Q&A Interview: Allianz Capital Partners' Georg Hoefler on offshore wind

The tide is turning for institutional investment in offshore wind.

February 10, 2022
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Q&A Interview: Allianz Capital Partners' Georg Hoefler on offshore wind

In December, Allianz Capital Partners agreed to buy 25.2% of the 1.5GW Hollandse Kust Zuid (HKZ) offshore wind project off the Dutch coast from German chemicals giant BASF. It is set to be the world’s largest operational when it is commissioned, which is scheduled to happen in 2023.

A Word About Wind spoke to Georg Hoefler, head of renewables transactions at Allianz Capital Partners, about what the deal shows regarding the appeal of offshore wind to institutions that would previously have seen it as too risky.

What does this deal tell us about your strategy?

Allianz has been an equity investor in wind and solar plants since 2005, which makes us one of the first financial investors to enter the renewables sector.

Our investment strategy evolves with the developments in renewable energy markets, and we strive for a diversified portfolio across technology and geography. The investment in HKZ is an important milestone, as it is Allianz’s first offshore wind investment and the first renewables equity investment in the Netherlands. We are looking to diversify even further and will consider investments in new technologies, additional geographies, and at earlier project stages including development.

Historically, Allianz has avoided offshore wind due to the extra cost and risk compared to onshore wind. What has changed?

We see offshore wind as a mature technology with a substantial track record. It has become cost competitive, and the risks are well understood.

Over the past 10 years, the global offshore wind market has expanded from 3GW to 35GW. Recent projects have been delivered on time and on budget; and the latest generation of wind farms is performing in line with expectations.

Finally, experienced investors have been able to manage offshore risks. We expect continuous global growth in capacity to offer significant investment opportunities, as long as they are adequately structured and risks mitigated.

How big will offshore wind be in your upcoming deal pipeline?

Allianz has invested almost €7bn in renewable energy projects that are key to drive the energy transition. We are analysing all upcoming opportunities to see if they fit well in our investment strategy. Long term, I think offshore wind could play a substantial role in building a well-diversified portfolio for Allianz.

Europe will remain our main focus with regards to offshore wind for the coming two years. With that said, we will be closely watching the development in the offshore wind market in the US and selected countries in the Asia-Pacific region and could consider potential investments if we can identify attractive opportunities.

Why did HKZ particularly appeal?

Once fully operational, HKZ will be the largest offshore wind farm in the world, with 140 turbines and total installed capacity of 1.5GW; and completely realised without government financial support.

We can also rely on long-term partnerships with a pair of strong industrial players: Vattenfall is one of the most experienced counterparties in offshore wind, and BASF will ensure a strong contracted revenue stream for many years through a long-term fixed-price power purchase agreement.

Do governments need to move quicker to open development opportunities in offshore wind in Europe, and capitalise on high levels of investor interest?

Yes, governments need to increase their support for renewables across the board to achieve their long-term climate goals. New offshore development opportunities are just one example, but also more efficient permitting procedures, accelerated grid expansion programs, or new and more ambitious Contracts for Difference tender schemes could play important roles.

What are the biggest opportunities and challenges you face right now?

As we continue our renewables investment programme, it is challenging to find suitable investment opportunities to support our portfolio decarbonisation goals for 2025 and 2050. But in recent years, global renewables markets like offshore wind and battery storage have increasingly matured, making them attractive for long-term institutional investors like Allianz, and have opened diversification opportunities.

We are also closely monitoring the trend from pure-play renewables investments to a wider energy transition, where renewable energies play an essential part, such as in the decarbonisation of industrial processes.

In December, Allianz Capital Partners agreed to buy 25.2% of the 1.5GW Hollandse Kust Zuid (HKZ) offshore wind project off the Dutch coast from German chemicals giant BASF. It is set to be the world’s largest operational when it is commissioned, which is scheduled to happen in 2023.

A Word About Wind spoke to Georg Hoefler, head of renewables transactions at Allianz Capital Partners, about what the deal shows regarding the appeal of offshore wind to institutions that would previously have seen it as too risky.

What does this deal tell us about your strategy?

Allianz has been an equity investor in wind and solar plants since 2005, which makes us one of the first financial investors to enter the renewables sector.

