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Q&A

Are Fossil Fuel Projects More or Less Insurable Than Renewables?

A conversation with Jason Kaminsky, CEO of renewables insurance data firm kWh Analytics.

Jason Kaminsky.
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This week we chatted with Jason Kaminsky, CEO of renewables insurance data firm kWh Analytics. Kaminsky has been laser focused on the real risks of physical damage solar and battery projects face – and the fears host communities feel about them. We talked about how those risks compare to fossil fuels and whether innovation could cure this industry ailment.

The following is an edited version of our conversation.

Are fossil fuel projects more or less insurable than the renewable projects you cover?

On the whole, renewables are more exposed to natural catastrophe risk. You’re putting glass out onto a field that has hail or fire or what have you, and you see more exposure to natural events than you would [even] a spinning turbine that's surrounded by steel. When we were getting to insuring property, the first risk that came onto our radar screen was hail risk. The industry had shifted development into Texas for a variety of reasons and the insurance companies at that point in time were not recalibrating their models for the fact there’s actually quite significant hail in Texas. And we were seeing significant losses.

It’s not uncommon to have multiple $50 million loss events in any given year for solar projects due to hail, typically in Texas, Oklahoma. That’s the zone of hail. And we don’t see that with a gas facility particularly because, well, it’s in a building.

But it’s way more distributed than a single fossil fuel facility, so even if you have a $50 million loss, that does not have an impact on the ability of the grid to generate.

The part of the facility that is not damaged will continue to produce power and put power onto the grid. You get many more partial loss events versus a gas facility where the turbine goes and you basically have a total loss. Your ability to distribute your risk is much greater with renewables, which is a very strong pro from an insurance underwriting perspective.

Are new technologies helping with renewables’ insurability?

In the last few years, there’s been a lot of innovation. At RE+ you walk among the floor of battery providers and they all have very impressive fire management capabilities, and it’s at the forefront of how they market their technology. You also see that with solar modules some have said, we’re hail resistant. The way they’re putting sensors onto cells, the way they’re running controls on cooling devices, the way thermal management systems and battery management systems have abilities to vent for heat… they’ve made a lot of improvements.

But it’s interesting – I was at an asset management conference in March and I’d been going to that conference for 10 years, and it was the first time I’d heard at that conference about the social license to operate. They’re seeing these quasi-local thought leader groups that all seem to be using the same talking points that oppose large scale solar in their communities, and they push local regulatory rules to reduce the ability to develop solar in their backyards. It was encouraging to see a discussion around it and an acknowledgement that as an industry we need to go into these communities and spend time talking to the local communities.

Fascinating. Do you think discussions like these are enough to mean progress in dealing with project opposition?

It’s not historically been in the DNA of our industry to do that. I’d say today the opposition is much more organized than many renewable energy developers today so it’s been this interesting phenomenon. The local opposition says we don’t want this industrial solar. It’s proven to be effective at killing some of these utility scale deals.

We still have a long way to go in educating communities and getting them comfortable with the land stewardship that happens at these facilities. The solar industry manages a ton of land. It’s not my core focus but I’ve been exposed to those challenges around the community engagement piece and I think most developers are still building the muscle in how to do that effectively.

Yellow

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Q&A

How the Wind Industry Can Fight Back

A conversation with Chris Moyer of Echo Communications

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Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”

Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.

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Hotspots

A New York Town Bans Both Renewable Energy And Data Centers

And more on this week’s most important conflicts around renewable energy.

The United States.
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1. Chautauqua, New York – More rural New York towns are banning renewable energy.

  • Chautauqua, a vacation town in southern New York, has now reportedly issued a one-year moratorium on wind projects – though it’s not entirely obvious whether a wind project is in active development within its boundaries, and town officials have confessed none are being planned as of now.
  • Apparently, per local press, this temporary ban is tied to a broader effort to update the town’s overall land use plan to “manage renewable energy and other emerging high-impact uses” – and will lead to an ordinance that restricts data centers as well as solar and wind projects.
  • I anticipate this strategy where towns update land use plans to target data centers and renewables at the same time will be a lasting trend.

2. Virginia Beach, Virginia – Dominion Energy’s Coastal Virginia offshore wind project will learn its fate under the Trump administration by this fall, after a federal judge ruled that the Justice Department must come to a decision on how it’ll handle a court challenge against its permits by September.

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Spotlight

The Wind Projects Breaking the Wyoming GOP

It’s governor versus secretary of state, with the fate of the local clean energy industry hanging in the balance.

Wyoming Governor Mark Gordon.
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I’m seeing signs that the fight over a hydrogen project in Wyoming is fracturing the state’s Republican political leadership over wind energy, threatening to trigger a war over the future of the sector in a historically friendly state for development.

At issue is the Pronghorn Clean Energy hydrogen project, proposed in the small town of Glenrock in rural Converse County, which would receive power from one wind farm nearby and another in neighboring Niobrara County. If completed, Pronghorn is expected to produce “green” hydrogen that would be transported to airports for commercial use in jet fuel. It is backed by a consortium of U.S. and international companies including Acconia and Nordex.

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