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Renewable Energy and
Energy Efficiency

Growing profitable business while tackling
climate change

Global Energy supply is turning greener. Though as the spread of green technologies grows, so do competition and cost pressure – along with increasing levels of individual risk and falling government subsidies. This creates a greater need for adequate insurance coverage to stabilize the business performance trend in a sustainable way, or to implement long-term plans. 

To satisfy global green energy demand, companies need to invest. High upfront investments promise to be satisfyingly profitable, however come with a technical uncertainty and high performance risk. With the rapidly changing development, barely no technology has been proven for their anticipated lifetime or even amortization period.

 

Long­term investment security in the form of stable performance and reliable warranties is becoming more important. Munich Re covers far more than the traditional technical risks: with our innovative loss coverage concepts, we provide protection against financially threatening scenarios. 

Photovoltaic Energy

As an industry that is accustomed to growth and expansion, photovoltaics has confronted turbulence and barriers. In this environment, investors and lenders value investment security. The sector is challenged with price erosion and optimistic return-on-investment which applies increasing pressure on all stakeholders.

Munich Re offers innovative solutions tailored specifically to the requirements of market participants und thereby supporting the entire industry.

Investors have an interest in manufacturers being better insured against risks that could threaten business. Also they are concerned, that PV manufacturers may become insolvent, rendering performance and product warranties worthless – a development that would drive up operation costs and decrease return on investment.

Our covers protect buyers of PV modules and investors in PV plants against the insolvency of the manufacturer of the modules. We also offer an insurance solution that can counteract the volatility of the weather and the consequent fluctuations in the power output of PV parks

PV module manufacturers need liquidity to keep innovating and growing. Our insurance solution supports manufacturers in backing up the module performance in the long term. As a result, the manufacturers have the liquidity they need to cope with unexpectedly high claims from performance warranties – for periods of up to 30 years.

Energy Storage

In order to achieve the efficient distribution and balance of clean energy sources and meet energy efficiency targets, electrical energy storage solutions, such as batteries in stationary and e-mobility applications, are gaining importance.

There are enormous opportunities for this constantly evolving market, but the lack of access to sufficiently cost-effective capital hinders this market from developing sustainably. 

Financiers and institutional investors such as banks and pension funds are deterred from investing. Often they are unable to assess all the various technologies available and the corresponding technology risks involved. Today, the energy storage industry is starting to offer  long-term warranties against defects and performance degradation that improve investor comfort .

On the other hand warranty provisions tie up the manufacturer’s capital and risk to be insufficient in case of a serial loss event. Clearly, this can have a negative impact on the manufacturer’s profit.

Our product and performance-oriented risk transfer solutions address the needs of both, investors in as well as manufacturers of stationary storage systems and battery packs used in e-mobility applications. Talk to us to find out more.  

On- and Offshore Wind Energy

Wind energy helps to replace fossil fuel use and also supports to address global warming. Munich Re collaborates closely with the wind power industry, investors and banks to identify gaps in lifecycle coverage that pose a financial threat to wind energy projects at all stages of the value chain.

The wind power value chain is complex, involving different project and operation phases, stakeholders and interests. Wind farms face increasing cost pressure, both in the construction phase and in ongoing operation. Once reliant on subsidies and tax incentives for business viability, wind power now is the third-biggest contributor to the European renewable energies mix. As the industry continues to expand and competition increases, tailored risk-transfer solutions can play a key role in cost efficiency and long-term profitability.

Our specialists have developed an array of insurance solutions to create optimal conditions and security for investors and operators. Wind power plants are generally covered against physical damage, accidents and natural hazards by conventional insurance products. Our solutions go further: We offer our support in end-to-end risk management, including preparedness for extreme losses.

The risk of serial losses is especially pronounced when manufacturers integrate new technologies or up-scale the turbine capacity to larger sizes. If, for example, the design of a new WTG component includes systematic defects, these could remain undiscovered until after installation or even after years of operation.
Contractors and component suppliers suffer the risk of large warranty claims due to faulty design (certified), faulty materials, defective production or bad workmanship. These guarantees are usually not covered by conventional insurance cover, possibly resulting in devastating consequences for the EPC contractor and its suppliers.

Circular Economy

Sustainability and green technologies are becoming an increasingly pressing issue for all businesses around the world.

The utilization of first of its kind technologies and innovative processes require new insurance solutions.

With our Circular Economy Performance Insurance we insure the technology risk of clients in the Circular Economy sector, like bioenergy and waste-to-energy plants.

Our customized and flexible insurance solutions stabilize revenue streams, improve bankability and access to capital by guaranteeing repayment of debt obligations.

Contact our experts
Michael Schrempp
Michael Schrempp
Head of Green Tech Solutions
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