In order to scale up swiftly in the battle against climate change, the emerging sector is creating the first specialized insurance for hydrogen energy projects in the world.
The Marsh brokerage firm, a division of Marsh & McLennan, is introducing the first specialist insurance in the world for hydrogen energy projects.
In order to stop global warming, the world is aiming for net-zero emissions by the middle of the century. “Green” hydrogen, or hydrogen produced from renewable energy sources, is viewed as a key tool for achieving this goal.
A $430 million spending plan supported by American legislators earlier this month included funding for a variety of renewable energy sources, including hydrogen.
Projects involving the highly flammable gas have frequently had a harder time obtaining funding, in part due to the complexity and risks associated with production, transportation, and storage, as well as the fact that new and emerging technologies are typically viewed as carrying higher levels of risk.
The new facility, which was created with the assistance of the insurers American International Group and Liberty Specialty Markets, according to Marsh, would offer up to $300 million in coverage per risk for the worldwide building and startup stages of hydrogen projects.
According to the largest insurance broker in the world, the facility would be open to both major corporations and smaller businesses, and it would cover both new and ongoing “blue” and “green” hydrogen projects.
Green hydrogen is manufactured from renewable sources and is considered a versatile and low-emission fuel for transportation, energy generation, and as an input into many industrial processes. Blue hydrogen is made from natural gas.
According to Andrew George, Worldwide Head, Energy & Power, Marsh Specialty, “Marsh’s facility is a major breakthrough for the insurance sector that will assist facilitate the acceleration of the global energy shift to renewables.”
The facility “would decrease the difficulty of securing risk transfer alternatives for operators of all sizes and enhances investor and lender confidence in attaining their ambitious project deadlines as the global hydrogen sector, notably green hydrogen, ramps up fast to meet demand.”
According to the New York-based business Marsh, clients might select between coverage for the startup period and a combined risks policy that includes first-year operations.
According to research released in June by global energy consultant DNV, renewable and low-carbon hydrogen will make up only 5% of the world’s total energy mix by 2050, falling short of what is required to satisfy climate targets.
Hydrogen would need to reach 13% in order to comply with the Paris Agreement’s goal of keeping global warming to 1.5 degrees by 2050. (David Evans provided editing)
