NARDAC secures underwriting capacity for battery storage projects

NARDAC, an energy and infrastructure-focused broker and Managing General Agency (MGA) on Monday (March 25) said it has secured authority for underwriting battery energy storage projects (BESS).

The new capacity is provided by eight A-rated Lloyds syndicates and will enable the firm to provide US$50 million in underwriting capacity [per location] 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," NARDAC said in an official release.

"Equally, older, and typically smaller, battery projects in the U.S. and the U.K. are deprioritized, 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."

NARDAC is looking to serve transmission-connected as well as the smaller distribution-connected BESS projects. The company will provide the BESS sector with a comprehensive insurance service established on the understanding of evolving cell chemistries and types, emerging  Battery Management Systems, and increasing energy density of cabinets.

"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."

"We noticed projects increasingly being fully funded by lenders in the anticipation of reliability and comprehensive risk management and recognized that there was an emerging gap in critical risk cover that was not being met by the incumbent markets," Harries added.

With the addition of new capacity, NARDAC aims to support clients and potential partners in the successful BESS deployment.