’World’s first long-term battery insurance’ service launches from Munich Re

Share on linkedin
Share on twitter
Share on reddit
Share on facebook
Share on email
ESS Inc is the first customer to take up the Munich Re offering. Image: ESS Inc.

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.

‘All iron’ flow battery goes first

The first customer announced by Munich Re is ESS Inc, US-based maker of a novel ‘all-iron electrolyte’ redox flow battery claimed to be suitable to rigorous charge and discharge cycles, as well as providing long durations of energy storage, typically eight to 10 hours. The company has deployed commercial installations for chemical company BASF, which is also a “strategic investor” in ESS Inc. ESS Inc claims its systems have a potential 20,000+ cycle life, approximately more than 20 years of operation.

Flow batteries have been touted as an emerging competitor to lithium-ion batteries in the stationary storage space, due to their ability to store energy for more than four hours without facing battery cell degradation.

However, due to their status as a newer, relatively untried technology – despite originally being developed several decades ago though NASA – plus the fact that competing flow battery makers use different electrolyte chemistries, materials and system design, for the most part they remain at the earlier stages of reaching bankability in the way that lithium has in recent times.

Last month, Energy-Storage.news reported on one specific project where in order to reduce the cost of investment for its customer, flow battery maker Avalon chose to rent out the electrolytes to the customer, Sandbar Solar. The financial arrangement was separate to the one covering the cost of the system itself and its operational and maintenance costs.

Read Next

October 20, 2021
Fluence could raise more than US$700 million from the planned initial public offering (IPO) of its Class A common stock which would be listed on the Nasdaq Global Market. 
October 15, 2021
AutoGrid has raised US$83.5 million in funding to scale up its virtual power plant (VPP) platform for distributed energy resources (DER) and Leap has raised US$33.5 million to scale and develop its DER software solution.
October 12, 2021
The opportunities for energy storage in the US continue to grow and grow, but moving away from contracted revenue structures to merchant risk projects will be a challenge, especially for lenders. 
October 11, 2021
Vanadium flow batteries are considered a leading light of the push towards technologies that can meet the need for long-duration energy storage. Not least of all by the companies that mine the metal from the ground. Andy Colthorpe learns how two primary vanadium producers increasingly view flow batteries as an exciting opportunity in the energy transition space.
October 6, 2021
Eos Energy Enterprises, the NASDAQ-listed US manufacturer of zinc-based battery storage technology, has secured an equipment financing deal that will aid its efforts to increase manufacturing capacity.

Most Popular

Email Newsletter