Solar Parks Now Big Business for Lloyd's
The British insurance market reports it is providing specialist cover to an increasing number of them, and they're the fastest-growing form of alternative energy globally.
Although solar energy currently meets a tiny fraction of the world's growing energy needs, "fears for energy security and climate change means that this is changing," Lloyd's, the British insurance market, reported Oct. 9, noting it is providing specialist cover to an increasing number of solar energy parks. These solar photovoltaic parks are the fastest-growing renewable power technology globally and could provide up to one-third of the world's energy demand from 2060, according to the International Energy Association.
Government incentives and the falling cost of solar technology explain the growth of solar, along with the fact that solar farms are faster to build and simpler to operate than wind or wave power, said Jamie Fleming, an underwriter at specialist Lloyd's renewable insurer GCube. The largest markets for solar energy are China and the United States, but the fastest-growing market is Europe.
Lloyd's broker UIB and GCube recently won the contract to provide reinsurance for Activ Solar's Perovo Solar Park in Crimea, Ukraine. It is the largest photovoltaic farm in Europe and is expected to produce enough electricity to meet the needs of 22,000 households and save 105,000 tons of carbon emissions.
The biggest risks for solar parks are the theft of copper cables, political risk (subsidies and tariffs can be reduced retroactively, as recently happened in the United Kingdom and Spain), and natural disasters such as earthquakes and floods. "The renewable sector is a growing opportunity for us as brokers and for insurers. Population growth and increasing urbanization mean that there is huge worldwide demand for power from both traditional and alternative sources," said Mark Ritson, a renewable energy specialist at Lloyd's broker UIB.