At the end of April, the UK Prime Minister gave his first major speech on the Green agenda at the Clean Energy Ministerial. In the media coverage surround this event, it seems that there is a massive amount of misinformation and unjustified comment. The Daily Telegraph’s comment on April 12th, for one, said that the green agenda will put us out of business!
Cameron’s speech was an endorsement of our efforts made and a realisation that we already have a decent percentage of renewables on the grid. The Prime Minister understands that insurance has a role to play in this field; on Friday he was in the Lloyd’s building to support the future of London as a market place for risk.
Great Leaps for Green Technology
Green technology has to be harnessed in a way that will provide a prosperous economy and lower energy prices for consumers (and politicians). We are currently seeing renewable technologies start to mature, for example:
- Falling prices in solar panels—in the U.S. alone, average photovoltaic system prices dropped by 20% last year
- Greater reliability of wind turbine generator technology after many years of data farming and lesson learning, and;
- The embracing of the general public that we have created an energy supply that is not buffeted by the market prices for oil, gas and coal, or by political unrest or an Arab Spring-type uprising.
Political Manoeuvrings Make Renewable Even More Attractive
The State of Israel recently found themselves vulnerable to energy pricing when Egypt rescinded on a major gas contract. Whilst it may not be so extreme in Europe it does highlight vulnerabilities over which we exercise very little control, including the renationalisation of oil firm YPF in Argentina and the political shift in France to a Socialist government in France which may seek to reduce the country’s reliance on nuclear energy in favour of renewables.
At the same time energy companies are revising their green agenda. Take Germany whose government has brought forward the decommissioning of many nuclear reactors and in doing so have similarly accelerated the decommissioning costs of these sites. Surrounding all this change have been renewed column inches for shale gas technology, which environmentally has not had a clean bill of health.
The question is can we position ourselves for a renewable-based future? We have come a long way so far: the European Wind Energy Conference last month in Copenhagen showed off many technical innovations and ideas and there was a significant presence from insurers.
I am pushing the boundaries but I guess that power is one of the most insured sectors in the world. With protection comes investment, and the move to renewables has been well underway in the insurance market for some time already.