As renewable energy grows in strategic importance for power companies, and as investment in renewable energy assets expands, risk considerations are clearly moving higher up the agenda among investors in and operators of renewable energy projects.
Partnerships between the insurance and energy industries can improve risk management expertise and develop new insurance products which will enable the kind of risk-taking essential to growth and innovation in the renewable energy sector.
So, even though global investment in new renewable energy capacity exceeded investment in new fossil fuel-powered plants in 2011, reaching a record USD 257 billion (compared to USD 30 billion in 2004), there is increased awareness for the risks: A drop in renewable energy investments in 2012 could be understood as a first warning.
This topic is covered in a very interesting article by Jürg Trüb, Head of Environmental and Commodity Markets at Swiss Re Corporate Solutions, in "Insurance Day": https://www.insuranceday.com/generic_listing/emerging_markets/risk-management-how-insurance-can-sustain-the-renewable-energy-sector.htm (you need to register to read it)
I would be interested to know more about specific political risks which affect the renewable energy sector, especially what the trends are in terms of sustainability of governments' support to this industry?
Category: Sustainable energy