The Energy Storage Era Has Arrived .. But How Do You Insure Such A New Technology?
Energy storage is set to be the solution to the one critical technical barrier that threatens to hold back our transition to a low carbon future. Renewable energy is generated intermittently, in other words depending on when the wind blows and when the sun shines. This is solved by storing the energy!
Whilst we potentially have the option of hydro and tidal power, the sun and the wind still represent the two largest sources of renewable energy, and therefore need to be exploited to the maximum potential. Energy storage solves this problem in two ways; preventing the grid from being potentially overloaded on sunny and/or windy days when power requirements are low, and providing much needed power at peak times when the sun goes down, or when the weather fails us. Today, after many years of anticipation, the falling prices and much increased efficiency of batteries seems to be heralding the era of energy storage.
As a market leader in green energy insurance, Naturesave is focused on contributing to this emerging sector. The primary ethos of our business is to act as an agent of change within the insurance market, striving to create a more sustainable future through the actions of the insurance sector. As such, we are very focused on working to support new and emerging technologies that help tackle climate change.
So How Does The Insurance Work
As part of our commitment to energy storage, we have compiled the following advice aimed at developers and community energy groups: –
- If you would like to consider energy storage to enhance your renewable energy project, you will need to contact your insurance advisers at the earliest opportunity. This is relevant whether they are considering a stand alone project or co-locating with an existing renewable energy asset. Insurance is relevant throughout, including planning, feasibility, funding, construction, operation and decommissioning.
- Insurances for most battery storage projects will likely follow the path established by renewables over the past decade, as per the checklist on the last page of this leaflet.
- In seeking to insure your energy storage system, your chosen manufacturer will be expected to demonstrate the reliability of the system(s) they are seeking to install, with 8,000 hours of testing being a fairly standard benchmark. This would include make, model and number of cells. Your component suppliers (batteries, converters, transformers, control and cooling systems) should be able to provide you with some of the evidence you need.
- Additionally, insurers will expect information about planned operational and maintenance contracts, periodic testing arrangements, fire protections, warranties provided by your suppliers, local grid conditions and data on the energy source (where renewables). Industry bodies such as IEEE (ieee.org) or The Electricity Storage Network (www.electricitystorage.co.uk) may be able to assist.
- An issue for insurers and funders will be notification and insurance cover for existing renewable energy assets. The addition of a battery storage system to an existing asset is a material fact, which is notifiable under the terms of the asset insurance and failure to notify could lead to claims not being paid by insurers. Note – insurers have had a poor experience with a couple of large battery storage losses (over $50m) over the past 5 years and therefore you need to ensure you have an insurer on board with you from the outset.
At Naturesave we are working with RegenSW (www.regensw.co.uk) to help shape future legislation and progress opportunities for communities to benefit from energy storage technology. With the removal of red tape, the drop in the price of batteries and more proven systems on the market, we envisage that community-scale energy storage will become more financially viable, therefore enabling local communities to take advantage of this new technology.
If you have questions or queries about the energy storage contact Claire at Naturesave (firstname.lastname@example.org DDI: 01803 869 762).