Research

Power and Renewable Energy Market Review 2018

Insurance – the game-changer?

January 25, 2018
The power and renewable energy industries continue to operate in a climate of change with the world embarking on “an epochal transition” away from hydrocarbon-fuelled economic growth.
a worker is checking something

Our 2018 Power and Renewable Energy Market Review looks at the factors underpinning industry transition and how the insurance sector is proving to be a game-changer.

Indeed, much of the impetus for the strong move away from building new coal-fired power plants and phasing out existing ones is coming from the insurance sector.

2017 saw a number of leading global insurers announce that they will no longer invest in or offer insurance to companies with significant coal generation or mining operations. In 2018, it appears that others will follow suit.

Risk management strategies

The Review evaluates risk management impacts and strategies on subjects as diverse as the role of private equity and the future of work in power and renewable energy, as well as a focus on battery storage, floating offshore wind structures, solar farms and critical materials. There’s also an article on de-risking the supply chain – a critical area of concern for many risk managers in these sectors.

Market resilience

Insurance market resilience was put to the test by the most active Atlantic hurricane season in recent years, which may make 2017 the worst year for overall insured losses in history. Huge uncertainty remains over both insurance and reinsurance claims arising from Hurricanes Harvey, Irma and Maria and their impact on market capacity, rates and coverage.

Nonetheless it appears this will not result in the long-awaited return of a truly hard market. It seems a US$100bn+ loss year is no longer enough to actually ‘turn’ the market.

For well-managed power and renewable energy sector risks going into 2018, in the absence of other factors such as claims or significant natural catastrophe exposure, the effect of any market hardening will probably be modest. Still, with significant loss levels, we have included a special feature from our analytics team that highlights modern ways of managing natural catastrophe risk.

In this issue

While the Review is international, and there is a comprehensive section devoted to global issues, here are some articles we believe are of most interest to Australian readers.

  • Welcome to the climate of change!
  • M&A and Private Equity (PE) investment in renewable energy: increasing the pace
  • Private Equity investment in renewables: a role for insurance?
  • Battery storage: shaping the future of renewable energy
  • De-risking supply chain disruption to wind energy projects
  • The future of power and energy captives
  • Managing cyber risk in the power sector.

New Zealand readers should also take note of “Hot rocks: the rise of geothermal energy”.

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