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A conversation with Jason Kaminsky, CEO of renewables insurance data firm kWh Analytics.
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.
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A conversation with Colorado's junior senator on the 2024 election, permitting reform, and what might happen with the IRA.
This week we’re talking to Senator John Hickenlooper of Colorado who joined me yesterday at Heatmap’s Election Post-Game event in Washington, D.C., for a spirited chat about the 2024 election, permitting, and support for renewable energy in a Trump 2.0 era. We also talked about beer and The Fray, but we’ll spare you those details. The following is an abridged version of our conversation.
So you’ve said in your time in the Senate there needs to be a “business plan” for climate change. What’s the business plan now that Trump is going to be president again?
I said from the moment I got to Washington that I could not understand how we got so far down the road without any kind of plan. No one has mapped it out – and at this point it has to change – but there’s no sense of a plan.
Right now we have to look at the possibility of dramatic rollbacks from a lot of legislation that got passed in 2023. The Inflation Reduction Act, the largest financial commitment to addressing climate change in the history of the world. I think the CHIPS and Science Act has a lot of stuff in it that over time is going to have dramatic benefits in terms of addressing climate. Rolling back those efforts for the simple purpose of giving another tax break to the publicly traded stocks of America doesn’t seem constructive.
One thing that’ll make that difficult is many of the people who worked so hard to elect Donald Trump are receiving those benefits and those jobs. A lot of those tax credits are being spent in red states.
Faced with that rollback, which I think is really an interruption and which slows down the momentum – you want to disrupt the business plan, you want to throw a wrench in the gears, one way to do that is to create unpredictability. That anything agreed to [isn’t] going to stay the same for more than two years.
I’ve heard the argument a lot before, the past few years, that a lot of the money being spent is going to red states. Why was that not an election winning argument in these states?
My impression is people basically felt that the elites – Democrats and Republican elites – are looking down on them. They’re being judged by a woke culture. They’re being bossed around. Well over 2/3rds of the people who start business aren’t doing it to make a lot of money. They’re doing it because they can’t stand having a boss. They’re doing it because they want to be in control of their lives, their job, their work, their hours, their mission. And we Democrats did a piss poor disappointing job of communicating that way.
There’s a whole bunch of reasons why this happened like it did. Hearing the war stories the past couple of days, the kinds of ads that were used as a way of taking down Democrats were pretty outrageous.
What’s to come with permitting reform?
I think we’re seeing an alignment of self interest around permitting reform. Most of the large environmental organizations recognize that if we’re going to successfully address climate change, we’ve got to get transmission lines – you can’t spend 20 years permitting transmission lines. We’ve got to go faster. The time, sense of urgency we have, is not really sufficient. The same thing is true about critical minerals. We’re going to need so much of them and we haven’t really identified where they’re going to come from.
The bill that’s sitting there right now, I think we can get that passed. I’m not saying we’re going to. But I’m saying we have a very good chance of Republicans and Democrats lining up and saying, alright I don’t like a lot of this, but we need it.
So you think the first place people are going to go is the Manchin-Barrasso bill?
Yeah I think in the short-term I think that’s where they’re going to give their best shot.
Both sides have certain parts of that bill they are really unhappy with, and they modified certain parts of it, so [we’ll] come back from recess and everyone’ll [be] taking a fresh look at it and say well I still don’t like this but it’s not as bad as it was before.
There’s some worry in some corners of climate advocacy spaces that they’ll have less of an ear from members of Congress in light of the election results. In listening to more progressive environmentalists who’ve been critical of the bill, is listening to them a politically smart idea? Practically smart idea?
I don’t think it’s a smart idea politically or practically because I do feel this sense of urgency that we’ve got to go now.
With the Barrasso-Manchin bill, we’re still going to have to do all this work. We’re just going to do it in six months or a year or two years down the road and it takes us further and further away from dealing with the issue. The costs are asymptotic.
What climate gains will be made this Congress aside from permitting reform?
I think this great transition’s going to continue. It might slow down a little bit.
There is genuine factual basis that this transition makes sense on so many levels. Politically, it’s not something you want to talk about. But we as a country have to move in that direction. Maybe talk a little less, do a little more? I heard that advice in the musical Hamilton – talk less, smile more. We have to do the opposite, do more and smile less.
What do you mean by the transition being something you don’t want to talk about?
As you’re describing the cost of waiting for people, they can get into the nits and gnats where they can go back to who they represent and say hey, there’s a problem. The same thing happens when we talk about it. Try to talk about the issues in the broadest, most fundamental ways, because that’s the hardest way for it to be attacked. Just having the broad statement is going to be more effective with a large group of people.
So I asked if progress will be made on climate in Congress besides permitting and you didn’t say yes…
No, I’ll say yes. The great thing about the Inflation Reduction Act is that it put a lot of things in play. Carbon capture, there’s a bunch of research projects and a couple of implementations in red states where they are making great progress in terms of how they can get carbon out of the air in an increasingly cost-effective way. I haven’t seen it make any kind of economic sense, but that doesn’t mean they aren’t going to get there. Hydrogen is a huge thing. Looking at some of the new nuclear reactors, where they’re looking at types of fusion reactors, small and large. Climate change is not going to allow us to go and pick out our favorite treats.
1. Forget about the IRA – As the dust has settled post-election, it’s becoming clearer far more than the IRA is at stake in the coming Trump 2.0 administration – namely, whether what people expect in the normal course of governing will resume at all.
2. Money and time – Biden agencies are (predictably) starting to get rules out the door to wrap up whatever they can before Trump takes office.
3. California counter-weight – California regulators just approved updates to their fuel standard that will accelerate adoption of lower-emissions cars.
4. Compensation fund – East Coast states this week announced they would select BrownGreer and the Carbon Trust to help create a compensation fund for fishermen impacted by offshore wind.
And more news on the biggest conflicts around renewable energy projects.
1. Magic Valley, Idaho – Sen. Jim Risch, one of the state’s loudest opponents of the Lava Ridge wind farm, said he believes Donald Trump will stop the project on Day 1.
2. Hardin County, Kentucky – Lightsource, a subsidiary of bp, is going to the mat against a chapter of prominent anti-renewables network Citizens for Responsible Solar over a project in the small Kentucky city of Elizabethtown.
3. Allegany County, New York – I’m keeping close tabs on a new solar-farmland fight in upstate New York between a plant nursery and a 3.7 megawatt SolAmerica solar farm.
Here’s what else I’m keeping tabs on…
In Indiana, a Cobia Solar project that would use 7,000 acres seems to face an uphill battle to local permits.
In Maryland, the county of Dorchester is enacting new restrictions on solar development after facing initial opposition from the Solar Energy Industries Association and RWE Clean Energy.
In Virginia, planners in South Boston have recommended rejecting a 10 megawatt solar and storage project proposed by Cenergy Power.
In Missouri, an Evergy solar farm proposed at a Kansas City airport is taking much longer than initially anticipated per press reports.
In New Jersey, anti-wind activists are adopting a new strategy to kill the Atlantic Shores offshore wind farm: forcing the state bureaucracy into a new cost-benefit analysis.
In Oregon, anti-offshore wind activists are celebrating Donald Trump’s win at the ballot box.