Beyond the fence line: Why risk needs to be part of your renewable project narrative

In Australia’s push toward a decarbonised grid, renewable project developers and investors are navigating increasingly complex risks, often beyond what conventional project planning and PPA negotiations can manage.

Drawing from my recent presentation at the Clean Energy Council’s Investor Forum, this article outlines how proactive risk framing and insurance partnership strategies can help project developers and investors to better manage uncertainty and make their assets more bankable and tradable.

The New Risk Landscape for Renewables

Emerging variables such as technology volatility, extreme weather, and global supply chain lag are reshaping the traditional trinity of risk (political, regulatory, and construction). While none of this is new to developers, what is changing is how insurers interpret these risks and how that interpretation affects everything from premium pricing, insurable terms and conditions, and asset valuation.

Common risk blind spots we see across solar, wind and BESS projects include:

• Thermal runaway spacing in BESS: Poor spacing and enclosure layout can significantly alter insurer appetite and premium outcomes.
• Solar panel fragility: Thinner modules with high hail exposure and limited stow protocols are leading to more claims, and reduced market confidence.
• Wind turbine scale: Aggregated large-capacity turbines carry complex business interruption implications, especially with long component lead times.
• Critical spares planning: Lack of spare parts increases business interruption indemnity periods, cost blowouts, and inflates deductibles.
• NatCat design assumptions: Insurers are more rigorously interrogating 1-in-100 and 1-in-200 year assumptions, especially in bushfire zones.

Risk Isn’t Just an Insurance Problem, it’s a Project Narrative Issue

Insurers are no longer just pricing risk; they are making value judgements about your engineering, planning and operations. A poorly communicated project, or one with gaps in documentation, can face longer insurance placement timelines, narrower capacity, and sometimes full insurer withdrawal.

This isn’t just about insurance costs. It affects:

• Due diligence confidence for equity and debt stakeholders.
• M&A outcomes where asset resilience is under review.
• Grid operator trust when operational continuity is in doubt.

Insurers aren’t risk-averse; they are information-hungry. ‘Data is king’ in the insurance industry, and the best way to meet this is with a proactive strategy that treats risk as a story, not a disclosure.

Mitigate Early, Communicate Often

A few suggestions for developers and investors looking to get ahead:

• Meet insurers before financial close, not just during it. Early engagement lets them influence risk design before it’s fixed.
• Show your work. For example: What’s your bushfire mitigation plan? What’s your thermal event scenario? What drove your design and OEM selection? A slick data room means nothing if your risk assumptions are fuzzy.
• Influence your indemnity periods. Can you demonstrate spares on site? This matters to your deductible structure and ultimately your valuation.
• Model against real-world return periods, not legacy standards. 1-in-50 flood models don’t hold up anymore.
• Treat your insurance as part of your capital stack. An optimised insurance program is a strategic asset, not just a compliance box.

Selling the Risk Before You Sell the Asset

Ultimately, we need to stop viewing insurance as a procurement process and start framing it as a credibility tool. If you want to sell your project to a super fund, a state government, or a global IPP (as examples) they need to trust that risk is embedded in your thinking, not an afterthought. Because in a world of tight margins and volatile conditions, it’s not just about doing the work, it’s about proving it.

 

---

About our Guest Author

---