The asset management arm of Europe’s biggest insurer, Allianz, says renewable energy production and infrastructure are gaining investor appeal as they become less dependent on government support in more European markets.
Allianz has been investing billions of euros of policyholder funds in renewable energy.
“These investments either offer attractive feed-in tariffs, are already at grid parity, competitive with conventional energy, or are going in that direction,” Armin Sandhoevel, chief investment officer for renewables at Allianz Global Investors, told a press briefing in the German city of Frankfurt.
“That is also the future of the market, it will make it bigger and more comfortable for institutional investors.”
Spanish and Italian wind or solar installations were the most advanced in terms of profitability while those in the Nordic countries, Britain, Germany, France and the Benelux would be catching up, he said.
Mr Sandhoevel, who Reuters Newsagency reports was touting the new Allianz renewable fund (AREF), which he manages, said that further advantages of a move to green systems were the decoupling from rising global fuel costs and proven viability of the new technologies, which ensured long-term cash flows.
Institutional investors such as pension funds were looking for a diversification away from government bonds at a time of unattractive yields, Allianz executives said.
“Renewables and infrastructure represent a good match with insurers’ and pension funds’ long-term obligations to policy holder,” said managing director Tobias Pross.
Allianz has collected €100 million for the AREF fund so far, mainly from German investors in some 10 to 15 projects, and projects future yields after costs and taxes at roughly six per cent.
The fund invests in solar, onshore wind and some biomass.
German Chancellor Angela Merkel and Environment Minister Peter Altmaier have been seeking ways to cut rising renewable energy support, for which consumers must pay.
While the latest efforts to trim costs failed and are unlikely to be renewed until after national elections in September, such intervention was priced in, Mr Sandhoevel said.
Green power output in Germany last year was 136 gigawatt hours, totalling 22 per cent of all power produced.
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WHY “GREEN” TECHNOLOGY WILL LEAVE YOU IN THE DARK
“The Coming Crisis in Electricity Generation,” posted today on the energybiz.com website, is an excellent outline of how decentralized, unpredictable, and unstable renewal, or “green,” technologies, will destroy more than 100 years of reliable U.S. electricity generation and distribution systems. The author, Davis Swan, president of Debarel Systems Ltd, explains that an electricity grid functions within a delicate balance of generation and demand, since electricity cannot be stored, but must be delivered in real time.
Baseload power plants operate 24/7 to meet basic electricity requirements (coal, nuclear, hydroelectric), and smaller units, usually natural gas-fired, are used for short periods of time, to meet peak demand, since demand fluctuates with time of day, weather, etc. The economy of the large, 500-1,000MW baseload plants (which have made electricity affordable) lies in their size and constant output. The economy of these plants has become increasingly eroded, however, as they sit idle, when mandated and grossly expensive “renewable” sources are used. This has made it very difficult to get financing to build new power plants. As a result, and at the same time that environmental regulations are mandating that older coal plants be shut down, reserve capacity, needed to meet any unexpected loss of generating plants, is disappearing. Texas has already been warned by regulators that it is headed for blackouts. The rest of the nationally interconnected grid will soon face similar catastrophes.
The Wall Street-directed deregulation of the electric utilities, starting in the mid-1990s, turned an industry that is the foundation for our necessary standard of living, into (in Enron and other cases) a sinister game, where fleecing customers for a profit replaced Franklin Roosevelt’s policy to regulate the utilities, in order to provide universal, reliable electric power.
Remarkably, Swan notes, until recently, the intricate U.S. grid system worked so well, the overwhelming cause for the disruption of power delivery in the U.S. was unavoidable severe weather. Now, a system that has been the envy of the world, but severely undercapitalized and under attack by pseudo-scientific “environmental” regulations for two decades, is under physical attack from unreliable and disruptive small-scale “green” projects. These projects, like ethanol in gasoline, have been mandated by the federal and some state governments, that use tax dollars to subsidize this sabotage. If people are concerned about the effect of supposed changes in the “environment” on their standard of living, THEY SHOULD ASK VICTIMS OF HURRICANE SANDY WHAT IT IS LIKE TO LIVE WITHOUT ELECTRICITY.