All posts in Energy

Energy Companies and Portfolio Managers Risk Exposure to Winter Volumetric and Price Risks

This past summer’s record-high temperatures in Southern Europe have demonstrated that without appropriate weather hedges in place, large energy consumers, energy companies and portfolio managers can be exposed to a dangerous level of weather risks.  As winter approaches, unusually mild or extremely cold temperatures are a further threat. Now is the time for these businesses to buy a hedge to protect themselves from temperature uncertainties or risk aggregated losses as the effects of climate change continue to bring unseasonal weather and unexpected and extreme weather events.  Continue Reading

With Growth of Renewables, Increased Demand for Weather Insurance

For the fifth consecutive year, investment in new renewable power capacity was roughly double the investment in fossil fuel generating capacity, reaching USD 249.8 billion in 2016. The world now adds more renewable power capacity annually than it adds in net new capacity from all fossil fuels combined. However, wind and solar energy producers and distributors face unique challenges in both volumetric and price risks. The remarkable progress being made in renewables requires innovative risk mitigation solutions in order to ensure that the pace of investments in wind and solar continues. Continue Reading

Small and young businesses disproportionately bear the costs of climate change

baby

Report provides eye-opening new insights into the demographics of commercial victims of climate change. Young firms, which comprise not only the lifeblood of many communities but are central to national economies, do not insure against what they consider to be less frequent, extreme events, and are therefore, disproportionately bearing the costs of the vagaries of weather resulting from climate change.

With the frequency and severity of extreme weather events and unseasonal weather increasing as a result of climate change, Weather & Economics has reported on the far-reaching effects to a wide range of sectors, including agriculture (particularly for farmers of citrus fruits, avocadoes, cocoa, viticulture, and cereals) as well as for the sectors of finance, sporting events, travel, transport, automobile parts, fashion and apparel, construction, food and beverages, and snow removal, to name but a few.

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Transformation of global power markets led by renewables

wind turbine sunflowers

In 2015, renewables surpassed coal to become the largest cumulative share of global power capacity, and this impressive growth will continue over the next five years. Despite lower fossil fuel prices, renewable power expanded at its fastest-ever rate in 2015. Enhanced policy support in key markets, technology improvements and sharp cost reductions all contributed to renewables now accounting for more than half of the world’s additional electricity capacity. Yet, wind and solar energy producers and distributors face unique challenges in both volumetric and price risks. The remarkable progress being made in renewables requires innovative risk mitigation solutions in order to ensure that the pace of investments continues.

The International Energy Agency (IEA) announced this week that renewables have now surpassed coal as the largest source of installed power capacity in the world. Renewable energy now represents more than half the new power capacity around the world, reaching a record 153 gigawatts (GW), 15% more than the previous year. Record additions in both onshore wind and solar photovoltaics (PV), include approximately a half million solar panels being installed every day around the world last year, and in China, two wind turbines installed every hour in 2015. Contributing to the growth of renewables has been the sharp decline in costs. Average global generation costs for new onshore wind farms fell by an estimated 30 percent in the last five years, and costs for large solar panel plants fell by two-thirds.

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