The global transition to renewable energy is accelerating, but its success will depend on the resilience of new projects — specifically, their ability to withstand natural hazards, equipment failure, and business interruption — according to new research from commercial property insurer FM.
With worldwide electricity demand projected to double by 2050, the energy sector faces immense pressure to expand and shift toward sustainable sources.
The International Energy Agency forecasts that more than 5,500 gigawatts of new renewable energy capacity will be added between 2024 and 2030, almost triple the increase seen from 2017 to 2023.
However, progress could be hampered by threats such as hail, fire, wind, and engineering flaws that cause critical equipment failures.
FM’s survey of 650 renewable energy executives and financiers reveals robust confidence and ambition within the sector.
Nearly all solar providers (97 per cent) and onshore wind operators (95 per cent) plan to expand capacity in the next three years, while 73 per cent of financiers expect to increase their investment in renewable infrastructure.
Despite this appetite, access to capital is tightening: 64 per cent of lenders and 58 per cent of investors say demand for finance now outstrips supply.
Project resilience has emerged as a decisive factor for investors and insurers alike.
Most financiers say resilience influences their willingness to invest (66 per cent), project valuations (69 per cent), and deal terms (72 per cent).
During construction, top risks cited by providers include rising equipment costs (44 per cent), regulatory delays (41 per cent), and supply chain disruptions (40 per cent).
Once operational, weather damage (54 per cent), equipment failure (50 per cent), and supply chain issues for replacement parts (48 per cent) are the leading concerns.
Yet, blind spots persist.
While 59 per cent of renewable energy providers express confidence in their projects’ resilience, many lack insight into technological and environmental risks.
Key uncertainties include a lack of transparency from equipment manufacturers (57 per cent), limited understanding of environmental factors (53 per cent), and the rapid pace of technological change (47 per cent).
These unknowns drive up construction (52 per cent) and insurance costs (47 per cent), and limit the ability to fully insure projects (44 per cent).
Financiers increasingly expect projects to employ third-party risk assessment during construction (53 per cent) and consult external engineers during operation (48 per cent).
Doug Patterson, senior vice president, Forest Products and FM Renewable Energy at FM, emphasised the need for deeper insight, stating: “Providers are doing the best they can with the information they have, but they need more insight into the technology they are buying and the environmental factors that threaten it.”
Patterson added: “If insurance is your only solution, then you don’t understand the problem.”
FM launched its Renewable Energy unit in 2024 to support clients in the transition to alternative energy through research and innovation, focusing on utility-scale solar, onshore wind, and battery energy storage systems.
The company’s approach combines research, standards development, and loss-prevention engineering, drawing on decades of experience in the power sector.
FM also offers insurance policies for renewable energy operations in the United States and EMEA.
As the renewable energy sector expands, the message from FM’s research is clear: resilience is not just a technical requirement but a financial imperative.
Early engagement with risk engineering experts and robust risk assessment is now essential for securing investment, insurance, and long-term operational success.
