A five to 10 per cent hike in insurance premiums for renewable energy projects over the next two years has been forecast by the specialist underwriter GCube. The growth, it says, reflects the greater level of risk being taken on by providers. With green issues being driven up the political agenda, says the company, the market for renewable energy insurance is tracking the growth enjoyed by the wider renewable energy sector and is expanding at a rate of about 28 percent, annually.

"As a direct result of ongoing financial market instability, the liquidity difficulties experienced by the industry, and substantial losses arising from hurricane Ike in the US, renewable insurance premiums will almost certainly rise," comments Fraser McLachlan, Chief Executive Officer, GCube. "A soft market has forced renewable insurance premiums down to a level that is unsustainable in the long term, particularly since providers are being asked to take on greater levels of project risk. And while this will undoubtedly place increased pressure on renewable energy directors in the short term, it's important to recognise that this anticipated shift will enable providers to continue to develop their range of policies on offer, in the face of a rapidly maturing market."

To meet this growth, GCube has secured an increased underwriting capacity, enabling it to write business up to a value of $800 million. GCube provides specialist insuring capabilities in six renewable energy sectors - wind power, biofuels, hydroelectric power, solar power and wave/tidal energy. The specialist cover includes transit, construction and operational risks, right through to business interruption and general liability.