Published on 30 July 2024
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Renewable Energy Market Update H2 2024
Published on 30 July 2024
The first half of 2024 has seen a continuation of natural perils impacting the insurance market, giving rise to the frequency and magnitude of solar claims.
Some of the assets affected have been in unmodelled locations due to the data software not yet having full accuracy for all perils geographically. From January 2025, there will be multiple data software upgrade products that will become available to improve the visibility of all Natural Catastrophe exposures.
The Alesco loss modelling team is at the forefront of utilizing the latest software and running data through our in-house loss modeling product to provide clients (and their insurers) with site-specific exposure details.
The onshore wind market is seeing a rise in Chinese Original Equipment Manufacturers (OEMs) being installed in certain territories by offering an attractive cost reduction compared to their European-origin OEM competition. This is likely to drive the need, by client and insurer, for an extended monitoring period to foresee the success of these turbines and their warranties. Ultimately, this is a positive for the renewable energy industry globally as it pushes forward to reach installed Gigawatt (GW) targets.
The offshore wind market remains attractive to new insurers coming in to increase market share globally. Standardization can be seen in the sector, which should lead to clearer claims outcomes and shorter development windows, a necessity to meet GW targets set for 2030 by many countries that already have a considerable GW number of installed assets.
The BESS market is stable as site layouts have become more uniform in guidelines for spacing and equipment separation. This enables insurers to quantify Probable Maximum Loss (PML) values more accurately, which supports rating and deductible stability.
Overall, the downward premium rating turn of the market has begun to take place for clean or well-run accounts where competition amongst insurers for market share is taking place. Further improvements to existing technology protections and performance will continue this trend as new and existing insurer capacity increases.
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Duncan Gordon
Duncan joined Alesco at the beginning of 2018, after seven years specialising in construction and operational insurances within the offshore and onshore renewable energy sectors.
He has direct experience of project finance transactions and ensuring that all insurance conditions precedent to financial close are satisfied. The key elements of this service delivery are efficient communication and the ability to coordinate amongst both the international and local placement teams.
Duncan has wide-ranging experience of renewable energy projects throughout the lifecycle and is a skilled practitioner in providing insurance solutions for large and complex assets and portfolios globally. He currently provides guidance and insurance solutions to clients in North America, the Middle East, Europe, Latin America, Australia and the UK.
