Munich – Allianz has already invested more than a billion euros in wind farms – but only on land. By contrast, the insurance group is reluctant to invest in offshore projects. The risk can not be estimated.
So far, Allianz Versicherung has not invested any money in offshore wind farms and expects government support to insure large wind farms. The risks of these projects are still very little known, said Allianz climate strategist Armin Sandhövel on Monday in Munich. By contrast, Europe’s largest insurer has already invested 1.3 billion euros in wind turbines on land and in solar energy, yielding 7 percent of their return, investment expert David Jones said.
Great interest in onshore and solar
“We are currently not planning to invest in offshore,” Sandhövel said. Other institutional investors did not show any appetite, while they were increasingly competing in onshore and solar investments in search of non-financial investments.
As an insurer, Allianz is already active in several offshore wind farms. But large volumes can not carry the insurance industry alone, Sandhövel said and suggested that the state takes part of the risks or guarantees. The federal government wants to replace nuclear energy, especially by large wind farms far out in the North Sea. But that is new territory – Siemens has just had to write off half a billion euros as a lesson.
Hardly any experience with offshore technology
With the technology and with the influence of sea and storms there is still little experience, said an alliance spokeswoman. A storm or damage to a submarine cable could paralyze several wind farms. Because many weather-related damages could only be repaired in the summer, long interruptions in operation threatened with enormous follow-up costs.
Jones said, “We do not want to invest in unknown risks.” Sandhövel explained that investments in offshore facilities would certainly have discussions with the Financial Market Authority. Thanks to state feed-in tariffs, renewable energies promise years of stable income independent of financial markets, currency and interest rates. But in a bad investment threatened years of losses, explained Sandhövel.
Power lines would be a good investment
Allianz has invested around 1.3 billion euros in onshore wind farms in Germany, France and Italy as well as in solar plants in France and Italy. The 42 projects have a total capacity of 733 megawatts, equivalent to half a nuclear power plant.
Good investment opportunities were no longer so easy to find, said Sandhövel. Electricity supply would certainly be a good investment – but the legislature had separated energy production and energy distribution, and investors would have to decide here. Jones said that in view of the interest in the success of the energy transition, he expects a political solution to this problem.