US renewables facing growing extreme weather risks: GCube
According to a new report released by GCube, the financial impacts of natural catastrophe events are outpacing the development of mitigation strategies in the North American renewables market.
In its North American Nat Cat Update, GCube stated that market correction has not gone far enough to address the growing severity of natural catastrophe and extreme weather events.
A softening of rates could potentially jeopardise the sustainable growth of US wind and solar faced with these evolving risks.
The US renewables market has just experienced its worst summer on record for Nat Cat claims, with unmodelled Extreme Weather events proving far more prevalent and damaging than traditional natural catastrophe events.
GCube’s report noted that hail losses experienced this year in Texas are projected to reach $300 million, almost ten times the estimated losses from 2020’s Hurricane Hanna.
While total claims values are still being calculated, multiple instances of losses exceeding sub-limits of up to $50 million, due to extreme weather events like hail, tornados, and derechos, “make clear the need” for improved modeling and the more effective use of existing weather data.
“While the increasing frequency of Extreme Weather and Nat Cat events is not surprising to us, the rising severity of losses, and the industry’s continued difficulty in managing these risks, is a concerning trend,” commented Fraser McLachlan, CEO, GCube.
“The unprecedented growth potential unlocked by the Inflation Reduction Act will count for little if the North American renewables sector is unable to combat Extreme weather risks.
“Concerted effort is needed across the value chain to strengthen policies, improve data utilisation, and update modeling and testing procedures, and support sustainable growth for the sector. Our latest report issues a clear call for collaboration in the US renewables industry to develop measures to combat the fallout of Extreme Weather, and support a stable, successful energy transition.”
Source: Reinsurance News, https://www.reinsurancene.ws/us-renewables-facing-growing-extreme-weather-risks-gcube/