Who do you think wind energy will pass the additional insurance premiums on to? Methinks the consumer,


DAILY NEWS             Jul 25, 2013 2:27 PM             – 0 comments            

Renewable energy industry spending on insurance could triple by 2020

 

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             2013-07-25            


The renewable energy industry could be spending up to $2.8 billion yearly on insurance by the end of the decade, about three times as much as it is now by 2020,  according to a new report from Bloomberg New Energy Finance.

Insurance spending growing for wind and solar energy projects

The report, sponsored by major reinsurer Swiss Re, looked at six markets for solar and wind energy, including Australia, China, France, Germany, the United Kingdom and the United States.

Insurance premium volumes in those markets could potentially increase from $850 million today to between $1.5 billion and $2.8 billion by 2020, the report suggests.

Current projections suggest that new renewable power capacity built around the world between now and 2030 will account for more than $2 trillion of total investment, according to Swiss Re.

Of that, 75% or 900GW of capacity additions, will be in the solar and wind sectors, both onshore and offshore, and over half of this is attributable to the six major markets.

The growth is being driven by owners and developers looking to make their renewable energy projects less risky, and therefore more attractive to potential investors, especially to institutional investors such as pension funds, Swiss Re also notes.

“New solar parks and wind farms require enormous investments,” Juerg Trueb, head of Environmental and Commodity Markets at Swiss Re Corporate Solutions commented in a statement.

“Not only that, you are also asking investors to put their money into relatively new and sometimes less mature technologies,” Trueb added. “To reassure investors you really need sound risk management.”

Offshore wind deployments, which are exposed to adverse weather and operate in difficult geographic conditions, are also driving insurance need, Swiss Re says.

“The analysis conducted for this report shows that the demand for risk management solutions will increase partly because the renewable sector will simply get bigger, but also because of increasing uncertainty affecting power markets in general,” noted Guy Turner, chief economist at Bloomberg New Energy Finance and lead author of the report.

“As the renewable sector matures and becomes part of the mainstream energy industry, it will need to evolve from an innovative sector where risks are taken on the chin to one where returns are predictable and there are fewer surprises.”

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