July 19, 2024: GCube Insurance, a renewable energy insurance specialist, has announced the launch of a new consortium that will underwrite the rise and growing need for insurance BESS products.

The group, comprising six Lloyd’s syndicates, aims to provide battery energy storage system developers and asset owners globally with up to $100 million in ‘A-rated’ insurance capacity.

The consortium was developed in response to the growing demand from brokers and the BESS market and will bring lead capacity and expertise to support the industry as it becomes a key component of the global energy mix.

With larger utility-scale BESS assets coming online, capacities of 100MW and durations of up to four hours are becoming standard and so project values ­— and financial risks — have increased proportionally, GCube says.

However, due to the rapid technological advancements in the sector, the company noted that there is a lack of long-term data to guide risk management strategies and build underwriters’ confidence in this emerging technology.

GCube’s report, “Batteries not Excluded,” noted that over 50% of reported BESS failures occur within the first two years of operation. Despite this, GCube said the launch of its consortium illustrates “growing recognition” among underwriters that the BESS market is taking action to manage its risks.

“We have been studying developments in BESS and patiently increasing our capacity over the last 12 years,” said Fraser McLachlan, founder & CEO of GCube Insurance.

“BESS has reached a point of maturity where more and more capacity is required, but the complexity of mitigating losses with evolving technology also requires this capacity to be well-versed in handling claims and selecting risks.”

For a fuller examination of BESS and insurance risks go to the latest issue of Batteries International where industry expert Wyn Jenkins investigates the latest developments in this sector.