In 2010 global investment in new renewable energy projects exceeded investment in new fossil fuelfired plants for the first time, largely driven by a mix of renewable energy incentives and political pressure to invest in less emission-intensive energy production. Yet although investments in renewable energy plants are growing, so are the risks. Political/regulatory risk and financial risk are on the rise against a backdrop of macro-economic uncertainty, while weather-related volume risk is rising up the agenda as investments in offshore wind farms accelerate. At the same time, the availability of risk management resources—including risk expertise, industry data and insurance cover—in the renewable energy sector remains limited, potentially restricting the sector’s access to development capital.
Managing the risk in renewable energy is an Economist Intelligence Unit report that discusses the risks inherent in renewable energy projects, the approaches that sponsors of renewable energy developments are taking to manage these risks, and the mechanisms they are using to transfer risk to third parties. The report is based on a survey of over 280 senior executives in the renewable energy industry, based in western Europe (Germany, the UK, Denmark, Spain and Italy), North America and Australia. The research was sponsored by Swiss Re. The Economist Intelligence Unit bears sole responsibility for the content of this report. The findings and views expressed in the report do not necessarily reflect the views of the sponsor. Christopher Watts was the author of the report, and Aviva Freudmann was the editor.
For the full report and additional analysis, click here.