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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.

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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

Why the Wilderness Society Backs a Data Center Moratorium

Talking with Dan Hartinger, the land conservation group’s senior policy director.

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The Q&A subject.
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This week’s Q&A is with Dan Hartinger, senior policy director for The Wilderness Society, a prominent land conservation organization in D.C. that this week called for a moratorium on data center development on public land. The public statement was relatively scant on details about the group’s stance, and a decade of reporting on policy in Washington has taught me that its positions are quite influential, especially in more traditional outdoor recreation and conservationist circles that are also often bipartisan. So I reached out and asked if someone could further explain the society’s position, and Dan obliged.

The following chat was lightly edited for clarity.

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Hotspots

Data Center Outrage Catches Up to Renewables Outrage in Michigan

Plus more of the week’s biggest development fights.

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The United States.
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1. Central Michigan – I regret to inform you of this back-and-forth between candidates running for Congress and a would-be constituent because it’s a warning sign for the renewable energy sector (and sort of broke my brain).

  • This week brought the first and likely only debate between Rep. Tom Barrett and Sunrise Movement cofounder Will Lawrence, who are locked in a tight contest over the Michigan 7th congressional district. As I’ve written, their race is a must-watch not only for control of the U.S. House but also the political fortunes of the data center sector.
  • The debate contained a remarkable exchange: Moderators played taped remarks from Paula Caltrider, identified as “a local resident” in the city of Mason to ask the candidates a question about data centers. Instead, she offered a comment. “You know, you can’t be a part of this no data center movement without renouncing the large solar farms and dangerous battery storage facilities that power these data centers.” (Quick TL;DR on Caltrider: She’s been quoted in national media coverage of the data center backlash and last year won a legal settlement after allegedly being fired for refusing a vaccine mandate.)
  • Barrett then ran with Caltrider’s baton. “I appreciate Paula linking these together, the stripping away of local control that took place in pursuit of this Green New Deal agenda in Lansing that took away control from communities” – a reference to the state’s primacy law that other Michigan Republican candidates have opposed.
  • Lawrence, whose support for a federal data center moratorium made him a national political test case, did not take the bait, nor did he criticize renewable energy. Instead, this part of the debate became a tit-for-tat about whether the sitting congressman once backed tax breaks for data centers. “He stuck his finger up into the wind, saw which way it was blowing, did a complete 180 on this issue,” Lawrence said. Then Barrett and Lawrence got into a confusing back-and-forth about whether the Inflation Reduction Act was a giveaway to data centers.
  • To the best of my knowledge, this is the first time the Data Center Trojan Horse has reared its ugly head on any kind of prominent debate stage, but it won’t be the last. For example: The Wisconsin gubernatorial debate is Oct. 21, and we’ve warned you about that one.

2. Doña Ana County, New Mexico – I suggest you pay closer attention to the federal permitting fight playing out over Oracle’s Project Jupiter.

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Spotlight

The Data Center Backlash Is Coming for Permitting Reform

The Senate’s compromise bill enters the chat at a moment when federal land and anti-pipeline advocates are already quite activated.

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The Capitol and a data center.
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The AI data center backlash is getting louder in D.C. ahead of the midterms – and it’s poised to collide head-on with the new permitting reform deal being negotiated in Congress.

This week, major environmental advocacy organizations are taking large public steps to lean in on the data center fight. The League of Conservation Voters and Natural Resources Defense Council, I’ve been told, are imminently announcing a $250,000 ad buy in the Washington, D.C. market focused entirely on decrying fossil fuel-powered data centers and Trump administration policies to speed up their construction. The Wilderness Society, a prominent land conservation organization, announced it now supports a moratorium against data centers on “public lands” focused on the roughly half billion acres under the Interior Department’s stewardship. And Earthjustice on Thursday did a detailed report claiming that 80% of the data centers under development “bringing their own power” are going to rely on gas generation.

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