Solution

Battery energy storage systems (BESS)

Supporting over 650 gigawatts (GW) of renewable energy projects worldwide, including over 25 GW in Asia. In the past year, our Marsh Asia renewable energy team is the only broker who has an Asia-based BESS facility in the Singapore market.

BESS plays a crucial role in the intermittency of renewable energy generation in energy transition due to the increasing effects of climate change.

We offer:

Insurance capacity

Only broker in Asia with a BESS facility of US $200 million underwriting capacity. Widened coverage through access to global insurance markets, bespoke policy wording, and risk allocation strategies.

Efficient process

Access to seamless insurance quotation^# and quick cover confirmation based on pre-negotiated insurance coverage terms.

Competitive terms

Leveraging risk assessment analysis to optimise the total cost of risk for the best terms and conditions in the market.

Risk advisory

Advisory on risk mitigation strategies to enhance project resilience to achieve better insurance outcomes.

With the BESS market in Asia Pacific expected to grow more than 15% annually by 2027,¹ there will be an increase in demand for risk mitigation resulting from:

Thermal runaway fires. Thermal runaway is a chain reaction where a damaged battery releases energy in the form of heat. Left unchecked, the heat can damage adjacent cells or cause a fire.
Collateral damage, ensuing loss. Effective design of BESS modules is vital to prevent thermal runaway fires. Insurers will evaluate insurability by ensuring proper separation within storage modules and from critical infrastructure, focusing on minimising potential losses and damages.
Business interruption. Minimising single points of failure is essential to prevent business interruptions and revenue loss. Insurers typically prefer projects that route power to the grid separately from the BESS, protecting operations and revenue by isolating damage to individual components.

However, with limited loss data and costly claims in several markets - notably in China, where a fire occurred at a large energy storage plant in 2022,² and South Korea, where a massive fire broke out at a large-scale BESS facility in 2020³ - insurers have taken into account the potential risks associated with BESS, and are exercising caution in deploying capacity, setting insurance pricing, and determining policy terms.

How Marsh Asia BESS facility helped a company in Taiwan optimise insurance cost

A BESS operator utilising Nickel Manganese Cobalt (NMC) batteries encountered high premiums and limited coverage options due to perceived risks such as thermal runaway fires and a concerning loss history. As a result, the company was operating without insurance coverage, exposing them to significant financial risk.

By leveraging its global insurance network, with Marsh Asia’s BESS facility, we successfully obtained insurance coverage for the company. This strategic approach, which included raising the client’s deductibles and emphasising its robust risk management practices, not only reduced the client's financial exposure but also ensured compliance with industry standards, enabling the facility to operate with greater confidence and security.

Our people

Marsh Asia’s renewable energy team is not only the largest in Asia, but one of the most experienced, with over 25 GW of projects placed. We are also the only insurance broker and risk advisor with a dedicated renewables risk engineer for onsite risk management support.

Our dedicated energy and power claims specialists in Asia work closely with a pre-agreed panel of reinsurers for quick payment of claims where it is valid.

Our capabilities

Find out how the Marsh Asia BESS facility can help you mitigate construction and operational risks.

^{1 https://www.mordorintelligence.com/industry-reports/asia-pacific-battery-energy-storage-system-market}

^{2 https://www.engineeringnews.co.za/article/extensively-assembled-battery-energy-storage-systems-remain-a-huge-danger-in-the-industry-2022-11-02}

^{3 https://commoplast.com/news/details/10771/}

^{# Subject to the provision of required information}