Australia’s Energy Storage Evolution: Insurance lessons
The transition to renewable energy in Australia is accelerating but there’s a new headline act: Battery Energy Storage Systems (BESS). As the grid adapts to a high-renewables future, BESS projects are emerging as critical enablers of system security, firming, and price stability.
At Solarif Insurance and our Australian partners, we’ve supported several large-scale storage projects in recent months with their Battery Energy Storage Insurance, and these experiences reveal a few universal truths about risk and insurability in this evolving space.
Why BESS is now mission-critical?
Australia is on track to deploy over 9 GW of battery storage by 2030. Without storage, curtailment remains a costly challenge for developers, and volatility for energy users persists.
BESS allows renewable energy to deliver on its promise of reliability, but it also changes the risk profile dramatically compared to standalone solar assets.
The risk and insurance reality
In our recent engagements, we’ve seen some key challenges stand out:
Thermal Runaway & Fire Risk
Lithium-ion remains the dominant chemistry—and while it’s efficient, insurers are laser-focused on the risk of cascading failures. Projects are expected to have robust suppression systems and monitoring technologies.
Delay in Start-Up (DSU) & Business Interruption
Increasingly, these are non-negotiables for bankability, alongside traditional construction and operational coverage.
Contractual Risk Transfer
Complex interfaces between EPC, O&M, and grid operators require crystal-clear allocation of responsibility for insurance. Lenders now scrutinize whether coverage aligns with finance agreements and project contracts.
Cyber and Environmental Liability
Battery assets are digitally controlled and often in remote locations—making them a target for cyber threats and potential environmental exposures. We see lenders pushing for at least optional consideration of these covers.
Market observations
Insurer Appetite Is Growing – Cautiously
Capacity is there, but insurers demand technical depth and strong OEM credentials before quoting.
Pricing Is Stabilizing but Still Specialized
Scrutiny to deductibles, DSU limits, and non-standard exclusions.
Early Engagement Pays Off
Proactive sharing of detailed risk engineering reports and fire safety analysis speeds up underwriting and reduces conditional clauses.
The bottom line
Storage is no longer optional. It’s the cornerstone of Australia’s clean energy system but with higher complexity comes greater accountability in risk management. Those who design bankable insurance programs early will accelerate financial close and avoid last-minute surprises.
💡 At Solarif, we help developers, lenders, and EPC’s navigate this evolving landscape, delivering insurance solutions aligned with international best practice and lender requirements.
Sources
- AEMO Integrated System Plan 2024
- ARENA Market Reports on Battery Energy Storage
- Global Insurance Market Outlook (Munich Re, Swiss Re, WTW)
👉 Let’s talk about how we can future-proof your next storage or hybrid project.
📧 Email: support@solarif.com
☎️ Phone: +31 26 711 5050
