German reinsurance company Munich Re is now offering insurance that covers battery performance. It is primarily aimed at large projects, such as utility systems designed to ensure grid stability or cover peak demand periods. In a second phase, Munich Re plans to introduce the product into the mobility market, including for EVs.
US battery manufacturer ESS, which manufactures energy storage systems for solar farms and grid operators, is the first customer, and plans to use the insurance for its redox flow batteries.
Munich Re hopes the product will allow battery manufacturers to offer long-term performance guarantees by which the value is backed by the insurance coverage. The company also says the insurance will allow battery manufacturers to more easily obtain project financing and ramp up deployment, since the maximum costs for any warranties are capped by the insurance cover.
Policyholders can expand coverage to protect selected investment projects directly, so that the insurance will pay even if the issuing manufacturer files for insolvency within the warranty period.
Munich Re’s Peter Röder said, “The ability to insure battery performance is a key piece of the puzzle in decarbonizing our energy sector. For the first time, battery manufacturers can insure against the risk of their products not delivering as promised.”