Renewable Energy

Failure-free operation over the long term is vital to enable investors and plant operators to achieve their target earnings. A large number of exposures during both the construction and operation phases can jeopardise these  earnings and HDI’s tailored insurance solutions provide for these risks to be covered.

In particular for PV solar parks, HDI offers a unique insurance solution, Solar Revenue Shortfall Insurance, which provides coverage to protect revenue streams against specific risks such as lack of solar radiation, defective components, exceptional degradation, etc.


Scope of services at a glance

Renewable Energy Projects

Insurance cover can be tailored to the specific insurance requirements of a renewable energy project. A wide range of optional features is available to complement the basic cover provided.

HDI provides comprehensive insurance solutions for the project starting from the commencement of construction and also continuing after the project becomes operational. Coverage can be tailored to meet specific demands of the project as well as the requirements of financing parties (particularly for project finance deals).

Construction phase

  • Erection All Risks Insurance (including  Third Party Liability Insurance)
  • Advance Loss of Profit Insurance
  • Extension for natural hazards, such as earthquake, etc.
  • Professional Indemnity Insurance


Operational phase

  • Machinery Breakdown Insurance
  • Machinery Breakdown Loss of Profit Insurance
  • Extension for natural hazards, such as earthquake, etc.
  • Comprehensive General Liability Insurance

Insurance for all phases of the project can include coverage for natural disasters such as earthquake, volcanic eruption, tsunami, flooding, and typhoon. Loss of profit resulting from such accidents can also be covered.

Considering the recent rapid growth of the PV solar market, HDI recognized the insurance industry in Japan was not providing comprehensive insurance solutions to cover unforeseeable output shortages. Obtaining comprehensive coverage is particularly important for investors of PV solar projects to secure a constant revenue stream, since many projects are financed by third party institutions, financing costs are often expensive and projects may not be bankable, especially when the revenue stream is not secured.

HDI’s unique Solar Revenue Shortfall Insurance is designed specifically for PV solar projects and provides protection against risks to the project’s revenue stream such as lack of solar radiation, defective components, and exceptional degradation. These exposures are NOT covered by traditional Loss of Profit insurance in Japan.


Highlights

Comprehensive cover for plant owners / investors

Renewable energy projects can be comprehensively insured against all physical damage related to construction and operational risks from the start of any project. In addition, “Solar Revenue Shortfall Insurance” can also be insured for PV solar projects if required.

High level of capacity

HDI has substantial capacity readily available to provide insurance for major projects, also for property damage and business interruption by earthquake.

Professional technical support / claims handling

Engineers with many years of professional experience in industry work for HDI as underwriters and provide support to clients on the full range of technical issues. HDI also has a team of engineers and specialists at its disposal that ensures rapid, professional claims handling and settlement in the event of damage.


Risk Consulting

Industry insiders with many years of experience and professional know-how

Given the high risk potential, taking action to minimise risks at an early stage is vital. Policyholders are provided with comprehensive advice and support in relation to risk-engineering issues. Risk engineers from HDI Risk Consulting have a wide range of experience in the construction and operation of renewable energy projects. HDI’s experts have an educational background that includes technical training and/or an engineering degree. Their technical know-how is regularly updated by safety and other relevant training courses. This extensive knowledge is shared proactively with the policyholders.


Experts’ tip

Earthquake risks

Earthquake (including volcanic eruption and tsunami) can cause severe damage to project assets which often result in significant additional cost, substantial loss of profit as well as delay in start-up. As for construction phase insurance, earthquake risk is often excluded from insurance programs provided by the EPC contractors, and it is important to verify coverage details before entering a contract. HDI also recommends “OCIP (Owner Controlled Insurance Program)” so that the project owner can tailor insurance coverage based on risk exposures specific to the project as well as the requirements of financing parties.