy – From Stocks to "Real Assets"

The Pivot to Private Markets

To execute its decarbonization strategy, OPERF is increasingly moving capital out of public stock markets and into private "Real Assets." As of 2025, the fund held approximately $2.4 billion in climate-positive real assets, a figure that doubled in just three years.¹⁰

The rationale is control. In the public market, an investor is one of millions; in private equity, the investor (Limited Partner) and the manager (General Partner) often dictate the strategy of the underlying company. The Treasury has partnered with massive global infrastructure managers to deploy this capital:

• Stonepeak: A key partner, with OPERF committing $150 million to the Stonepeak Global Renewables Fund II. Stonepeak focuses on "hard assets" with high barriers to entry, such as utility-scale wind and solar developments.¹¹

• Brookfield Infrastructure: OPERF has invested across multiple vintages of Brookfield funds (Funds III, IV, V), which own and operate vast renewable energy networks globally.¹³

Decarbonization Metrics: Intensity vs. Absolute

The Treasury measures its progress using "Emissions Intensity" (tons of CO2 equivalent per million dollars invested) rather than absolute emissions. Between 2022 and 2023, the fund reported a 50% reduction in emissions intensity.¹⁰

While impressive, this metric allows for a "growing denominator" effect. If the value of the portfolio rises significantly (the denominator), the intensity can drop even if the total carbon emitted (the numerator) remains constant. This distinction remains a central point of debate between the Treasury’s financial engineers and environmental watchdogs.¹⁴

Metric	Definition	OPERF Status	Critique
Financed Emissions	Total greenhouse gas emissions attributed to the portfolio's share of ownership.	Reduced in Private Markets.	Difficult to calculate for Scope 3.
Emissions Intensity	Emissions divided by the dollar value of the investment (tCO2e/$M).	Down >50% (2022-2023).	Can mask total pollution if asset value rises.
Climate-Positive Assets	Investments in solutions like renewables, storage, and efficiency.	$2.4 Billion (2025).	High fees associated with Private Equity managers.

Part III: The Science of the Portfolio

When the Treasury invests in "Transition Infrastructure," it is effectively buying shares in specific physical processes. Understanding the financial value requires understanding the underlying science. The portfolio is built on four pillars of physics and chemistry: Photovoltaics, Aerodynamics, Electrochemistry, and Electrolysis.

1. Solar Cells: The Silicon Energy Trap

Solar energy investments, such as those with Stonepeak’s partner AGP Sustainable Real Assets, rely on the photovoltaic effect. This is a quantum phenomenon occurring within silicon semiconductors.

A solar cell is essentially a sandwich of two different silicon layers. One layer is treated (doped) with phosphorus to have too many electrons (N-type), and the other is treated with boron to have too many "holes" or positive charges (P-type). Where they meet, they form a p-n junction, creating a built-in electric field.¹⁵

When sunlight hits the cell, it arrives as packets of energy called photons. If a photon strikes a silicon atom with enough energy, it knocks an electron loose from its orbit. Because of the electric field at the p-n junction, this free electron is instantly pushed toward the N-side, while the "hole" it left behind moves to the P-side. This separation of charge creates voltage. When we connect a wire to the cell, the electrons flow through it to reunite with the holes, creating the electric current that powers the grid.¹⁶

2. Wind Aerodynamics: The Bernoulli Lift

Wind investments, such as Stonepeak’s acquisition of onshore wind portfolios, are based on aerodynamics, not just "catching" the wind. A wind turbine blade is an airfoil, shaped like an airplane wing—curved on top and flatter on the bottom.

As wind flows over the blade, it must travel faster over the curved top surface than the flat bottom surface. According to Bernoulli’s Principle, faster-moving air exerts lower pressure. This pressure difference creates a suction force that pulls the blade forward; this is lift.¹⁸

Modern turbines are marvels of control engineering. They employ pitch control, rotating the blades to change their angle of attack. In low winds, they pitch to catch maximum air; in dangerous storms, they "feather" the blades (turn the edge into the wind) to stop rotation and prevent structural failure. The theoretical maximum efficiency of this process is the Betz Limit (59.3%), though real-world turbines achieve roughly 75-80% of this theoretical max.¹⁹

3. Battery Storage: The Ion Shuttle

As the portfolio adds intermittent wind and solar, it must also add storage. A prime example is Bolt Energy LLC (a 2019 vintage investment in the OPERF portfolio), which is associated with utility-scale storage development.²¹ Projects like the massive Darden installation in Fresno rely on Lithium-Iron-Phosphate (LFP) chemistry.²³

The science here is intercalation. Imagine the battery’s anode (negative side) as a graphite parking garage and the cathode (positive side) as a metal oxide building. When the battery charges, lithium ions commute from the cathode to the anode, parking themselves between the graphite layers. When the grid needs power, these ions rush back to the cathode.