Our investment strategy evolves with the developments in renewable energy markets, and we strive for a diversified portfolio across technology and geography. The investment in HKZ is an important milestone, as it is Allianz’s first offshore wind investment and the first renewables equity investment in the Netherlands. We are looking to diversify even further and will consider investments in new technologies, additional geographies, and at earlier project stages including development.

Historically, Allianz has avoided offshore wind due to the extra cost and risk compared to onshore wind. What has changed?

We see offshore wind as a mature technology with a substantial track record. It has become cost competitive, and the risks are well understood.

Over the past 10 years, the global offshore wind market has expanded from 3GW to 35GW. Recent projects have been delivered on time and on budget; and the latest generation of wind farms is performing in line with expectations.

Finally, experienced investors have been able to manage offshore risks. We expect continuous global growth in capacity to offer significant investment opportunities, as long as they are adequately structured and risks mitigated.

How big will offshore wind be in your upcoming deal pipeline?

Allianz has invested almost €7bn in renewable energy projects that are key to drive the energy transition. We are analysing all upcoming opportunities to see if they fit well in our investment strategy. Long term, I think offshore wind could play a substantial role in building a well-diversified portfolio for Allianz.

Europe will remain our main focus with regards to offshore wind for the coming two years. With that said, we will be closely watching the development in the offshore wind market in the US and selected countries in the Asia-Pacific region and could consider potential investments if we can identify attractive opportunities.

Why did HKZ particularly appeal?

Once fully operational, HKZ will be the largest offshore wind farm in the world, with 140 turbines and total installed capacity of 1.5GW; and completely realised without government financial support.

We can also rely on long-term partnerships with a pair of strong industrial players: Vattenfall is one of the most experienced counterparties in offshore wind, and BASF will ensure a strong contracted revenue stream for many years through a long-term fixed-price power purchase agreement.

Do governments need to move quicker to open development opportunities in offshore wind in Europe, and capitalise on high levels of investor interest?

Yes, governments need to increase their support for renewables across the board to achieve their long-term climate goals. New offshore development opportunities are just one example, but also more efficient permitting procedures, accelerated grid expansion programs, or new and more ambitious Contracts for Difference tender schemes could play important roles.

What are the biggest opportunities and challenges you face right now?

As we continue our renewables investment programme, it is challenging to find suitable investment opportunities to support our portfolio decarbonisation goals for 2025 and 2050. But in recent years, global renewables markets like offshore wind and battery storage have increasingly matured, making them attractive for long-term institutional investors like Allianz, and have opened diversification opportunities.

We are also closely monitoring the trend from pure-play renewables investments to a wider energy transition, where renewable energies play an essential part, such as in the decarbonisation of industrial processes.

In December, Allianz Capital Partners agreed to buy 25.2% of the 1.5GW Hollandse Kust Zuid (HKZ) offshore wind project off the Dutch coast from German chemicals giant BASF. It is set to be the world’s largest operational when it is commissioned, which is scheduled to happen in 2023.

A Word About Wind spoke to Georg Hoefler, head of renewables transactions at Allianz Capital Partners, about what the deal shows regarding the appeal of offshore wind to institutions that would previously have seen it as too risky.

What does this deal tell us about your strategy?

Allianz has been an equity investor in wind and solar plants since 2005, which makes us one of the first financial investors to enter the renewables sector.

Our investment strategy evolves with the developments in renewable energy markets, and we strive for a diversified portfolio across technology and geography. The investment in HKZ is an important milestone, as it is Allianz’s first offshore wind investment and the first renewables equity investment in the Netherlands. We are looking to diversify even further and will consider investments in new technologies, additional geographies, and at earlier project stages including development.

Historically, Allianz has avoided offshore wind due to the extra cost and risk compared to onshore wind. What has changed?

We see offshore wind as a mature technology with a substantial track record. It has become cost competitive, and the risks are well understood.

Over the past 10 years, the global offshore wind market has expanded from 3GW to 35GW. Recent projects have been delivered on time and on budget; and the latest generation of wind farms is performing in line with expectations.

Finally, experienced investors have been able to manage offshore risks. We expect continuous global growth in capacity to offer significant investment opportunities, as long as they are adequately structured and risks mitigated.

