The rapid growth of co-located and hybrid renewable energy projects is reshaping risk across the global energy market, creating new challenges for insurers and highlighting gaps in existing coverage approaches, according to a new report from Tokio Marine GX.
The report, titled “Co-location, Co-location, Co-location: Underwriting the future of flexible clean power,” draws on insights from Tokio Marine GX’s global renewable energy underwriting and claims teams, along with real-world project case studies. It examines how co-located and hybrid systems – combining technologies such as solar, wind, battery energy storage (BESS), and power-to-X, which converts renewable electricity into hydrogen, synthetic fuels, or heat – are changing the nature of renewable energy risk.
Among the report’s key findings, Tokio Marine GX identified technology interdependence as a significant underwriting consideration. Performance and reliability are increasingly shaped by how effectively different asset types operate together, which can affect operational output and revenue continuity.
The report also found that while core risks such as extreme weather, supply chain constraints, and equipment performance remain consistent across the renewables sector, their severity and financial impact vary depending on project design, scale, and revenue structure.
Revenue complexity was identified as another growing concern, with projects operating across multiple markets or revenue streams potentially requiring more detailed business interruption modelling to accurately capture exposure. The report also cautioned that sites in regions with high asset concentration may face elevated aggregation risk, particularly where shared grid infrastructure creates a common point of vulnerability.
Tokio Marine GX featured two large-scale case studies: Masdar’s “Round-the-Clock” project in Abu Dhabi, which combines 5.2 GW of solar capacity with a 19 GWh battery storage system, and the Kassø e-methanol facility in Denmark, described as one of the first large-scale power-to-X projects to reach commercial operation.
“The rise of co-location signals a broader transformation in how energy systems are designed, integrated, and managed,” said Fraser McLachlan, chairman of Tokio Marine GX. “As projects become larger, more interconnected, and more strategically important, the insurance market must continue evolving how it understands, models, and supports these emerging risks.”
Looking ahead, Tokio Marine GX identified three priorities for the sector: improved data sharing and transparency, ongoing product innovation to reflect more complex revenue models and emerging technologies, and earlier collaboration between developers, insurers, lenders, and risk engineers.
“The way insurers think about risk needs to evolve alongside the growth of co-location,” said Oliver Litterick, head of renewables at Tokio Marine GX. “By working closely with developers and continuing to invest in data, dialogue, and insurance product development, the wider insurance market can play a key role in enabling that next phase of growth.”
