Extreme Weather events that fall outside of traditionally modelled natural catastrophe parameters – including hailstorms, wildfires and extreme cold – are continuing to increase rapidly in frequency and severity, resulting in significant losses in the renewable energy sector.
According to a new report from renewables specialist GCube Insurance Services (GCube), some 70% of solar losses in the last ten years have occurred since 2017. Across both wind and solar, the average nat cat or extreme weather-related loss in the latter half of the decade was over 300% higher than before 2015.
While solar projects have most frequently been damaged by wildfire, compared to flooding for wind projects, both technologies have also seen substantial claims from windstorms and hailstorms, with the largest single solar loss in history resulting from a hailstorm in 2019.
Fraser McLachlan, CEO of GCube, said: “As we have just seen in Texas, unmodelled extreme weather events can have a significant impact on the grid, and this is only one of many challenges currently threatening the renewables sector.”
“Lessons need to be learned from the sector’s management of climate risks to ensure greater resilience to emerging threats like cyber-attacks and the impacts of Covid-19,” he added.
“GCube has proved that a sustainable renewable energy insurance market is possible under the right conditions, and we have been able to continue providing A-rated insurance products to ensure that our clients have the cover they need to protect their investments.”
GCube explores these themes further in its ‘Hail or High Water’ report, which analyses nat cat and extreme weather claims data from across the industry over the past decade and provides recommendations for mitigating these losses.
To request a copy of the report, please visit: http://www.gcube-insurance.com/reports/hail-or-high-water/