How big will offshore wind be in your upcoming deal pipeline?

Allianz has invested almost €7bn in renewable energy projects that are key to drive the energy transition. We are analysing all upcoming opportunities to see if they fit well in our investment strategy. Long term, I think offshore wind could play a substantial role in building a well-diversified portfolio for Allianz.

Europe will remain our main focus with regards to offshore wind for the coming two years. With that said, we will be closely watching the development in the offshore wind market in the US and selected countries in the Asia-Pacific region and could consider potential investments if we can identify attractive opportunities.

Why did HKZ particularly appeal?

Once fully operational, HKZ will be the largest offshore wind farm in the world, with 140 turbines and total installed capacity of 1.5GW; and completely realised without government financial support.

We can also rely on long-term partnerships with a pair of strong industrial players: Vattenfall is one of the most experienced counterparties in offshore wind, and BASF will ensure a strong contracted revenue stream for many years through a long-term fixed-price power purchase agreement.

Do governments need to move quicker to open development opportunities in offshore wind in Europe, and capitalise on high levels of investor interest?

Yes, governments need to increase their support for renewables across the board to achieve their long-term climate goals. New offshore development opportunities are just one example, but also more efficient permitting procedures, accelerated grid expansion programs, or new and more ambitious Contracts for Difference tender schemes could play important roles.

What are the biggest opportunities and challenges you face right now?

As we continue our renewables investment programme, it is challenging to find suitable investment opportunities to support our portfolio decarbonisation goals for 2025 and 2050. But in recent years, global renewables markets like offshore wind and battery storage have increasingly matured, making them attractive for long-term institutional investors like Allianz, and have opened diversification opportunities.

We are also closely monitoring the trend from pure-play renewables investments to a wider energy transition, where renewable energies play an essential part, such as in the decarbonisation of industrial processes.

In December, Allianz Capital Partners agreed to buy 25.2% of the 1.5GW Hollandse Kust Zuid (HKZ) offshore wind project off the Dutch coast from German chemicals giant BASF. It is set to be the world’s largest operational when it is commissioned, which is scheduled to happen in 2023.

A Word About Wind spoke to Georg Hoefler, head of renewables transactions at Allianz Capital Partners, about what the deal shows regarding the appeal of offshore wind to institutions that would previously have seen it as too risky.

What does this deal tell us about your strategy?

Allianz has been an equity investor in wind and solar plants since 2005, which makes us one of the first financial investors to enter the renewables sector.

Our investment strategy evolves with the developments in renewable energy markets, and we strive for a diversified portfolio across technology and geography. The investment in HKZ is an important milestone, as it is Allianz’s first offshore wind investment and the first renewables equity investment in the Netherlands. We are looking to diversify even further and will consider investments in new technologies, additional geographies, and at earlier project stages including development.

Historically, Allianz has avoided offshore wind due to the extra cost and risk compared to onshore wind. What has changed?

We see offshore wind as a mature technology with a substantial track record. It has become cost competitive, and the risks are well understood.

Over the past 10 years, the global offshore wind market has expanded from 3GW to 35GW. Recent projects have been delivered on time and on budget; and the latest generation of wind farms is performing in line with expectations.

Finally, experienced investors have been able to manage offshore risks. We expect continuous global growth in capacity to offer significant investment opportunities, as long as they are adequately structured and risks mitigated.

How big will offshore wind be in your upcoming deal pipeline?

Allianz has invested almost €7bn in renewable energy projects that are key to drive the energy transition. We are analysing all upcoming opportunities to see if they fit well in our investment strategy. Long term, I think offshore wind could play a substantial role in building a well-diversified portfolio for Allianz.

Europe will remain our main focus with regards to offshore wind for the coming two years. With that said, we will be closely watching the development in the offshore wind market in the US and selected countries in the Asia-Pacific region and could consider potential investments if we can identify attractive opportunities.

Why did HKZ particularly appeal?

Once fully operational, HKZ will be the largest offshore wind farm in the world, with 140 turbines and total installed capacity of 1.5GW; and completely realised without government financial support.

We can also rely on long-term partnerships with a pair of strong industrial players: Vattenfall is one of the most experienced counterparties in offshore wind, and BASF will ensure a strong contracted revenue stream for many years through a long-term fixed-price power purchase agreement.

