A survey of UK pension funds and insurers that collectively manage over £350bn in assets reveals a clear preference to invest more in onshore wind in the next five years.
The survey, commissioned by specialist manager of secure income real assets AlphaReal, reveals that among 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 10 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.
Around 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 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 with 56% saying they will increase allocations significantly in the next five years, while 15% will increase slightly, while 14% will keep allocations the same.
Investment director of renewable infrastructure at AlphaReal Raza Ali 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.”
Chief executive and head of sustainability of AlphaReal Ed Palmer 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 £1bn into assets that support the transition to clean energy and that provide alignment with ESG investment objectives.”