Insurance Protection Gap Exposes Global Renewables to New Risks

Recent reports highlight significant challenges in the renewable energy sector, particularly around insurance and political uncertainty. A report from TMGX underscores a growing "protection gap" in insurance for clean energy projects due to complex, interconnected risks including geopolitical shifts, climate volatility, and emerging technologies like hydrogen and carbon capture. Larger solar projects and new energy models amplify potential financial exposures, requiring insurers to adopt long-term strategies and invest in better data and analytics. Concurrently, an EU report reveals that political instability, administrative bottlenecks, and populist opposition hinder the implementation of the Renewable Energy Directive (RED III), affecting coordinated spatial planning for renewables across member states. Despite these challenges, RED III has driven progress in several countries by fostering a stable framework for renewable energy deployment and public engagement, though political uncertainty remains a significant obstacle. Additionally, New York is accelerating renewable project approvals to capitalize on expiring federal tax credits, reflecting urgency in advancing clean energy initiatives amid these systemic issues.