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Global Marketplace Insights – Natural Resources Q1 2024

Market Insights

April 16, 2024

Steven Munday, Global Renewable Energy Leader, Natural Resources, discusses the most recent developments in the various insurance markets for the key Natural Resources sectors.
Natural Resources market trends

Hear from our experts and learn more about the latest insurance marketplace trends.
For more information on UL 9540A as discussed in the video, please visit the following source: Large Scale Testing of Energy Storage Systems: Fire Protection and Response Considerations.


Global Marketplace Insights – Natural Resources Q1 2024

Hi, I'm Steve Munday, Natural Resources, Global Renewable Energy Leader at WW based in London.

Battery energy storage is now an essential part of the renewable energy low carbon agenda.

We're reaching a pivotal moment where there is sufficient renewable energy and power generation to create meaningful intimacy on the electricity grids globally.

We all recognise that power generation from renewable energy sources do not provide consistent base load export.

So where does the power come from overnight, when the wind is not blowing and how do we capture excess energy produced in times of high renewal power generation for use in low supply and high demand periods?

There are few answers outside of large expensive infrastructure schemes such as pump storage hydros. Industrial scale batteries appear to be the answer and we are seeing rapid growth in the evolution and deployment in the UK, Australia, North America, Europe and globally.

The insurance market has learned the hard way when it comes to BESS technology, an extreme fire in the smaller 50 MW Bez facility in Hawaii hitting a leading London renewable energy insurer for $27 million in 2012 being a constant reminder of the risks involved.

WTW continue to monitor Bez claims through our RELD (Renewable Energy Loss Database), which now has an aggregate of over a billion dollars of renewable energy claims and losses resolved by WTW globally.

However, we haven't seen any meaningful losses in 2022 and the opportunity for thermal runaway fire to jump from one container to another container is not being experienced, giving insurers increased confidence in manufacturers assertions of the quality of their evolving technology being fit for purpose, which now more frequently being considered in sizeable facilities.

We are supporting early risk and development discussions on consented projects upwards of 300 megawatts with 10 GW projects being conceptually discussed globally.

The London and international insurance markets attitude to BESS has changed dramatically over the last 24 months, whether towards standalone facilities or facilities integrated into hybrid generating systems and we see a number of new supporting markets deploying capacity in this sector.

We are seeing reductions in technology costs globally together with investment in BESS, which is predicted to grow continually over the course of the twenty 20s.

McKinsey and Company analysis shows that there was more than 5 billion invested in BESS in 2022, which is almost a threefold increase for the previous year.

They expect the global BESS market to reach between 120 billion and 150 billion by 2030.

Whilst the rates and the terms and conditions the market are starting to stabilise, there are varying material risks and attitudes to the opportunities.

These insurers still focusing on the technical elements of the projects such as the type of chemistry, the physical separation of the units to reduce potential maximum loss compliance with UL9540A, testing standards and the experience of the original equipment manufacturers with something more preferred by insurers than others based on insurers own experience in this developing sector.

At WTW we're pleased to launch our proprietary global BESS facility responding to the needs of our developers and operators in the sector.

Harnessing the skill and experience of a number of leading BESS insurers to provide a smart solution for strong bankable, market leading risk transfer solutions with some of the most competitive rates available.

Please do feel free to connect with myself or your WTW Global Renewable Energy Representative.

Thank you very much.


Global Renewable Energy Leader, Natural Resources

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