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Solution

Battery energy storage systems (BESS)

Supporting more than 650 gigawatts of renewable energy projects worldwide, our team of global specialists understands the challenges you face and offers tailored risk management solutions at every stage of your project.

Comprehensive solutions

Access to global insurance markets, bespoke policy wording, and risk allocation strategies that suit your project partners and stakeholders.

Sophisticated risk modelling

Insightful data and proven proprietary modelling tools give you control, and help optimise your total cost of risk.

Deep expertise

Our advisers, engineers, brokers, claims advocates, and finance and commercial specialists will help you manage complexity and stay in control of your project.

A critical challenge of the energy transition is addressing the intermittency of renewable energy generation. As we reduce our reliance on thermal baseload generation, how do we power our homes and businesses when the wind stops blowing or the sun isn’t shining? Renewable energy can be efficiently stored in utility-scale battery energy storage systems (BESS) allowing power to be released to the grid when required.

The increased storage capacity and rapidly declining costs of battery units are driving a global rise in demand.

However, with limited loss data and costly claims in a number of regions, insurance markets are factoring  known and unknown BESS risks into their capacity, pricing, and policy terms. The primary risk considerations include:

  • 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. Large-scale battery fires have occurred in almost every region, notably Asia, Europe and the US.
  • Collateral damage, ensuing loss. The design and configuration of BESS modules is key to containing the risk of thermal runaway fires. When assessing the insurability of an installation, insurers will need to be satisfied that there is sufficient separation within the storage modules and between critical infrastructure such as site transformers and substations. Insurers will be focused on ensuring that if an incident occurs, that the loss and damages can be minimised.
  • Business interruption. Minimising single points of failure is key to avoiding contingent business interruption and impact on revenue. Insurers will typically favour projects that route power to the grid separately from the BESS. This safeguards operations and revenue, and prevents damage to one component in the event of a loss affecting another component.
  • Insurance market capacity. Insurance markets generally consider energy storage to be prototypical technology. Insurance capacity for BESS projects may be limited due to limited historical loss data and varying installation, operation, and engineering standards around the world. 

See our full guide on risk management solutions for BESS projects.

Marsh provides you with a tailored approach and comprehensive solutions

We understand that every project is unique. Our team will support you through each project milestone to optimise your risk management strategy.

Design

Position your project for success

  • Engineering support
  • Technology analysis
  • Loss modelling
  • Stakeholder management
  • Insurance budgeting

Construction

Get it built

  • Supply chain analysis
  • Health & safety strategy
  • Operational insurances
  • Hand-over to operations

Operation

Protect your assets and your business

  • Risk management framework
  • Captive strategy
  • Loss limit reviews
  • Specialist claims services
  • Decommissioning planning

Decommissioning

Close it out responsibly

  • Risk and liability review
  • Ongoing insurance

Our people

Our global renewable energy team includes insurance advisers, risk engineers, brokers, claims advocates, project finance specialists, and former industry risk managers. Contact one of our BESS leaders for support.

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Jane Smith

Head of Energy and Power, Pacific

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Gemma Claase

Head of Renewable Energy, Energy & Power Practice

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or re-insurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. LCPA 23/205

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”