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					</table>In an interview on the sidelines of the <a href="https://www.mercomindia.com/event/renewables-summit-2025">Mercom India Renewables Summit 2025</a>, held on July 24 and 25 in New Delhi, Jonas Dalsgaard, Chief Commercial Officer (Sustainable Energy) at <a href="https://www.howdengroup.com/in-en" target="_blank" rel="noopener">Howden Group</a>, discussed how the insurance industry is aligning its offerings with the risks faced by the renewable energy industry. He also said companies across sectors must consider climate change events as risks that should be insured against.
Please provide a brief overview of Howden&#8217;s insurance offerings and services. 
Howden is a big global insurance firm. We were 5,000 people five years ago. We are currently 22,000 and are expected to reach 40,000 people in the next five years. In the renewable energy space, we have about 100 GW of assets insured, split between onshore and offshore wind.
Many of the risks are common across sectors, but when it comes to renewable energy, what specific risks do companies need to factor in? 
I think the risk landscape has changed over the years. So has the insurance industry. It&#8217;s no longer just a matter of insuring your house against a fire or water, for instance. The insurance landscape has moved away from just tangible risk. Risks arising from climate change must also be insured against.
The nature of the risk that we cover now is very different. We must consider climate change events, such as hailstorms, flooding, and drought, as risks. Luckily, there are markets willing to work with that.
Many sectors rely on the power that renewable energy companies provide. We haven&#8217;t discussed cybercrime or geopolitical unrest in much detail. We haven&#8217;t covered that a whole lot, but that&#8217;s something that also affects industry, and that is obviously something that we try and cover as well.
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What are the specific offerings that you provide for the renewable energy sector?
I think where we differ from our partners in the market is that our offerings are cradle-to-grave. An insurance broker historically underwrote risks, but I think that the term&#8217; insurance broker&#8217; really doesn&#8217;t quite cover what we do.
When I say cradle-to-grave, I mean getting involved in a project way before it becomes one.
What specific risks does the renewable energy sector face, typically, as opposed to risks faced by other companies? 
You could say that all companies face some of the same issues. However, onshore and offshore wind turbines will obviously have different risk profiles. We now have a proven track record of many fires being caused by thermal runaway, which has raised significant concern.
Thermal runaway in electric vehicles is becoming a growing concern, especially when you see many indoor charging points we have at malls and parking lots.
Does Howden offer insurance solutions for weather-related risks? 
Definitely. Weather-related risks are mainly referred to as parametrics. It has been a market that has been in place for the past 10 years. Parametric insurance is picking up. I am not necessarily referring to the large earthquakes that we observe or the tsunamis in Japan, but rather to flooding, for instance. We have a hundred people employed in our climate risk division, who help clients predict where to invest and identify areas that may be prone to problems over the next 10-15 years.
Recent reports indicate that solar irradiation and wind speeds are decreasing in India. 
This is where parametrics come in. This is a perfect example of how the insurance market has evolved. Parametric insurance comes with a price. You really need to evaluate your risk profile, and you might want to consider consulting with a professional to help with that, because many of these things can be covered, but as with everything, there is a price. So, we need to find that proper balance.
Which technology &#8212; wind, solar, hybrid energy storage &#8212; is more prone to risks?
They all have their risks. In hybrid projects, each part is well understood by insurers. In the wind, there is the risk of occasional fires or broken bearings. In batteries, there is thermal runaway.
Securing finance for projects is also a challenge for many companies. How can Howden help companies with this?
Where Howden adds value by insuring companies.
If a developer or utility has a strong risk profile but has a strong grip over its mitigation measures, it will automatically be perceived better, and you&#8217;ll have a lot of capital flowing against someone who doesn&#8217;t.
Can you talk about Howden&#8217;s India operations? 
I have 400 colleagues in India. Howden has been in India for 21 years now. We are not a small operation in the renewable energy sector. We have about 5 GW under management, and we are the leading provider of warranties for the solar PV sector.
How do you assess the risk landscape in India? 
I think the landscape is changing. We&#8217;ve heard today&#8217;s talk about offshore wind. I&#8217;m very hopeful that it will come to India. I would say the next stop is obviously hybrids and batteries. That&#8217;s going to be a big thing in India, as it is all over the world. However, I can say that the insurance market is ready to help with that. Further down the line, I believe biomass and green hydrogen will also play a significant role.
India is a very complex regulatory and policy landscape. Do you have any policy prescriptions for India in the renewable energy space? 
I don&#8217;t have them at hand, but I would say we are communicating at senior levels in the government. We are making progress and doing everything we can to help make this journey as smooth as possible. We can&#8217;t do miracles, but we can do our best based on our experience with similar situations around the world. It&#8217;s not for brokers to come in and try to dictate, but we can influence based on what we think or what we know works, and hopefully that will yield good results.
(Note: Sections of the interview have been paraphrased for better reading. Check out the video for a full chat)

Insurance Market Primed to Cover Hybrid and Battery Storage Project Risks: Interview

