Insurance concepts for renewable energies for a low-carbon future

Normal view (turn off text only mode)
You are here:

Insurance concepts for a low-carbon future

Munich Re is actively supporting the role of renewable energies in the transition to a low-carbon energy supply. We offer innovative insurance solutions geared to the potentials of new technologies and their operators, thus promoting the development and propagation of renewable energy sources.

Wind, solar and geothermal energy are in unlimited supply worldwide. Energy supply from resources such as these saves resources, reduces the impact on the environment, and actively contributes to sustainable management and climate protection. As well as opportunities, the technologies required in these fields also harbour entrepreneurial and new kinds of risks, such as fluctuations in wind resource or solar irradiation, or the inadequate productivity of hot water in the case of geothermal drilling. These risks have a direct influence on investment returns. The transfer of these risks to the insurance market improves the plannability of cash flows, thereby supporting business models and investment in technologies for a low-carbon future.

"With our innovative insurance solutions for renewable energies and new technologies, we facilitate the realisation of a great many projects and allow attractive investments to be made for a sustainable future."

Michael Schrempp, Head of Green Tech Solutions, Munich Re

Munich Re's expertise and our cover concepts adapted for these technologies offer capital and revenue protection for technology companies, operators and investors. With our many years' experience from major global projects, we partner consortia through every stage of development and implementation, ensuring the success of ambitious projects, while at the same time making our own contribution to sustainable development.

Performance warranty covers for large companies in the fields "Solar", "Fuel cells" and "LED light technology"

Munich Re has developed new coverage solutions that extend the performance warranty for photovoltaic modules to up to 25 years. This performance warranty cover for operators is supplemented by a further insurance solution that pays compensation directly for guarantee trigger events in the event that a manufacturer should become insolvent, thereby making it much easier to obtain funding for major solar energy projects and giving all the stakeholders greater planning reliability. Since the beginning of 2010, we have insured over 55 solar module manufacturers and projects for performance cover up to 25 years, including a Chinese manufacturer last year in collaboration with our partner company, Ping An. Munich Re also offers similar performance guarantee covers for the manufacturers and operators of solar thermal power plants. In the same way as the risk transfer for PV or wind farms, this technology calls for intensive inspection of the development and manufacturing processes by experts from Munich Re.

Last year, for the first time, we concluded a performance warranty cover for fuel cells. By taking out the insurance, we managed to significantly increase the project rating and, in the process, greatly improve the overall project financing.

The performance guarantee cover for LED modules, the first of its type in the field of energy consumption, is boosting an up-and-coming lighting technology sector. In this sector, manufacturers are offering guarantees for the quality of the light source in terms of lumen and colour consistency for up to five years. The freed-up capital from concluding the insurance can be used for other investments in technology development and market growth.

Comprehensive insurance cover for offshore wind farms

There are ambitious expansion targets for offshore wind energy, particularly in Europe, but also in other regions. The investment costs for offshore wind farms are often in the upper three-figure million or even billion US$ range. The requirements in terms of materials, logistics and construction are extremely high for offshore wind power plants. Additional substantial costs can already be incurred in the construction phase, but also from serial losses during ongoing operations, and these can impact on returns from the investment. Comprehensive risk management can help reduce such costs.

Our many years of experience makes risks more calculable along the entire length of the value added chain for all the parties worldwide involved in the project. Our expertise, for example in creating international risk management guidelines for offshore wind farms, (Offshore Code of Practice), has also been incorporated. This guideline, which is the first of its kind worldwide, covers all the construction phases for a wind farm.

Productivity risk insurance for geothermal projects

Geothermal heat can now also be exploited thanks to modern technology: the extracted water at temperatures of well over 100°C can be used in commercial applications such as for district heating systems and electricity generation. However, investors must take into account the fact that, despite painstaking preparatory work, the quantities of hot water found in deep wells may be insufficient to make a geothermal power plant economically viable. Back in 2003, Munich Re became the world's first insurer to develop a policy covering the operator's costs for unsuccessful geothermal drilling projects as well.

Investment security for industrial projects with Project Risk Rating

Since the start of 2014, Munich Re and the German technical inspection agency, TÜV SÜD, have been offering a risk rating service for industrial projects (Project Risk Rating). The unique combination of TÜV SÜD's experience in processes and testing mechanisms and Munich Re's risk expertise in global projects and research allows complex investment projects from the areas of infrastructure and renewable energies to be expertly and efficiently assessed. Using a transparent and comprehensible rating system, TÜV SÜD and Munich Re create a reliable basis for sustainable investment decisions.

HSB energy efficiency insurance protects investments in energy efficiency projects

HSB Engineering Insurance, a British subsidiary of Munich Re, offers insurance for energy efficiency projects on the European market. HSB offers insurance cover, not only for the installed systems, but also for the forecast savings. This is because if projects are calculated incorrectly, or if the installed technologies do not work as planned, the desired savings cannot be achieved. Assuming these risks reduces the technical uncertainties for lenders and operators, thus making investments in the field of energy efficiency a more attractive prospect.

You can find detailed information on our solutions in the field of renewable energies and new technologies under the headings Corporate Insurance Partner and Green Tech Solutions.

GRI: G4-EC2; G4-DMA-Indirect Economic Impacts; G4-EC7; G4-EC8; G4-EN7; G4-EN27; G4-DMA-Product Portfolio

NatCatSERVICE analysis tool

Create your own analysis

Reports on Climate Change

Main Navigation
Service Men


This publication is available exclusively to Munich Re clients. Please contact your Client Manager.