Insurance, energy sector partnerships can improve risk management
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Improved management of the risks surrounding renewable energy sources can be developed through partnerships between the insurance and energy sectors, according to a study.
Renewable energy will play an important role in the future, and adaptation to climate change will increase in importance, according to the study by Swiss Re Ltd.
The study, published Monday, says improved risk management will help secure future energy supplies and reduce the impact of climate change. And partnerships between the insurance and energy industries will help to develop new insurance products that will enable the risk-taking needed to grow and innovate in the renewable energy sector, the report said.
While many of the risks that apply to renewable energy sources also apply to nonrenewable energy sources, renewable energy projects face some additional risks, Swiss Re said. For example, such projects use newer, less well-tested technologies, are exposed to the impact of adverse weather, often operate in difficult geographic locations such as offshore wind farms, and often rely on public subsidies.
New risk management practices and risk transfer mechanisms to deal with these risks are being developed through partnerships between insurers and the renewable energy industry, according to the study.
The study, “Building a Sustainable Energy Future,” is available here.
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