The rapid growth of co-located and hybrid renewable energy projects is reshaping risk across the global energy market, creating new challenges for insurers and highlighting areas where existing coverage approaches must evolve, according to a new report from Tokio Marine GX (TMGX), the green transition underwriting business.
The new report, “Co-location, Co-location, Co-location: Underwriting the future of flexible clean power,” draws on insights from TMGX’s global renewable energy underwriting and claims teams alongside real-world project case studies, to explore how co-located and hybrid systems, combining technologies such as solar, wind, battery storage, and Power-to-X, an approach that converts renewable electricity into other usable forms of energy such as hydrogen, synthetic fuels, or heat, are transforming the nature of renewable energy risk.
While underwriters are comfortable with established co-located assets such as solar-plus-BESS, the report highlights a need to respond to the scale and complexity of next-generation megaprojects, industrial clusters, and Power-to-X facilities. These emerging models introduce increasingly intricate technological interdependencies and more diverse revenue streams that go beyond traditional, single-asset insurance frameworks.
“The rise of co-location signals a broader transformation in how energy systems are designed, integrated and managed,” said Fraser McLachlan, Tokio Marine GX chairman. “As projects become larger, more interconnected, and more strategically important, the insurance market must continue evolving how it understands, models, and supports these emerging risks. Clean energy is now as much about resilience and energy security as it is about decarbonization.”
The report highlights several key findings:
- Technology interdependence matters: Performance and reliability are increasingly shaped by how effectively different asset types operate together.
- Core risks remain consistent, but impact varies: Key risks such as extreme weather, supply chain constraints, and equipment performance are common across the renewables sector. However, their severity and financial impact differ depending on project design, scale, and revenue structure.
- Projects operating across multiple markets or revenue streams may require more detailed business interruption modeling to accurately capture exposure.
- Aggregation risk is location-dependent. Sites in regions with high asset concentration may face elevated aggregation risk, particularly where shared grid infrastructure creates a common point of vulnerability.
“The transition to more flexible, integrated energy systems is a positive and necessary step for the sector,” said Oliver Litterick, TMGX head of renewables. “Co-location is playing a more important role in that evolution. What our latest report demonstrates is that, while the risks are becoming more complex, they are also manageable with the right approach to design, data and collaboration.”
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