The financial value lies in the speed of this commute. Unlike a coal plant that takes hours to ramp up, a battery can switch from charging to discharging in milliseconds. This allows it to provide frequency regulation, injecting power instantly to keep the grid’s heartbeat steady at 60 Hertz, a service for which grid operators pay a premium.²⁴

4. Green Hydrogen: Splitting the Molecule

The newest frontier in the portfolio is green hydrogen, produced via electrolysis. This process uses renewable electricity to split water (H2O) into hydrogen and oxygen.

In a Proton Exchange Membrane (PEM) electrolyzer, water is introduced to the anode. The electric current strips electrons from the water molecules, releasing oxygen gas and positively charged hydrogen ions (protons). These protons migrate through a solid polymer membrane—which acts like a selective border guard—to the cathode. There, they regain electrons and bond to form hydrogen gas (H2). This gas can be stored and used as a carbon-free fuel for heavy industry, creating a way to "electrify" sectors that can't run on batteries.²⁶

Part IV: Critical Analysis and Future Outlook

The Cost of Transition

While the physics are sound, the economics are debated. The shift to private markets comes with high fees. Private equity managers typically charge a management fee (often 2%) and a performance fee (20% of profits). Divest Oregon has published analysis suggesting that the Treasury’s heavy reliance on private equity has led to a $3.7 billion drag on returns compared to a lower-cost, passive investment strategy.²⁷

However, the Treasury argues that net returns (after fees) for the Real Assets portfolio have been superior, delivering 20% earnings over the last five years.¹⁰ They maintain that "you get what you pay for"—active management in a complex, physical sector like energy infrastructure requires specialized engineering and financial expertise that passive index funds cannot provide.

The Verdict regarding "Bolt Energy"

An interesting case study in the portfolio is the performance of Bolt Energy LLC. The Treasury's records show this asset has performed exceptionally well, with a "Total Value Multiple" of over 2.0x—meaning the investment has more than doubled in value since 2019.²¹ This validates the thesis that early entry into energy transition infrastructure can yield outsized returns, counterbalancing the risks associated with fossil fuel volatility.

Conclusion

The Oregon Public Employees Retirement Fund is navigating a narrow channel between political pressure, legal mandates, and financial imperatives. The "Net Zero Plan" is effectively a wager that the global economy will successfully transition to low-carbon energy sources. If that transition happens, Oregon’s investments in the physics of solar, wind, and batteries will secure the retirements of its public servants. If the transition fails, the "hidden" Ortec report suggests the fund—and the world—faces losses that no amount of diversification can fully mitigate.

By integrating the Climate Resilience Investment Act into its core strategy, Oregon has moved beyond the debate of "values vs. value." In the modern era, the Treasury argues, they are one and the same.

Works cited

1. Oregon's $100bn public pension fund on track to triple transition infrastructure investment, accessed January 19, 2026, https://www.netzeroinvestor.net/news-and-views/oregons-100bn-public-pension-fund-on-track-to-triple-transition-infrastructure-investment

2. 2025 Progress Report: Tracking Net Zero and Climate-Positive Investment Strategies - Oregon.gov, accessed January 19, 2026, https://www.oregon.gov/treasury/Documents/Site-Documentation/Landing-Page-Documents/Sustainable-Investing/2025-Progress-Report-Tracking-Net-Zero-and-Climate-Positive-Investment-Strategies.pdf

3. Climate Risk Review - Executive Summary, accessed January 19, 2026, https://irp.cdn-website.com/21c0cb7e/files/uploaded/Executive_Summary_of_Divest_Oregon_2025_Climate_Risk_Review_-_May_2025-8291fde5.pdf

4. Oregon AG, Treasurer, to Investigate Fox Corporation Board of Directors for Breach of Fiduciary Duty, accessed January 19, 2026, https://www.doj.state.or.us/media-home/news-media-releases/oregon-ag-treasurer-to-investigate-fox-corporation-board-of-directors-for-breach-of-fiduciary-duty/

5. Treasury : Climate-Positive Investing - Oregon.gov, accessed January 19, 2026, https://www.oregon.gov/treasury/invested-for-oregon/pages/climate-positive-investing.aspx

6. Oregon Treasury's “Climate Resilience Investment Act” Bill (HB 2081A) Passes, accessed January 19, 2026, https://climatesafepensions.org/oregon-climate-resilience-investment-bill-passes-2025/

7. Written Testimony of Rick Pope, Divest Oregon, accessed January 19, 2026, https://olis.oregonlegislature.gov/liz/2025R1/Downloads/PublicTestimonyDocument/156198

8. Private Investments at Oregon Treasury - in Graphs, accessed January 19, 2026, https://www.divestoregon.org/private-investments-at-oregon-treasury-in-graphs

9. Oregon State Treasury's Climate Risk/Scan Report, accessed January 19, 2026, https://www.divestoregon.org/climaterisk

10. Oregon State Treasury Releases Progress Report on Net Zero and Climate Positive Investment Strategy, accessed January 19, 2026, https://apps.oregon.gov/oregon-newsroom/OR/OST/Posts/Post/Treasury-Releases-Net-Zero-And-Climate-Positive-Progress-Report

