As per the 2022 GCube Insurance market research, renewable energy developers and insurers face significant losses as a result of unpredictable, under-supported supply chain risks. The Covid-19 outbreak and spiraling energy prices were among the elements that led to this outcome.
The report’s findings highlight the inherent dangers of restricted supply chain investments, restricted supply sources, and a global shortage of qualified labor in aggravating claim frequency and severity.
“The market continues to encounter issues that are unparalleled in GCube’s 25+ years of expertise dealing with renewable energy insureds,” said Fraser McLachlan, the Chief Executive Officer (CEO) of GCube. The demand for renewable energy projects, as well as the technology, equipment, and trained labor required to deliver them, has never been greater. However, the pandemic’s impediment to the world’s transition to a cleaner energy future has revealed flaws in the worldwide supply chain that must be rectified immediately.”
The Covid 19 pandemic, according to the research, reversed a declining pattern in average business disruption claims for renewables producers, boosting downtime by 10% compared to 2019 levels and leading to a 38% BI increase since 2016.
Spiraling energy costs create the possibility for large-scale revenue setbacks at underinsured renewable energy facilities – a review of TIV (Total Insured Values) is vital for developers to protect revenues.
GCube specialists discussed the effects of worldwide supply chain disruption and growing inflation on renewable energy producers, manufacturers, and insurers in an environment of record demand for clean energy.
The paper advises cooperation, exact assessment of insured values, and focused investment in skills and distribution network flexibility to strengthen resilience for the worldwide renewable business.
“Preparation will be a make-or-break element of the renewable energy developer’s business strategy in today’s market,” McLachlan noted, “and part of that is accepting acceptable ownership of the degree of risk they bring to their projects.”
While a rational approach to fair contractor rates can provide both security and flexibility in buffering against quality failures, ensuring that TIVs are recorded as accurately as feasible is vital to enable proper cover for parts and downtime, and to maintaining revenue streams.
“We hope that by highlighting these supply chain concerns; our newest insights report will be a useful tool for us as an industry to evaluate how we can work collaboratively to better prepare for what is yet to come. As we anticipate greater concentration of disruption, GCube will continue to offer the market with unrivaled support and experience through its dedication to sharing its knowledge for the sake of its insureds and the broader renewables industry.”