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Energy is changing. Fast.
Energy is changing. Fast.
Decarbonisation is finally gathering pace right across the energy, power, petrochemical, agri-nutrients and heavy industries. But what are the underlying property damage and business interruption risks inherent to the clean technologies being integrated into our industrial base? And do we have the right tools, techniques and talent to analyse these risks?
The transition period between today's energy industry and a cleaner, lower carbon one could see an increase in the overall frequency of property damage events (average severity per event will most likely decrease as renewables tend to have a lower unit size and value footprint than conventional electrical generation assets) and introduce some interesting complexity in business interruption exposures (e.g. liability for carbon credits not earned, etc). The primary reasons are that 'non-experts' (e.g. start-up companies, etc) will start to build and operate facilities without having the policies, procedures and people to do so as safely as more well-established companies. Technologies will move from the laboratory bench to the commercial phase much, much faster than historically and this will create problems such as frequent equipment breakdown, poor asset reliability and an unresponsive spare parts supply chain.
All in all, much for the insurance industry to consider as it mobilises its unique risk transfer capabilities to help facilitate the clean energy transition.
Examples of our focus areas
Hydrogen & Ammonia
Hydrogen & Ammonia
Hype, hope and hard reality
Turning excess renewable electricity into usable molecules is getting a lot of publicity, funding and traction, but is it all it is cracked up to be? And to what extent are the equipment and processes used to make green hydrogen or green ammonia genuinely prototypical versus well-established or repurposed ones?
From a techno-economic perspective, there are very use cases where green hydrogen or green ammonia can compete with electrification at a carbon intensity parity, so not only are the technical risk aspects worthy of proper analysis, but so is the long-term viability of such assets. When tax payer support is removed, do these plants stand on their own feet, or crumble and decay?
BioEnergies
BioEnergies
A growing alternative to fossils
Waste-to-value facilities are springing up everywhere, making biofuels (mostly gas, but increasingly liquid fuels) using anything from fish canning factory effluent, to soybean oil, to beef tallow. By virtue of the innate business model of bioenergy technologies, these plants need to be located near to or at the location where the waste is produced, limiting the processing capacity of these facilities.
But small-scale doesn't equate to low-risk, for the majority of the newer assets are being run by start-up companies with inexperienced personnel using only basic management systems. How can the risk at these locations be assessed - and subsequently improved - without prohibitive risk engineering costs?
Greener Grids
Greener Grids
Instability in the utility
The increased penetration of intermittent renewables (wind and solar in particular) is changing the way in which regional and national electrical grids operate throughout the 24 hours of each day. The now famous 'California Duck' demonstrates the unintended side effects of decarbonising a large electrical grid. When the sun is rising and setting there are short, steep changes to solar power output, meaning that the grid operator must bring on or shut down conventional generation resources to meet an increasing or decreasing electricity demand very quickly.
As an insurer or broker, are you cognisant of the stability and frequency response capability of the grid to which your client's assets are supplying into?
If you are seeking definitive answers to these questions, then Fíréanta is the partner for you.
info@fireanta.com
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