The rapid expansion of low-carbon energy has been framed as a transition challenge. It is becoming a question of risk.
Renewables were once viewed as relatively benign, with losses largely attritional and manageable within existing models. That assumption is now being tested. Larger assets, new technologies and unfamiliar geographies are introducing exposures that look increasingly complex and, in some cases, catastrophic.
For Jack O’Sullivan (pictured), head of waste, recycling and bioenergy at Rokstone, the shift is already evident. “Carbon capture, green and blue hydrogen, BESS, all have risk profiles which are fundamentally different to what a core renewables book would have seen even five years ago,” he said.
Part of the change is scale. Wind turbines have grown significantly, with onshore units increasing from around 2MW a decade ago to 6MW and beyond, and offshore installations now reaching 15MW.
“The new iterations are often released for serial production without a proven track record,” O’Sullivan said. Limited operational history increases the risk of defects emerging at scale.
That creates a different type of exposure. A fault in one component can be replicated across multiple assets, turning isolated issues into systemic losses.
Development is moving into less established regions, bringing different natural catastrophe profiles, regulatory environments and infrastructure constraints, often without the same depth of delivery experience.
Alongside larger assets, enabling technologies are introducing new forms of risk. Battery energy storage systems and transmission infrastructure are critical to grid stability, but carry very different loss characteristics.
“Transmission modifiers and BESS units with their potential for fire load pose a more catastrophic threat than conventional renewables,” O’Sullivan said.
Unlike wind or solar, where losses are often spread across large areas, these risks are more concentrated.
“The EML for these risks is vertical and there is the potential for total loss,” he said, contrasting this with the more attritional profile of traditional assets.
Other innovations carry similar uncertainty. Floating solar and offshore wind projects, designed to improve efficiency and expand site availability, are more exposed to natural perils and harder to maintain.
As losses emerge, underwriting behaviour is shifting. Battery fires, hail damage and maintenance-related failures are beginning to reshape how risk is assessed.
“Losses drive behaviour and large losses especially,” O’Sullivan said.
One of the clearest changes is in capacity deployment. Where insurers once took large or even full shares of renewable risks, placements are increasingly structured on a subscription basis.
There is also a sharper focus on risk management. Poor maintenance, particularly in solar installations, has been linked to losses, prompting closer scrutiny of operational standards and data quality.
Natural catastrophe exposure is also being reassessed. Large hail events, once considered marginal, have led to significant losses and a reset in pricing and capacity.
Despite growing experience, pricing remains uneven. “A lot of it is based on experience and in my opinion it is less scientific and more anecdotal than in other property classes,” O’Sullivan said.
The challenge is not just the availability of data, but the pace of change. Technologies are evolving faster than loss histories can keep up.
As portfolios grow, aggregation risk is also becoming more pronounced. Serial defects remain a key concern, particularly where components are replicated across large fleets. A single design or manufacturing issue can affect multiple projects simultaneously.
Infrastructure dependencies add another layer. Where multiple projects feed into a single grid substation, a failure at that point can trigger widespread disruption.
“The breakdown of the bottleneck substation will mean output curtailment at all the sites that feed into it,” O’Sullivan said.
The cumulative effect is a shift in how the sector is understood. Renewable energy is no longer defined by low severity and predictable loss patterns.
“The assumption has been renewables don’t really have truly catastrophic losses, but they do now,” O’Sullivan said.
As projects grow in scale, complexity and exposure to natural perils, the potential for large, shock losses is increasing. Offshore wind farms in more exposed regions may face greater windstorm and typhoon risk than earlier developments.
This is no longer a class that can be priced on historical experience alone. The risks are moving ahead of the data used to understand them.