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					</table>Wind-solar hybrid projects are a practical solution to tackle the intermittency issues of standalone wind and solar energy sources and are poised to play a critical role as a generation source going forward.
When combined, the two renewable energy sources maximize electricity generation, strengthen grid reliability, and optimize land utilization.
According to <a href="https://www.mercomindia.com/research" target="_blank" rel="noopener">Mercom India Research</a>, India has an installed hybrid renewable energy capacity of 3.6 GW and a pipeline of about 31 GW, including battery storage projects.
On October 10, 2023, Mercom India hosted a webinar, &#8220;Risks and Solutions for Insuring Hybrid Renewable Energy Projects,&#8221; that focused on obstacles in providing insurance for these projects and effective risk mitigation approaches. You can watch the full webinar <a href="https://www.mercomindia.com/webinars/risks-and-solutions-for-insuring-hybrid-renewable-energy-projects" target="_blank" rel="noopener">here</a>.
The panelists were Vipul Shetty, Director of Energy Transition at <a href="https://www.howden.com/en-gb" target="_blank" rel="noopener">Howden</a>, Amit Sharma, Vice President – Business Development at <a href="https://www.cleanmax.com/" target="_blank" rel="noopener">CleanMax</a>, and Sachin Mansuriya, Lead – Wind Solar Hybrid Projects at <a href="https://www.fourthpartner.co/" target="_blank" rel="noopener">Fourth Partner Energy</a>.
Priya Sanjay, Managing Director, Mercom India, moderated the session.
Project-Specific Risks 
Insurance for wind-solar hybrid projects is to be tailored per the project&#8217;s characteristics, considering location, size, and the unique risks involved. This requires carefully assessing and managing these risks through appropriate insurance coverage so stakeholders can secure their investments and contribute to the growth of clean and sustainable energy production.
Speaking on the growing need for insurance products to meet the demands of wind-solar hybrid projects, Amit Sharma said, &#8220;In the last four to five years, the renewables sector has evolved, and the growth has been tremendous in the commercial and industrial (C&amp;I) segment. With the growing demand for wind-solar hybrid projects, the need for insurance has increased. The risks include natural disasters, equipment failure, market fluctuations, and changing regulatory landscape. These factors have accentuated the need for insurance to make the projects economically viable for investors.&#8221;
Commenting on the risks involved in the smooth operation of wind-solar hybrid projects, Vipul Shetty said, &#8220;Defects come in many forms, and they need to be insured. Developers can have defective wind turbines and solar panels, thermal runaway, and wind turbine damage due to natural causes. These risks are also applicable to storage. Then, there are also regulatory hurdles that hinder the smooth operation of wind-solar hybrid projects. So, it&#8217;s a mix of everything.&#8221;
&#8220;When we combine wind and solar with battery energy storage systems, we are doubling the risk. When we involve more OEMs, checking the track record takes a long time and becomes a complex process. But from an overall perspective, there&#8217;s not much difference from standalone wind and solar projects,&#8221; Shetty added.
Impact on PPA Prices
Sharing his views on the impact of insurance on the power purchase agreement prices (PPA) prices, Sharma said that the impact is lower or similar to standalone wind or solar projects.
&#8220;It is a material impact and is in the range of 0.2-0.3%, which comes to ₹0.2 (~$0.002)/kWh to ₹0.3 (~$0.004)/kWh. It affects the PPA prices, but insurance is necessary,&#8221; Mansuriya said.
Insurance Criteria
Speaking about the criteria for providing insurance, Vipul Shetty said that the most important thing is the OEMs&#8217; track record.
&#8220;The first thing we look into is the level of competency the OEMs have and the type of technology they are using. Also, we look into the scale of projects, which has increased considerably in the past few years. Another issue is the location of the projects to ascertain the likelihood of natural disasters, the frequency of which has increased in the recent past due to changing weather patterns,&#8221; he said.
Shetty dwelt on the issue of the constantly evolving technology landscape. &#8220;We have become more competent to deal with the changing technological landscape. We have renewable engineers to analyze the risk and give the green light to new technologies entering the renewable sector. It&#8217;s not much of a concern for us. It boils down to what level of infrastructure information is given to the insurers, and it is also important that correct information is provided to us.&#8221;
Expecting the insurance companies to keep pace with technological developments, Sharma said insurance companies need to keep pace with technological advancements in the hybrid segment.
&#8220;Climate change is a big issue now, and they should consider this while providing cover for hybrid projects. Also, virtual PPAs are likely to emerge in the near future, and the insurance companies should gear up with new insurance products to cater to this,&#8221; he said.
Tailored Solutions
Speaking about expectations from insurance providers, Sharma said there was a need for tailor-made solutions for various contingencies.
&#8220;The insurance providers should also consider supply-chain issues, which became prominent during the COVID-19 outbreak. Also, cyber-security is another area that they should look into. These are some of the areas where things can improve. Logistics is another area for which the insurance providers need to provide solutions,&#8221; Sharma said.
Bringing the insurer&#8217;s perspective to the table, Shetty said that the insurance companies are trying their best to provide warranties and new technology guarantees.
&#8220;We are also streamlining the whole process by providing guidelines to clients. The supply chain issue is definitely a concern for developers, but it isn&#8217;t easy to address it right now. It is a grey area. But on the brighter side, nearly 60-70% of renewable energy projects are now insured. More and more insurance companies are moving toward renewables as we move on the path of energy transition,&#8221; Shetty said.

Insurance Coverage Gains Prominence as Wind-Solar Hybrid Projects Take Centerstage

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