Do governments need to move quicker to open development opportunities in offshore wind in Europe, and capitalise on high levels of investor interest?

Yes, governments need to increase their support for renewables across the board to achieve their long-term climate goals. New offshore development opportunities are just one example, but also more efficient permitting procedures, accelerated grid expansion programs, or new and more ambitious Contracts for Difference tender schemes could play important roles.

What are the biggest opportunities and challenges you face right now?

As we continue our renewables investment programme, it is challenging to find suitable investment opportunities to support our portfolio decarbonisation goals for 2025 and 2050. But in recent years, global renewables markets like offshore wind and battery storage have increasingly matured, making them attractive for long-term institutional investors like Allianz, and have opened diversification opportunities.

We are also closely monitoring the trend from pure-play renewables investments to a wider energy transition, where renewable energies play an essential part, such as in the decarbonisation of industrial processes.

In December, Allianz Capital Partners agreed to buy 25.2% of the 1.5GW Hollandse Kust Zuid (HKZ) offshore wind project off the Dutch coast from German chemicals giant BASF. It is set to be the world’s largest operational when it is commissioned, which is scheduled to happen in 2023.

A Word About Wind spoke to Georg Hoefler, head of renewables transactions at Allianz Capital Partners, about what the deal shows regarding the appeal of offshore wind to institutions that would previously have seen it as too risky.

What does this deal tell us about your strategy?

Allianz has been an equity investor in wind and solar plants since 2005, which makes us one of the first financial investors to enter the renewables sector.

Our investment strategy evolves with the developments in renewable energy markets, and we strive for a diversified portfolio across technology and geography. The investment in HKZ is an important milestone, as it is Allianz’s first offshore wind investment and the first renewables equity investment in the Netherlands. We are looking to diversify even further and will consider investments in new technologies, additional geographies, and at earlier project stages including development.

Historically, Allianz has avoided offshore wind due to the extra cost and risk compared to onshore wind. What has changed?

We see offshore wind as a mature technology with a substantial track record. It has become cost competitive, and the risks are well understood.

Over the past 10 years, the global offshore wind market has expanded from 3GW to 35GW. Recent projects have been delivered on time and on budget; and the latest generation of wind farms is performing in line with expectations.

Finally, experienced investors have been able to manage offshore risks. We expect continuous global growth in capacity to offer significant investment opportunities, as long as they are adequately structured and risks mitigated.

How big will offshore wind be in your upcoming deal pipeline?

Allianz has invested almost €7bn in renewable energy projects that are key to drive the energy transition. We are analysing all upcoming opportunities to see if they fit well in our investment strategy. Long term, I think offshore wind could play a substantial role in building a well-diversified portfolio for Allianz.

Europe will remain our main focus with regards to offshore wind for the coming two years. With that said, we will be closely watching the development in the offshore wind market in the US and selected countries in the Asia-Pacific region and could consider potential investments if we can identify attractive opportunities.

Why did HKZ particularly appeal?

Once fully operational, HKZ will be the largest offshore wind farm in the world, with 140 turbines and total installed capacity of 1.5GW; and completely realised without government financial support.

We can also rely on long-term partnerships with a pair of strong industrial players: Vattenfall is one of the most experienced counterparties in offshore wind, and BASF will ensure a strong contracted revenue stream for many years through a long-term fixed-price power purchase agreement.

Do governments need to move quicker to open development opportunities in offshore wind in Europe, and capitalise on high levels of investor interest?

Yes, governments need to increase their support for renewables across the board to achieve their long-term climate goals. New offshore development opportunities are just one example, but also more efficient permitting procedures, accelerated grid expansion programs, or new and more ambitious Contracts for Difference tender schemes could play important roles.

What are the biggest opportunities and challenges you face right now?

As we continue our renewables investment programme, it is challenging to find suitable investment opportunities to support our portfolio decarbonisation goals for 2025 and 2050. But in recent years, global renewables markets like offshore wind and battery storage have increasingly matured, making them attractive for long-term institutional investors like Allianz, and have opened diversification opportunities.

We are also closely monitoring the trend from pure-play renewables investments to a wider energy transition, where renewable energies play an essential part, such as in the decarbonisation of industrial processes.

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Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.