Solar energy: The UK outshines Germany

Solar energy from a notoriously rain-drenched United Kingdom of all places. In June 2014, Allianz Renewable Energy Fund (AREF) added the Great Glemham Solar Park to its portfolio. Armin Sandhövel, Chief Investment Officer (CIO) for Infrastructure Equity at Allianz Global Investors: “The hours of sunshine in the middle of England, for example, are excellent and on a par with southern Germany.”

 

The capacity of the British solar market has multiplied over the past five years from a meagre 65 MWp (megawatt peak) of installed capacity in 2010, to today’s 5,000 MWp. The UK now has the most new solar plant installations in Europe, bumping Germany off its first-place pedestal. That makes it one of the most attractive renewable energy markets in Europe.
 

Favorable regulatory environment in the UK

 
As owners of Great Glemham, the AREF Investor Group is able to benefit from renewable energy subsidies offered by the UK Government. However, though this is one of the solar farm’s economic advantages right now, Sandhövel cautions that, in the case of long-term investments, it would be dangerous to rely solely on subsidies: “Government subsidies for renewable energy facilities are typically cut back once they become interesting to free economic competition. Since there are no guarantees that subsidies in the UK will be made available over the long term, a project like Great Glemham, with its combination of cutting-edge technology and advantageous geographical location, makes it even more in demand by investors.”
Mega watt peak – the maximum output of a plant in Megawatt.
Solar parks like Great Glemham: strongly demanded by investors
Solar parks like Great Glemham: strongly demanded by investors

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Quality trumps

 
Great Glemham fulfills all the critically defined prerequisites set down by the investment team and its international network of experts. Moreover, it already has long-term agreements with a solvent energy consumer. The fund should benefit from these stable and ongoing payment flows.
 

Diversity of sun and wind

 
The AREF portfolio has invested its capital into onshore wind parks and solar park projects in four European countries. Given the two different types of power generating facilities, wind and sun, the AREF network guarantees important technical diversification. And, being located in the UK, Great Glemham also supplements the regional investment spread. That means that if the sun does not shine on investors in the British coastal town of Ipswich, it surely will in Italy or France. Riding on the additional tailwind blowing from German wind facilities, AREF investors have made a long-term commitment to the production of environmentally friendly energy to supply more than 100,000 European households.

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer:
 

Stefanie Waldeck
AllianzGI GmbH
Phone +49.69.263-14670
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