Insurer Munich Re has launched what it claims is the world’s first long-term insurance plan for battery performance, signing up ‘all-iron’ flow battery maker ESS Inc as its first customer.
One of the insurer’s management board, Peter Röder, described the ability to insure battery performance as a missing “key piece of the puzzle in decarbonising our energy sector”.
“For the first time, battery manufacturers can insure against the risk of their products not delivering as promised,” Röder said.
Aimed at major projects such as stationary storage systems deployed for grid stability or peak demand reduction applications, manufacturers will be able to give customers performance guarantees by backing their warranties for 10 years.
Munich Re claimed manufacturers can “unburden their balance sheets” because insurance will cover the cost of repair or replacement of defective battery modules that exceeds the agreed cover amount. The insurer said this should also make it easier to obtain project financing for stationary storage projects, by capping the maximum costs of warranties. Cover can be extended to individual projects, meaning customers are covered even in the event of manufacturer insolvencies.
Energy-Storage.news reached out for expert opinion and commentary on the launch and Munich Re’s claims – from both an independent advisory firm and an energy storage market research company – but did not receive replies in time for the publication of this story.
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