Renewable energy industry insurance spending seen to triple by 2020

Jul 25, 2013 - The renewable energy industry may triple its annual spending for insurance to USD 2.8 billion (EUR 2.123bn) by 2020 to cover project risks, a new report by Bloomberg New Energy Finance sponsored by Reinsurer Swiss Re (VTX:SREN) showed.

Insurance demand from renewable energy owners and developers is increasing, given the USD 2 trillion investments in the sector expected by 2030, according to the report, which covered the leading green power markets, namely Australia, China, France, Germany, the UK and the USA.

Wind and solar facilities to be launched worldwide by 2020 are estimated at 900 GW.

Insurance premium levels on the renewable energy market currently amount to USD 850 million annually.

The construction of renewable energy facilities require enormous investments, which need a sound risk management, in order to reassure owners and developers, the Environmental and Commodity Markets head at Swiss Re Corporate Solutions, Juerg Trueb, said.

At the same time, the growing offshore wind farms deployment is posing additional risks, as they operate in very difficult conditions that can cause delays and significantly reduce expected returns on investment, the report showed.

Hence, by mitigating the risk in the construction phase and improving the safety of revenues during operation, the insurance sector can help improve the return on investment for renewable energy projects, Trueb added.

(USD 1.0 = EUR 0.758)

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