Insurance brokerage Marsh said it launched an insurance and reinsurance facility for new and existing green and blue hydrogen energy projects.
The facility was developed by Marsh along with insurers Liberty Specialty Markets, part of Liberty Mutual Insurance Group, and AIG. The facility is intended to provide up to $300 million of cover per risk for the construction and start-up phases of hydrogen projects globally.
The company said that operators have found it “particularly challenging” to secure adequate insurance market provision for these new and emerging technologies.
The facility is intended to enable clients to choose coverage for the construction or startup phase, or a so0-called combined risks policy that extends to first-year operations. It provides risk transfer options for construction and operational phase property damage risks, and extends to marine cargo, business interruption, general third party liability, and contingent delay-in-start up insurance.
According to the International Energy Agency, 80% of hydrogen is produced using emission-intensive natural gas reforming or coal gasification. The global capacity of electrolyzers, the key technology for green hydrogen production, stood at just 300 MW in 2020.
While clean energy deployment, primarily in the forms of wind and solar farms, has soared over the past decade, electrolyzer production is still in a “very premature stage of development,” according to Bryan Pivovar, a senior research fellow for the National Renewable Energy Laboratory (NREL) and an expert on hydrogen and fuel cells. He recently spoke with Renewable Energy World.
Electrolyzer technologies have been employed for many years, but not at scale. Current methods produce green hydrogen at around $5-10/kg. The Biden administration, meanwhile, wants to reduce the cost of green hydrogen by 80%, or $1/kg, by the end of the decade.
In late August, Amazon said it signed a green hydrogen supply deal with Plug Power as part of its effort to achieve net-zero carbon operations by 2050. Using Plug Power’s electrolyzers, liquefaction capabilities, and cryogenic tankers, Plug is expected to deliver green hydrogen to Amazon beginning Jan. 1, 2025. The liquified green hydrogen will be used to fuel Amazon’s transportation and building operations, the companies said.
