White Paper Summary
The renewable energy sector looks poised to continue its years-long growth trajectory. Falling technology costs, availability of tax credits, rising consumer demand and an urgent need to mitigate greenhouse gas emissions to combat the effects of climate change have all driven interest and investment dollars to wind, solar and battery storage projects.
This growth has continued despite uncertainties introduced by the COVID-19 pandemic. A market outlook report by Deloitte states that as energy demands dropped in the spring amid state shutdowns, the share of energy produced from wind and solar plants actually increased by 2%.
“Renewable energy sources beat coal in the generation mix for 116 days” as of June, compared to just 39 days over the same period last year, according to the report. This demonstrates grid resiliency and reliability — two primary concerns with the scalability of renewable energy projects.
“There are 117 gigawatts of new capacity that will be brought online from wind and solar sources between 2021 and 2023. Additionally, we’re seeing a proliferation of battery storage projects — around 470 megawatts of new battery storage produced in Q3 2020 — to alleviate the risk of unreliable or inconsistent power supply,” said Ian Kirejczyk, Property Underwriter – Energy and Construction at AIG.
Despite these trends, and an ongoing desire from individuals and big corporations alike for cleaner, more sustainable energy, the renewables sector is facing challenges that could stymie its growth.
Here are three key risks the industry is grappling with and how the right insurer-partner can help renewable energy companies keep moving forward.
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