Risk managers can expect multiple challenges arising from a trilemma in the renewables industry in the year ahead. This is the view of WTW, whose Renewable Energy Market Review 2023, published today, points to the challenges emanating from the convergence of a need for net-zero energy security, unsettled global macroeconomics and rising demand for renewable energy in an era of squeezed supply.

WTW’s review features contributions from more than two dozen international subject matter experts and specialists. From floating solar in Singapore to battery storage in Ireland – opportunities and risks are explored amid a changing economic, political and social environment.

Contributing author Margaret-Ann Splawn, executive director of the Climate Markets and Investment Association, commented: “Macro events and trends such as inflation, cost increases, security and supply chains are impacting the renewable energy industry, making the current business environment a challenging one for risk managers. Several important steps will help them to assess their own vulnerabilities in the transition to net zero and protect themselves from current and future ESG and climate-related risks.”

WTW’s analysis also predicts that general insurance rate increases will be tempered by individual insurers’ appetites for specific types of clients and assets.

Steven Munday, natural resources global renewable energy leader at WTW, commented: Buyers that fall within an insurer’s higher levels of risk appetite can expect low- to mid-single-digit price increases,” Munday says. “Transient clients might achieve similar rates if insurers new to renewables fight for market share, but more circumspect risk carriers are likely to offer them middle to high single-digit increases. Finally, clients with challenging occupancies, poor claims experience, or a poor strategy may well see double-digit rate rises.”

In all cases, cover for natural catastrophe risks will be much higher, he added.

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