Insurers and pension funds look to invest across range of renewable energy technologies

A survey of UK pension funds and insurers that collectively manage over £350 billion in assets, commissioned by AlphaReal, the specialist manager of secure income real assets, reveals that amongst those surveyed there is a strong preference for diversification across renewable energy assets.

The majority (85%) say they look for exposure to multiple technologies while only 15% prefer to invest in a single renewable energy technology.

Of those surveyed, nearly nine in ten survey respondents plan to invest more into onshore wind in the next five years. This is already the most popular renewable energy choice for UK pension funds and insurers, with two-thirds of those interviewed (67%) saying their funds hold allocations. 30% of respondents expect to make significant increases, while 57% will make slight increases. 12% say they will keep allocations to onshore wind the same, while 1% will make slight decreases.

Battery energy storage systems (BESS), in which 63% of UK pension funds and insurers responding to the survey currently invest, will also see significant increases from more than half (57%) of investors in the next five years, while one-quarter of respondents will make only slight increases.

More than half (54%) of UK pension funds and insurers surveyed say they invest in ground-mount solar. 56% percent say they will increase allocations significantly in the next five years while 15% will increase slightly, and 14% will keep allocations the same.

Raza Ali, Investment Director, Renewable Infrastructure at AlphaReal said: “These findings support our investment approach at AlphaReal where we encourage diversification across renewable infrastructure technologies. Experience in the sector has demonstrated there is a complimentary energy generation profile between ground-mount solar and onshore wind, and adding BESS could provide further diversification and derisking benefits whilst continuing to provide stable returns to investors. It is encouraging to see that the majority of those surveyed see the value of a diversified approach and plan to increase their current renewables allocations.”

Ed Palmer, CEO and Head of Sustainability of AlphaReal said: “It makes sense that investors choose to diversify across different renewable energy technologies to get the most out of the range of opportunities available. AlphaReal has originated and managed a diversified pool of renewable energy assets for over a decade.  To date, we have deployed over £1 billion into assets that support the transition to clean energy and that provide alignment with ESG investment objectives.”

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