Tokio Marine GX (TMGX), the specialist green transition underwriting business within the Tokio Marine Group, has warned that the insurance market will need to continue adapting to support the growing number of co-located and hybrid renewable energy projects being developed worldwide.
In a new report, Co-location, Co-location, Co-location: Underwriting the Future of Flexible Clean Power, Tokio Marine GX examines how the integration of technologies such as solar power, wind generation, battery energy storage systems (BESS) and Power-to-X solutions is changing the risk landscape for renewable energy developments.
Drawing on insights from the company’s global underwriting and claims teams, as well as a range of project case studies, the report explores the implications of increasingly interconnected energy infrastructure for insurers and developers.
According to Tokio Marine GX, while insurers have become more familiar with established co-location models such as solar-plus-storage projects, the next generation of renewable energy developments presents a more complex challenge.
Large-scale projects combining multiple technologies, industrial energy clusters and emerging Power-to-X facilities are introducing greater operational interdependencies and more diverse revenue structures, creating exposures that may not fit within traditional insurance frameworks.
Fraser McLachlan, Chairman of Tokio Marine GX, commented: “The rise of co-location signals a broader transformation in how energy systems are designed, integrated and managed. As projects become larger, more interconnected and more strategically important, the insurance market must continue evolving how it understands, models and supports these emerging risks. Clean energy is now as much about resilience and energy security as it is about decarbonisation.”
Tokio Marine GX points to several high-profile developments that illustrate the changing nature of renewable energy projects. These include Masdar’s ‘Round-the-Clock’ project in Abu Dhabi, which combines 5.2GW of solar generation with a 19GWh battery energy storage system to provide continuous renewable power, and the Kassø e-methanol facility in Denmark, one of the first commercial-scale Power-to-X projects to integrate solar generation, electrolysis and fuel production to manufacture e-methanol.
The company says these projects demonstrate how increasing scale and technological integration are placing greater emphasis on risk management, particularly in relation to asset concentration, system resilience and project design. They also highlight the importance of closer engagement between developers and insurers as new technologies introduce evolving operational and commercial risks.
The report identifies several factors that are becoming increasingly relevant to underwriting co-located renewable energy assets. Tokio Marine GX notes that the performance of integrated projects is often dependent on the effective interaction of multiple technologies, making technology interdependence a growing consideration for insurers.
The company also finds that although many of the sector’s core risks, including extreme weather events, equipment performance issues and supply chain disruption, remain unchanged, their potential impact can vary significantly depending on a project’s configuration, scale and revenue model.
Tokio Marine GX further highlights that projects operating across multiple markets or income streams may require more sophisticated business interruption modelling to assess potential exposures accurately. The report also notes that aggregation risk can be heightened in areas where large numbers of assets are concentrated and rely on shared infrastructure, creating potential common points of failure.
Oliver Litterick, Head of Renewables at Tokio Marine GX, added: “The transition to more flexible, integrated energy systems is a positive and necessary step for the sector. Co-location is playing a more important role in that evolution. What our latest report demonstrates is that, while the risks are becoming more complex, they are also manageable with the right approach to design, data and collaboration.”
Tokio Marine GX believes that continued growth in the co-located and hybrid renewables sector will depend on improved access to operational data, enabling insurers to better assess performance, reliability and failure scenarios across integrated systems.
The company also argues that insurance products will need to continue evolving to reflect more complex technologies and revenue models, particularly as sectors such as Power-to-X mature. In addition, Tokio Marine GX highlights the value of earlier collaboration between developers, insurers, lenders and risk engineers to support more effective risk allocation and project planning.
Litterick further added: “The way insurers think about risk needs to evolve alongside the growth of co-location. TMGX has been in the game for decades, so we already have a strong foundation to build on. By working closely with developers and continuing to invest in data, dialogue and insurance product development, the wider insurance market can play a key role in enabling that next phase of growth, too.”
