In 2018 China, US, Europe and India invested more than £230bn in new renewable energy (excluding hydropower). Since 2016, total investment in the power sector has outstripped investment in the oil and gas sector for the first time in decades. Consequentially, this has helped drive the rapid development of renewable technologies, through standardisation in wind and solar, and economies of scale.
The three reports published in the Renewable energy: risk and reward series in collaboration with researchers from the Imperial College London Centre for Energy Policy and Technology (working independently through Imperial Consultants) delves into key trends & territories; key risks and technologies and integrating renewables into grids and the role of energy storage. Each look at the implications of the exponential growth of renewable energy technologies and key emerging risks for insurers and risk managers.
Lloyd’s is already a leader in the space providing cover for cyber, technology performance and (extreme) weather risks, accelerating the adoption of renewable energy at global scale.
The research found that:
• China is a key territory for renewable energy systems. With 334 Gigawatts of installed renewable technologies, China has the largest capacity for any one country and produce a significant percentage of renewable technologies; for example, China produces 45% of global solar photovoltaic panels.
• Solar photovoltaics dominates added technological growth with an estimated 575 Gigawatts to become operational in the next five years and new innovations allowing greater efficiencies.
• Lithium-ion batteries look to be the storage technology that will dominate future deployment of energy storage systems, with an 85% decrease in production price over the last decade; better production methods; and an increased understanding of the risks surrounding this technology.
In the future, renewable energy systems are likely to start to meet production demands that traditional energy systems do today. Due to the changing nature of risks in the sector and the fact that insurance is often a pre-requisite for securing project finance there is a growing need for insurance to support the rapid growth in the renewables industry,
With energy capacity increasing, technologies maturing, and more data to analyse associated risks, the renewable energy market will open to further insurance business and product development.
SOURCE: Lloyd’s of London
Read the reports here.