Broker Marsh has launched a facility specifically for insuring hydrogen projects, in response to growing global investment in clean energy sources.
The insurance/reinsurance facility provides up to $US300 million ($436 million) of cover per risk for the construction and start-up phases of hydrogen projects, the broker says in a news release from London.
“Marsh’s facility is backed by a panel of A-rated global insurers, led by Liberty Specialty Markets and AIG,” the broker said.
“As well as providing risk transfer options for all construction and operational phase property damage risks, the facility includes marine cargo, business interruption, general third party liability, and contingent delay-in-start up insurance.”
The offering, available for new and existing green and blue hydrogen projects, is structured flexibly to enable clients from small operators to multinational organisations to choose coverage for the construction or start-up phase, or a combined risks policy that extends to first year operations.
The broker says securing “adequate insurance market provisions” for hydrogen projects has been challenging despite the growing interest in green energy.
According to Marsh, investment in green and blue hydrogen initiatives is estimated to exceed US$150 billion ($218 billion) by 2025 as traditional energy operators, governments, and hard-to-abate industries race to meet their carbon reduction obligations.
“Marsh’s facility is an important development for the insurance industry that will help enable the acceleration of the global energy transition to renewables,” Marsh Specialty Global Head Energy & Power Andrew George said.
“As the global hydrogen industry, especially green hydrogen, scales up rapidly to meet demand the facility will reduce the complexity of securing risk transfer options for operators of all sizes and boosts investor and lender confidence in achieving their ambitious project timeframes.”
He says Marsh continues to make “significant investments” in supporting the diversification of energy systems and is challenging insurance markets to keep pace with industry and improve risk management approaches and choices.
“We are committed to working with investors through all phases of their projects, to support their energy transition goals,” Mr George said.
Hydrogen is seen as a potential source of clean energy, replacing coal and other fossil fuels but there are risks in the form of fire and explosion hazards if production, storage and transportation methods are not established properly.
Liberty Specialty Markets Global Head of Energy Lesley Harding says the facility is another example of how the insurer is providing industry-leading technical expertise to assess, quantify and underwrite emerging technology risks.
“Our ambition is to be the strategic insurance partner for clients engaged in the energy transition,” Ms Harding said.
AIG UK Head of Energy and Construction James Langdon says the facility “is one of many initiatives that we are working on with our clients and broker partners in support of the energy transition and our net zero commitments”.
Extracted in full from: Marsh launches hydrogen projects facility – Daily – Insurance News – insuranceNEWS.com.au