UK Pension funds prefer diversified renewable energy investments, survey reveals
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AlphaReal, an assets investment manager, recently surveyed UK pension funds and insurers that collectively manage over £350 billion in assets. The survey revealed a strong preference among the respondents for diversification across renewable energy assets.
85% of those surveyed said they seek exposure to multiple technologies, while only 15% prefer investing in a single renewable energy technology.
Additionally, almost 90% intend to increase their investments in onshore wind over the next five years.
Currently, onshore wind is the most favoured renewable energy option for UK pension funds and insurers, with 67% of respondents indicating that their funds already include allocations to it.
Battery energy storage systems (BESS) are already a popular investment, with 63% of UK pension funds and insurers investing in them.
In the next five years, more than half of these investors (57%) plan to invest more, while about a quarter will make smaller increases.’
Read more: Britons demand fossil fuel-free pension investments as calls for climate justice intensify
Raza Ali, Investment Director of Renewable Infrastructure at AlphaReal, said, “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.”
Over half (54%) of UK pension funds and insurers surveyed currently invest in ground-mount solar. Of these, 56% plan to significantly increase their investments in the next five years, 15% will make slight increases, and 14% will maintain their current investment levels.
Ed Palmer, CEO and Head of Sustainability of AlphaReal, added, “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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