GCube Insurance has established a new consortium backed by six Lloyd’s syndicates, offering up to $100 million in insurance capacity for individual battery energy storage system projects globally.
This initiative aims to enhance support for the growing energy storage market as these systems increasingly become a critical component of the worldwide energy infrastructure.
With utility-scale energy storage projects now achieving capacities of over 100 MW and operational durations of up to four hours, the financial stakes and associated risks have escalated. In response, the consortium will provide substantial lead capacity and specialised knowledge necessary for scaling these energy solutions.
The introduction of this consortium is a strategic move by GCube, prompted by the growing demand from brokers and the broader BESS sector, which has seen rapid technological advancements yet faces challenges due to a lack of long-term operational data. This gap has historically made risk management more complex and hindered confidence among underwriters.
GCube’s “Batteries not Excluded” report highlights that over 50% of BESS failures occur within the first two years of operation, underscoring the early-stage vulnerabilities of these projects. The new consortium represents a significant commitment to advancing the energy storage industry, acknowledging the need for experienced risk management and robust underwriting.
Fraser McLachlan, Founder & CEO of GCube Insurance, stated, “We have been studying developments in BESS and patiently increasing our capacity over the last 12 years. Our BESS consortium now formalises our significant commitment to the sector. BESS has reached a point of maturity where more and more capacity is required, but the complexity of mitigating losses with evolving technology also requires this capacity to be well-versed in handling claims and selecting risks. This is the basis for GCube expanding its presence in the sector.”
He further noted, “These projects are now growing in size and value, and we are pleased to be in a position to provide additional coverage, as well as to guide the development of sustainable terms and conditions based on our extensive experience in the market.
“This experience has been testing, having handled some of the largest losses the market has seen, but it has been necessary for galvanising a transparent approach that offers insureds the best support available for their projects. BESS is already proving itself to be an integral part of the global transition to renewable energy – and it is our job to ensure that it is an asset the industry can confidently rely on to meet its objectives.”