Nearly 9 in 10 UK insurers/pension funds plan to invest more into offshore wind

Written by Adam Cadle

04/07/2024

Nearly nine in 10 UK insurers and pension funds plan to invest more into offshore wind in the next five years, according to a survey commissioned by AlphaReal.

While offshore wind is already the most popular renewable energy choice for UK insurers and pension funds, with two-thirds of those interviewed (67%) saying their funds hold allocations, 30% still expect to make significant increases, with 57% stating they will make slight increases. Twelve per cent said 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 insurers and pension funds currently invest, will also see significant increases from more than half (57%) of investors in the next five years, and 14% will keep allocations the same.

More than half (54%) of UK insurers and pension funds said they invest in ground-mount solar, with 56% saying they will increase allocations significantly in the next five years.

Overall, 85% said they look for exposure to multiple technologies while only 15% prefer to invest in a single renewable energy technology.

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.”

Alpha Real Capital commissioned the survey of 100 UK public and private pension funds, and insurance senior investment professionals in the UK. Collectively they manage £359.82bn in AuM. Interviews were conducted online in November 2023.

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