A bright horizon

The future is bright for the renewable energy sector. The market has grown significantly over the past few years. In Germany, for example, 17 percent of all energy consumed in 2010 came from wind and solar power, and in Europe as a whole the share was 10.4 percent. A study by the Intergovernmental Panel on Climate Change (IPCC) has even come to the conclusion that by 2050 the world would generate the majority of its energy from renewable sources.

Driving this projection is the widespread demand for regenerative energy. In Germany, 97 percent of people consider a further expansion of the sector to be important or very important. A majority of Italians voted last year against atomic power, giving a clear no to the question of whether the country should restart its nuclear program. The Fukushima reactor incident in particular has made the popular view of older forms of power generation more critical. In addition, increasing emissions that damage the climate and the increase in natural catastrophes have led to a real shift in energy policy.

All over the world, countries are now rethinking their energy sources – and they are doing something about it. But it is not simply a matter of what individual countries want. Worldwide there are more than 30 countries that depend on nuclear power as part of their energy mix, so an international change in energy policy will not be emerging in the near future.

Renewable energies support the battle against climate change. And it is not only private demand for wind and solar power that is growing; alternative energy sources are also gaining traction with the industrial sector. The trend toward wind, water, solar and geothermic power is providing businesses with new opportunities. The high level of research and development that go into renewables is generating a wide spectrum of technical innovations. In Germany alone, in 2010 some 120 million euros were invested in research and development projects in wind and photovoltaic energy and in the improvement of transmission systems. The dynamic market is also contributing to the success of this area of technology which now employs nearly 382,000 people, more than double what it was eight years ago.

Renewables also mean opportunities for insurers and investors. In addition to specific insurance for major projects like wind and solar farms, the role of insurers as financial backers for the energy sector is growing in importance. Even the sovereign debt crisis is driving demand for wind and solar power as investments. Due to economic uncertainty, more and more companies are looking for alternative investments that provide good returns, and have found them here – more wind in the sails of renewable energies.

Global climate change is one of the major challenges of this century. That is why Allianz is taking on climate-based activities as part of its regular business. New energy sources are now an important asset class, with Allianz having invested over 1.3 billion euros in this growth market since 2005. In addition, Allianz has already developed numerous eco-friendly products and services, green solutions that help protect the climate and mitigate the effects of climate change. From insurance cover for solar panels on the roof to rebates for vehicles with hybrid motors and asset management of funds that invest in sustainable environmental management: climate protection is now a regular part of Allianz strategy.

But what are the new challenges presented by customers? How does Allianz contribute to the shift in energy policy? And what does Allianz have to say about the overall wind and solar industry?

These questions and more will be discussed at an Allianz press round table on June 11th which we will report on in the days to follow.

 
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