Tokio Marine Kiln (TMK) has partnered with Insurtech Altelium to deliver the worlds first data-driven battery energy storage system (BESS) warranty programme to help accelerate growth in the battery energy storage market.
BESS technology plays a key role in ensuring homes and businesses can be powered by green energy. It is also expected that the technology will play a major role in filling the gap between green energy supplies and meeting electricity demands.
Initially supported by the government innovation agency, Innovate UK, Altelium’s warranty is built on an understanding of battery properties, behaviours and data analytics. Through its advanced online platform, every aspect of the warranty from data capture, performance and risk assessment, pricing of the premium, issuance, claims, to reporting and invoicing, is carried out through a single portal.
Through its partnership with TMK, Altelium’s product brings together in-depth expertise with A-rated capital to give storage providers the time and confidence to focus on growth.
Some of the warranty’s benefits include that it will give customers confidence in mitigating the impact of potential manufacturer insolvency with the backing of ‘A’ rated insurance capital.
The warranty will also facilitate the use of – and trade in – second life batteries for BESS, which will be a cornerstone for the battery circular economy. Valued at USD 10.37 billion in 2020, the global energy storage market is expected to reach USD 37.06 billion by 2027.
In addition, the warranty will also enable manufactures who purchase it to free up “trapped capital” allowing greater resources to be focused on growth.
The warranty will also help improve the availability and terms of finance due to a lower risk profile providing improved bankability, as well as decreasing technology and operational risk for customers, while also improving their assets’ financial profile.
Furthermore, with the supply of raw materials becoming a major worldwide issue, the use of second life batteries will help to increase material utilisation and reduce the overall demand for materials, along with reducing carbon emissions.
A recent report conducted by International Council on Clean Transportation, estimated that reusing an EV battery extends its lifetime by 72%. Second life battery storage systems specialist – Connected Energy, also estimated that over its lifetime in operation, a second life BESS can save an additional 450 tonnes per MWh of CO2 equivalent compared to using first life batteries.
Battery storage in stationary applications is also projected to grow to 235 GW by 2030.
Tom Hoad, Head of Innovation at TMK, said: “We are all aware of the urgent need to improve energy security and slash carbon emissions, partnering with start-ups like Altelium helps us support this. Providing insured warranties for BESS will unlock the deployment of large-scale capital investment.
“One of the most significant ways the insurance industry can support the transition to a sustainable, low carbon future is to create a range of insurance products that encourage the deployment of renewable energy into our everyday lives. This insured warranty product supports that transition.”
Co-founder of Altelium, Ed Grimston, added: “Altelium’s core aim is to help accelerate the transition to renewables by providing a real-time data driven insurance solutions 1st life and 2nd life BESS and EVs. We are delighted to introduce this product to the market. Market and client reaction has been tremendous. We look forward to working with our clients and broker partners to deliver these solutions across the market.”