– Firms launch whitepaper that highlights key opportunities for risk reduction in battery storage project commissioning and operations
Munich/ London, June 12th, 2024 – TWAICE, the leading provider of battery analytics software, and NARDAC, the specialist energy and infrastructure broker and MGA, have partnered to enable improved insurance coverage for battery energy storage system (BESS) asset owners, investors, and lenders.
By combining proactive real time analytics with existing, passive mitigation strategies, such as physical spacing, identifying best practice in BESS project development and operations becomes easier for insurers, enabling them to offer improved coverage terms.
The energy storage industry has struggled with securing insurance coverage, with high-profile incidents of thermal runaway leading insurers to reduce available capital. Recent research from TWAICE in partnership with the Electric Power Research Institute (EPRI) and Pacific Northwest National Laboratory (PNNL) on the causes of energy storage failures shows that the likelihood of failures has decreased by 97% since 2018. But while the frequency of thermal runaway events has fallen, the severity remains high, leaving insurers exposed to multi-million dollar claims. Until now, the focus has been solely on passive risk mitigation – largely increasing the spacing between batteries.
By continuously monitoring and analyzing battery behavior, however, battery analytics software identifies future safety issues before they spiral out of control. The software warns about risks well in advance, giving time to proactively mitigate any potential incidents. By implementing battery analytics project risks are reduced, enabling improved insurance terms from underwriters.
“In partnering with NARDAC, we are able to offer tangible financial benefits to the entire energy storage market,” said Stephan Rohr, CEO of TWAICE. “With battery analytics like TWAICE’s, the risk of a safety incident is lowered thanks to our autonomous monitoring and analytics that detect issues before they spiral into a damaging event. We are excited to work with NARDAC on extending these benefits to the broader storage market.”
“The pipeline for BESS projects globally is game-changing for further deployment of renewable energy. But if underwriters don’t see a way forward on better management of risks like thermal runaway, then insurance capacity will be reduced – lifting premiums – financing will be harder to secure, and battery development costs will remain high,” said Tom Harries, Partner, NARDAC.
“It’s also important to remember that insurance isn’t just a binary relationship between cost and outsourced risk. In the operational phase for BESS projects, prudent asset managers can use insurance as a competitive advantage. Those that run assets with minimal oversight will face insurance premiums that are a disproportionately high share of operating costs. But complimenting existing hardware and site layout strategies with advanced battery analytics will lower your project’s risk of large, thermal runaway events.”
“Ultimately, that’s why, as an industry we have to leverage new technologies and partnerships, harness insights available from artificial intelligence and use these to our advantage to improve the confidence of insurers in providing underwriting services and improve insurance terms for the buyer.”
TWAICE and NARDAC have released a whitepaper with supporting cases to underpin the value of battery analytics for insurance coverage. The report reveals how insurance policies can be optimized with a data-driven approach, demonstrating that insights into the health of battery energy storage systems present opportunities for enhanced safety and more accurate operating costs in insurance policies. More information about the insurance solution can be requested on the TWAICE website: www.twaice.com/newsroom/insurance-partnership-nardac
About NARDAC
NARDAC is a specialty wholesale, reinsurance broker, and Managing General Agency (MGA) that offers a unique combination of technical resources to successfully navigate the challenging and ever-evolving risk and insurance landscape.
Founded in 2020, the NARDAC team seeks to deliver innovative solutions at the nexus of broker consolidation, a frustratingly challenging underwriting environment, and a dynamic risk landscape. NARDAC understands that traditional approaches to insurance and risk management are increasingly ineffective and that creative, technical solutions will lead their clients towards a new risk transfer reality.
NARDAC leverages decades of experience in engineering, risk consulting, underwriting, and broking to create nuanced solutions and strategies for their clients. NARDAC seeks to establish a new benchmark for innovative service, disrupting a traditionally transactional business model.
NARDAC is a part of Amwins – a leading global specialist insurance distributor.