Mar 26, 2024

New syndicated offering provides battery developers and operators with USD 50 million in underwriting capacity per location, offering the BESS industry much needed extra capacity

London, 26 March 2024 – NARDAC, the specialist energy and infrastructure broker and Managing General Agency (MGA), part of the Amwins Underwriting division, has today started underwriting battery energy storage (BESS) projects. The new capacity is provided by eight A-rated Lloyds syndicates and will enable NARDAC to provide USD 50 million in underwriting capacity to battery developers and operators for projects worldwide through their insurance brokers.

As battery projects continue to proliferate globally, notably across the United States, Western Europe and Australia, the pace of project development, coupled with the risk profiles associated with emerging technologies, has reduced the insurance capacity available for operators to secure against their projects.

Equally, older, and typically smaller, battery projects in the U.S. and the U.K. are deprioritised, leaving operators with punitive terms and conditions. NARDAC is set-up to service these smaller accounts with a nuanced approach to underwriting BESS projects, providing a consistent approach that brokers and operators can rely on.

By bringing increased insurance capacity to the BESS markets, and directly linking this facility with NARDAC ‘s specialist broking knowledge and track record, NARDAC will provide the BESS sector with comprehensive insurance services rooted in the understanding of evolving cell chemistries and types, the more granular battery management systems (BMS) now available, and the increasing energy density of cabinets.

Serving transmission-connected as well as the smaller distribution-connected BESS projects, NARDAC’s new MGA capacity will be deployed at a critical time as the battery technology market begins to fragment into tiered suppliers, prices in Lithium-Ion continue to fall – enabling it to cement its dominant market share, crowding out new competing technologies – and cell capacities grow from 120Amps to 300Amps, driving increased energy density.

 With a critical understanding of these emerging market dynamics, NARDAC recognises the need for flexible deductibles, enabling project developers who are investing in the latest operational technologies, such as digital twins and prognostics, to sculpt their cover to match risk tolerances.

 “The project development pipeline for battery energy storage systems is growing at an exponential rate,” said Dr. Tom Harries, Partner, NARDAC.  “But while there is impetus to quickly deploy batteries to manage the shift to low-carbon and electrified power grids, there are some significant hurdles in opening up greater insurance capacity to support this transition.”

“With deep industry expertise in engineering, broking, underwriting, and claims, we know that BESS businesses face a multitude of challenges as technologies evolve and as revenue streams now focus on ancillary services and merchant trading, moving away from fixed, long-term payments.  We noticed projects increasingly being fully funded by lenders in the anticipation of reliability and comprehensive risk management and recognised that there was an emerging gap in critical risk cover that was not being met by the incumbent markets.”

 “The battery energy supply chain is maturing. We look forward to supporting our clients and future partners navigate the challenges to successful project deployment.”

About NARDAC Insurance Services

NARDAC is a specialty wholesale, reinsurance broker, and Managing General Agency (MGA) that offers a unique combination of technical resources to successfully navigate the challenging and ever-evolving risk and insurance landscape.

 Founded in 2020, the NARDAC team seeks to deliver innovative solutions at the nexus of broker consolidation, a frustratingly challenging underwriting environment, and a dynamic risk landscape. NARDAC understands that traditional approaches to insurance and risk management are increasingly ineffective and that creative, technical solutions will lead their clients towards a new risk transfer reality.

 NARDAC leverages decades of experience in engineering, risk consulting, underwriting, and broking to create nuanced solutions and strategies for their clients. NARDAC seeks to establish a new benchmark for innovative service, disrupting a traditionally transactional business model.

 NARDAC is a part of Amwins – a leading global specialist insurance distributor.