11. Oregon Public Employees Invests $350M in RE, Real Assets Funds - Dakota, accessed January 19, 2026, https://www.dakota.com/fundraising-news/oregon-public-employees-invests-350m-in-re-real-assets-funds

12. Stonepeak to target $5bn for second renewables fund – exclusive - Infrastructure Investor, accessed January 19, 2026, https://www.infrastructureinvestor.com/stonepeak-to-target-5bn-for-second-renewables-fund-exclusive/

13. OPERF Real Assets Portfolio - Quarter 1 2021 - Oregon Public Employees Retirement Fund, accessed January 19, 2026, https://www.oregon.gov/treasury/invested-for-oregon/Documents/Invested-for-OR-Performance-and-Holdings/2024/FOIA-Q1-2022-OPERF-Real-Assets.pdf

14. Divest Oregon's Summary and Analysis of the Oregon Net Zero Plan, accessed January 19, 2026, https://www.divestoregon.org/oregon-net-zero-plan-summary-review

15. Photovoltaic Effect 101: Simple Physics, Real-World Output - Anern Store, accessed January 19, 2026, https://www.anernstore.com/blogs/diy-solar-guides/photovoltaic-effect-101-physics

16. Photovoltaic effect | Solar Energy Conversion, Photons & Electrons | Britannica, accessed January 19, 2026, https://www.britannica.com/science/photovoltaic-effect

17. The photoelectric and photovoltaic effects | Physics | Khan Academy - YouTube, accessed January 19, 2026, https://www.youtube.com/watch?v=HCCm0lFwqNw

18. How a Wind Turbine Works - Text Version | Department of Energy, accessed January 19, 2026, https://www.energy.gov/eere/wind/how-wind-turbine-works-text-version

19. Wind Turbine Aerodynamics: Stall vs Pitch Regulation - YouTube, accessed January 19, 2026, https://www.youtube.com/watch?v=Y5T5ZhJQr2o

20. Aerodynamics of Wind - Turbines, accessed January 19, 2026, https://geosci.uchicago.edu/~moyer/GEOS24705/Readings/turbine_aerodynamics.pdf

21. Oregon Public Employees Retirement Fund, accessed January 19, 2026, https://www.oregon.gov/treasury/invested-for-oregon/Documents/Invested-for-OR-Performance-and-Holdings/2024/FOIA-Q4-2023-OPERF-Real-Assets.pdf

22. OPERF Real Assets Portfolio - Quarter 2 2025 - Oregon Public Employees Retirement Fund, accessed January 19, 2026, https://www.oregon.gov/treasury/invested-for-oregon/Documents/Invested-for-OR-Performance-and-Holdings/2025/OPERF_Real_Assets_Portfolio_-_Quarter_2_2025.pdf

23. CEC Approves World's Largest Solar + Battery Storage Project in Fresno County Under Accelerated Permitting Program - California Energy Commission, accessed January 19, 2026, https://www.energy.ca.gov/news/2025-06/cec-approves-worlds-largest-solar-battery-storage-project-fresno-county-under

24. Battery Energy Storage System (BESS) | The Ultimate Guide - Edina.eu, accessed January 19, 2026, https://www.edina.eu/power/battery-energy-storage-system-bess

25. How Does Utility-Scale Battery Storage Work? - Arevon, accessed January 19, 2026, https://arevonenergy.com/news/blog/how-does-battery-storage-work/

26. Electrolysis for Green Hydrogen Production | Linde, accessed January 19, 2026, https://www.linde.com/clean-energy/our-h2-technology/electrolysis-for-green-hydrogen-production

27. Two New Reports! Can the Oregon pension fund support a just transition to clean energy? Screening investments is the key, accessed January 19, 2026, https://www.divestoregon.org/can-pension-funds-support-a-just-transition-to-clean-energy-screening-investments-is-the-key

28. Treasury : Sustainable Investing - Oregon.gov, accessed January 19, 2026, https://www.oregon.gov/treasury/invested-for-oregon/pages/sustainable-investing-governance.aspx

29. Governor Kotek Formally Signs the Climate Resilience Investment Act (HB 2081A) - Newsroom - Oregon State Treasury, accessed January 19, 2026, https://apps.oregon.gov/oregon-newsroom/OR/OST/Posts/Post/governor-kotek-formally-signs-climate-resilience-investment-act

30. Lithium Knowledge - Bolt Energy USA, accessed January 19, 2026, https://boltenergyusa.com/lithium-knowledge/

31. Your guide to electrolysis: the tech behind the green hydrogen revolution - Topsoe, accessed January 19, 2026, https://www.topsoe.com/blog/your-guide-to-electrolysis

32. Bolt — Fresno, CA - Cleanview, accessed January 19, 2026, https://cleanview.co/planned-battery-projects/CA/54657_storage/bolt