The renewables sector is on the cusp of its next wave of evolution, pioneering the development and scaling of clean energy technologies. Looking at the energies that renewables companies are prioritizing in our 2025 Global Clean Energy Survey[1], solar photovoltaic (PV) is by far the most prominent in the near term, followed by hydropower and fixed offshore wind – all available as more affordable and scalable technologies.
However, on a longer-term horizon, there’s a big shift toward more developing and nascent technologies.
According to GlobalData, battery energy storage systems (BESS) capacity grew by 49% from 2023 to 2024[2], with McKinsey forecasting this figure is likely to quadruple between by 2030[3]. Investment has grown eight-fold from $6.8 billion in 2018 to $53.9 billion in 2024[3], with much of this investment focused on increasing energy providers’ flexibility.
Around the world, governments are increasing their support for battery storage to solve the problems of grid stability and intermittency when the wind doesn’t blow, and the sun doesn’t shine – providing a stable supply of energy that’s an alternative to sources such gas and thermal coal. In the long run, BESS growth will stem more from the build-out of solar parks and wind farms, which will need batteries to handle their short-duration storage needs.
Meanwhile, for the full hydrogen project pipeline to materialize, the sector would need to grow at an unprecedented compound annual growth rate of over 90% from 2024 until 2030[4]. This is well above the growth experienced by solar PV during its fastest expansion phases[5]. Although the development of renewable ‘green’ hydrogen can be held up by high production costs and a lack of distribution infrastructure and storage, all of the top 10 largest hydrogen projects are green plants, and most are in the feasibility stage[6]. In the UK, green hydrogen is pegged as the lead technology in a new £5.8 billion package of clean energy investments announced by the Government[7] – an encouraging indicator of the direction of travel for hydrogen projects.
As the clean energy transition pushes on, the technology curve for renewables companies will be sharp. They will need to repower their systems every few years and be ready to accommodate bigger wind turbines, solar and battery installations, while also working at the cutting edge of developing new energy sources.
This will be a challenge for insurance markets, which have found it difficult to accommodate newer and more complex technologies at pace.
The insurance market is fully aware of the trillions of investment, it's heavily investing itself in restructuring, retraining and recruiting underwriters and brokers for the short- and long-term futures – making them well-positioned as enablers of the global energy transition. While it was encouraging to see from our survey that price is not the greatest obstacle to insurance, renewables companies pointed to barriers they face in transferring their risks.
The renewable energy market has a mixed record of delivering profit to insurers. The fast pace of innovation, unknowns of prototypical technologies and high frequency of past losses has challenged insurer appetite. A disconnect has emerged between technology readiness and commercial insurability.
Insurers are focused on profitability. Faced with developmental technologies, insurers are encountering new risks in new ways that they don’t always fully understand.
To protect and uphold their profitability goals, insurers are applying wide exclusions and higher deductibles, looking for more risk information, and demanding tougher risk engineering requirements and controls.
For the insurance markets, not fully understanding the technicalities of renewable energy projects can stifle innovation, which is creating a gap in suitable coverage as technologies evolve at pace.
Without the support of the insurance markets, innovation and growth are limited.
Achieving growth objectives means unlocking project financing and building efficiencies to scale up operations. But wide or excessive exclusions, limited duration of insurance, a lack of suitable products and high deductibles all push the pendulum of accountability toward risk retention, rather than transfer.
Investments in clean energy aren't short term so when planning renewables projects that last five–10 years, the general insurance market’s approach of annualized covers creates a high level of uncertainty.
For companies that haven’t yet built sufficient balance sheet strength, a risk strategy that majors in retention isn’t sustainable.
Renewable and clean energy technologies will be critical in supporting all natural resources sectors on their clean energy journey over the next decade.
On a five–10 year horizon, it’s clear that renewable and clean technologies will be increasingly integrated into all sectors within the natural resources industry as companies seek to decarbonize their operational footprint[1]:
These findings suggest a twin-track future. Renewables companies will be pushing the boundaries of clean energy technology, innovating and scaling new sources of low-carbon energy production and storage for electrification. At the same time, they’ll be providing traditional sectors with the technologies and know-how to help them decarbonize, transition their operations or generate more of their own internal energy needs to be from renewable or clean sources.
This mixed picture in which renewables are both in the vanguard of the transition, and supporting other sectors to change more incrementally, reflects a realignment currently underway.
The findings of our Global Clean Energy Survey have been a wake-up call for the natural resources industry at large. Insurers are well-positioned to be the enablers of investment in the global energy transition and we’re seeing signs of more flexibility in the market and a willingness to consider creative solutions. But there’s still much work to do.
As we move into the next phase of the renewables revolution, renewable energy companies continue to push for growth and there are opportunities to make this a reality, but the inroads to other sectors will have twists and turns along the way. For example, amid a recent uptick in investment in fossil fuels, some companies in sectors such as oil and gas are balancing near-term shareholder return on investment (ROI) with long-term decarbonization plans and dialing back their current investment in renewables. Natural resources is at a tipping point.
In making smart decisions, renewable and clean energy company leaders will need to keep their finger on the pulse of risk trends, harness the power of risk engineering and partner with sector-focused advisors and brokers who can negotiate optimal cover — protecting assets today, and fueling growth for tomorrow.
WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
