5 Highlights from GCube’s European Risk Seminar 2024, Porto

In June, we hosted our annual European Risk Seminar at the Boeira Garden Hotel on the South bank of the River Douro in Porto. This is a special item in our calendar that gives us the opportunity to sit down with key figures in the renewables space and review the industry risks of the past year and share thoughts on how best to manage them.

This year, we chose a venue that was more out-of-town than in previous years, with a laid-back and leafy atmosphere, to make the most of this quality time together and it was a tremendous success. We can see why the award-winning American singer, SZA, also booked in at the same time as us – whether for the relaxing environment or the renewables insurance expertise, who’s to say?

Across the two days we covered a lot of ground, ranging from navigating risk in the floating wind sector and on the current state of the supply chain, to predicted booms in renewables construction work and in the appetite for BESS that introduce future risks to be guard against.

With that in mind, here are five highlights we took from the seminar below.

1. Balancing ‘optimism with experience’ ahead of construction boom

Fraser McLachlan’s welcome speech made the point that while we can celebrate the progress the industry has made of late, the fact remains that, to meet 2030 clean energy targets, many more renewables will need to be deployed in the coming years. This prompted one of the seminar’s main talking points: how to move beyond the ‘boom-and-bust’ cycles of renewables progress for sustainable industry growth.

Following Fraser’s welcome, GCube’s Paul Nicholls (Senior Claims Adjuster) and Josh Shimali (Head of Onshore) shared over ten years of construction claims data that inform GCube’s forthcoming report, “Arrested Development: Managing complex claims in the boom-and-bust world of renewables construction”. The historic trend of high periods of renewables construction giving way to periods of cautious inactivity after heavy losses illustrated the need, this time, to partner widespread ‘optimism with experience’, channelling it through longer-term mindsets and diligent plans to mitigate construction risks.

Steven Horne from CCi joined us to share his insight into Delay in Start-Up (DSU) claims, which are among the most complex to work through and settle in the sector. Steven’s message was clear: project monitoring is integral to robust risk management in the construction phase.

Image: Josh Shimali, Head of Onshore Underwriting, GCube

2. Evolving with diversified risks

While we anticipate an uptick in the number of projects under construction in future, what we see right now is that each new project is ambitiously striving for some form of evolution: greater scale, more complexity, or the incorporation of new technology.

We gave the floor to José Espinoso from Fotowatio Renewable Ventures who focused on preparing for the next generation of diverse, multi-technology projects, and to Pauline Laporte Weywada from K2 Management who honed in specifically on the O&M challenges experienced in floating wind to date.

José drew attention to the fact that even the technologies the industry may be more familiar with (like wind and solar) are not static but are evolving in ways that require a similar level of attention to that which is applied to new technologies like BESS, and green hydrogen. Meanwhile, Pauline charted floating wind’s progress since 2007 towards commercial deployment, emphasising what the segment’s future success depends upon extensive testing, from engineering to installation and to maintenance, along with an increased and reliable capacity in the supply chain.

Image: José Espinosa, Managing Director, Risk Management & Corporate Planning, Fotowatio Renewable Ventures

Image: Pauline Laporte Weywada, Head of Civil Engineering, K2 Management

3. State of the supply chain

The spotlight Pauline shone on the challenge of building up the supply chain in a nascent sector like floating wind addressed one of the energy transition’s greatest challenges: supply chain limitations. This year, GCube’s Phil Pavey condensed five years of choppy waters for European cargo in forty-five minutes.

While many factors outside of the control of the renewables industry have weakened supply chain performance (such as the pandemic, geopolitical tension, and one-off events like the Baltimore Bridge collapse) Phil pointed out various factors that could be solved by thorough cargo management.

Chief among these is utilising surveyors. The risk of damage in many cases can be totally mitigated or at least reduced by using surveyors and following OEM packing specifications.

Image: Phil Pavey, Senior Underwriter, GCube

4. BESS-er than ever

One of the fastest-growing technologies in the renewable energy space is BESS, and we are starting to see deployments of over 100MW of utility-scale assets in the market. Underwriting enthusiasm in this class is high even as the historic performance of BESS projects has not been flawless.

A panel Q&A, comprised of NARDAC’s Tom Harries, BW ESS’ Roberto Jiménez, and GCube’s Oliver Litterick, guided us through key talking points, such as what insureds were looking for from brokers and insurers, how businesses building global storage portfolios are tackling their risks, and how the data (or lack thereof) can guide future management to support market interest.

There was a shared sense that battery products are undergoing frequent changes and that a viable insurance proposition for such projects would benefit from more performance data and increased standardisation across assets. Tying in with Fraser’s opening message, this is an area that would benefit most from transparent communication and further industry collaboration to secure BESS as an attractive, long-term insurance segment.

5. Innovative Insurance

Speaking to one of the core themes of the risk seminar - gearing the industry up for its expansion into new horizons – Rob Jarvis took time out from Tokio Marine Kiln’s innovation lab to offer his thoughts on where the insurance market would go next.

Together with Roy Muñoz’ and Chris Bender’s ‘Better Call Roy’ discussion closing day one, Rob’s outlook on new opportunities for innovative insurance coverage in the renewables space was a reminder of the industry’s uniqueness and the need for flexible thinking in the insurance market to adapt to the new challenges and possibilities thrown up by new renewable energy solutions. Both Roy and Rob stressed the importance of these questions for insurers: what can we learn from freak events; how do we make ourselves available for fresh and increasing demand for coverage?

Image: Rob Jarvis, Head of Innovation, Tokio Marine Kiln

Image: Group photo

GCube’s European Risk Seminar is an exclusive, invitation-only event for insureds and brokers. For more information, please contact [email protected]