We are living in a time of great energy uncertainty. This was illustrated last year when the price of...
Insurers have many interests around energy. They provide a wide range of risk transfer and financing products for construction and operation risks, for property and casualty risks, and for weather-related volume and electricity price risk coverages.
Three major challenges currently stand before the energy industry. The first is access to power. Currently around 1.2 billion people do not have around-the-clock electricity. The second is the security of the existing power supply chain. The energy infrastructure of many countries is ageing; they are facing significant maintenance and replacement investment costs. These expenditures are needed at a time when many governments have scarce financial resources. The third challenge relates to the de-carbonising of energy. The use of renewable energy is growing, requiring greater flexibility of transmission and distribution infrastructure. One result of these three challenges is that energy prices have become extremely volatile, a volatility that can be increased by extreme weather events. Less predictable prices impact the ability of the industry to invest and plan for the longer term.
The articles in this magazine put into context how these challenges affect current thinking in the industry. They seek to provide new perspectives on resilience and project finance in ways which better incorporate the effects of climate change. The articles further suggest how insurance can help better manage energy price volatility.
The Centre's 'research in focus' page on Risks Affecting the Energy Industry informs about further activities of the contributing authors.