The renewable energy infrastructure investment opportunity for UK pension schemes

This research report demystifies investing in renewable energy for pension schemes and other investors, in the context of the UK.

Renewable energy is one of the fastest growing sectors worldwide, dominated by solar PV and wind technologies, and with a UK current market size of operational assets estimated at £40 bn. The UK energy transition is already underway with renewable energy delivering 25% of energy generation during 2016.

The long-term UK policy landscape is supportive of a growing renewable energy sector, underpinned by the Climate Change Act, and with the recent publication of the Clean Growth Strategy. Using available market data and academic research the report finds that the asset class can deliver low risk, inflation-linked investment returns of 5-10%.

Lastly the report proposes how UK pension schemes can become new entrants in the renewable energy market and how the local government pension schemes are targeting higher infrastructure allocations which are leading to successful direct investments into renewable energy infrastructure

Commenting on the report, the Green Finance Initiative’s Chairman Sir Roger Gifford said:

“Climate control and reducing carbon emissions are a priority for countries across the world.

“The UK is an established leader when it comes to financing green infrastructure projects – and there are still investment opportunities that need to be explored.

“This report reveals there is potential to tap into even greater pools of finance, which would see carbon emissions lowered, provide jobs across the UK, and ensure that pension holders see a good return on investments. It truly can be a ‘win-win’.”

The renewable energy infrastructure investment opportunity for UK pension schemes.

This report was commissioned by the City of London’s Green Finance Initiative and produced by HSBC Global Asset Management and the global sustainable energy think-tank, IEEFA.