Money matters are biggest renewable energy risk

Financial risk is seen as the biggest hazard for renewable energy projects by business chiefs, according to new research by the Economist Intelligence Unit (EIU) and Gherkin-based insurance firm Swiss […]

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By Vicky Ellis

Financial risk is seen as the biggest hazard for renewable energy projects by business chiefs, according to new research by the Economist Intelligence Unit (EIU) and Gherkin-based insurance firm Swiss Re.

The EIU report, ‘Managing the risk in renewable energy’ looked at the types of risk facing operators and financiers. It found that three quarters (76%) of business heads rated financial matters, such as finding money to fund projects, as medium or high risk – more worrying than issues such as operational risks or changes to legislation.

Aviva Freudmann at the EIU, who directed the research, said: “Firms consider financial risks the most significant.” But she added that while 70% of businesses were able to identify risks, only half were able to transfer risks to third parties such as insurers.

The report, based on a survey of 284 energy and finance executives and further interviews, also suggests that renewable energy will double in importance for companies’ business strategies in the next three years.