Published on 08 December 2022
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Energy Market Update: Renewable Energy
Published on 08 December 2022
The renewables insurers were rocked again by significant volume of hailstorm losses totalling circa USD 120m during May in Texas across multiple sites.
This has seen difficult approaches to NatCat exposed sites without adequate protection. However, overall appetite will not be fully affected until reinsurance treaty renewals in January.
The rapid evolution of wind turbine technology has seen onshore turbines reach 7MW in sold models. The impact on blade replacement costs has seen comparative deductible rises requested from a few insurers. Moreover, the market remains affected by technology failures and attritional claims such as lighting damage maintain the rating basis with the back drop of increased revenues and increasing lead times along with replacement values.
The battery market, whilst seeing around a dozen core insurers dependent on location, has stabilised with clear risk requirements outlined related to fire protection.
Hydrogen draws excitement from markets although it is many years off of significant infrastructure investment to build operational books in the energy market. In the interim period the construction market provides support to a few notable billion-dollar projects and smaller scale hydrogen deployments of varying process technologies.
General Market
Renewals are at either slight reduction to 10% rate rise. New placement projects are at a similar level to the previous quarter however site and location specific factors draw vast variability in rates due to solar and wind having differing risk profiles to technology and natural catastrophe perils.
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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.
