MELBOURNE, July 31, 2024 — The renewable energy sector has shown resilience and optimism in 2024 despite facing constraints such as climate issues, supply chain disruption, casualty deterioration, social inflation and geopolitical conflicts. However, overall profitability remains challenging due to variable results within energy classes according to the Renewable Energy Market Review 2024, published today by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company.
The review, titled Prepare for storms, plan for stability, includes commentary from international experts and specialists in areas such as battery energy storage systems (BESS), offshore wind, floating solar installations and green hydrogen, as well as a detailed analysis of the insurance markets for renewable energy. Together, they provide a comprehensive analysis of the risks and opportunities in 2024.
Several key trends are explored in this years’ review:
John Rae, Head of Renewable Energy, Australasia at WTW, said: “Renewable energy continues to be a growth sector across Australia, with renewable energy sources accounting for 40% of the generation into Australia’s National Electricity Market in 2023, up from 35% in 2022.
“In the last year, projects have grown in scale and complexity to meet the growing needs of the 82% clean energy target by 2030 set by the Australian Dept of Climate Change, Energy, the Environment and Water. Construction has begun on the largest solar, wind, and battery projects ever seen in the region, including New England Solar Farm, Golden Plains Wind Farm and Collie battery energy storage system. Investment for renewables continues to grow, especially with the recent introduction of the Capacity Investment Scheme (CIS) by the Australian Federal Government.
“From an insurance perspective, natural catastrophe risks continue to be front of mind for insurers in the region, with global and local hail losses contributing to heavy restrictions on solar portfolios and the need to seek out additional global capacity and support to build sustainable limits. This has led to increased scrutiny on the risk management and mitigation processes in place for developers and contractors.
“Alongside hail, bushfire and windstorm risks continue be a concern for local insurers. With the introduction of concentrated Renewable Energy Zones (REZs), we see heavy development in natural catastrophe-prone areas and the risk of a high or full-limit loss across multiple sites because a single natural catastrophe event becomes a more realistic concern.
“To capitalise on emerging opportunities, renewable energy risk and insurance buyers should continue to engage with risk advisors and insurers, employing smarter solutions to navigate the complexities of the evolving landscape.”
The complete report can be downloaded here.
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