Photo by Dennis Schroeder / NREL
NARDAC, the specialist energy and infrastructure broker and Managing General Agent (MGA), has launched a new facility to offer additional severe convective storm cover (SCS) for renewable energy project development and operations. NARDAC will provide up to $20 million in additional standalone SCS cover for projects in the U.S. as the first of several natural catastrophe facilities planned over the course of 2025.
In the wake of increasing claims payouts, underwriters have reduced available capacity for SCS events. This has left insureds with inadequate protection and has endangered the viability of new project development in SCS-exposed areas.
While SCS is often related to hail risk for solar projects in the southern U.S., weather events covered generally also include tornadoes, lightning strikes or powerful derecho winds. Outside hail, tornadoes, lightning and extreme winds are expected to increasingly impact renewables developments in states with growing bases of solar generation — such as Louisiana, Ohio, North Carolina and Kansas.
NARDAC launched the new facility following its work to secure additional SCS coverage for a 2-GW solar portfolio concentrated in Texas after a massive hail loss exhausted its SCS limit with existing insurers. Securing more coverage for the portfolio highlighted a market need to have a facility with standalone SCS capacity. With the new facility, NARDAC is able to offer indications for coverage in 48 hours or less.
“The increasing incident rate of natural catastrophe events, and in particular severe convective storms, is leading to unsustainable losses for traditional insurance carriers. This is forcing many insurers to reduce their cover,” said Jatin Sharma, Managing Partner, NARDAC. “This poses an existential threat to the continued build-out of onshore renewables across a number of U.S. states.”
“By bringing greater natural catastrophe capacity to the renewable energy market, and directly linking this facility with NARDAC‘s specialist broking knowledge and track record, insureds will benefit from critical additional cover that protects operational projects and assets in development.”
“As climatic change continues to impact renewable energy project development and operations, we look forward to leading asset protection with creative new facilities that provide the market with the solutions needed to secure the energy transition.”
News item from NARDAC Insurance Services
