USQRisk, LLC (“USQ”), the international managing general agent specializing in alternative risk transfer solutions, and Ascend Analytics, LLC (“Ascend”), an industry-leading energy software and consulting firm, announce the launch of an innovative solution to provide more efficient financing for utility-scale energy storage projects.
“This new insurance offering creates greater opportunities for the clean energy industry to gain access to more efficient financing for utility-scale energy storage projects,” said USQRisk President Michael Zipper. “Now, institutional investors have a more effective tool to demonstrate revenue certainty and reduce financing risk, thereby expanding the potential for the development of energy storage projects.”
Data and analytics for this product rely on Ascend’s deep understanding of developer needs and its end-to-end suite of analytic and pricing products, including SmartBidderTM bid optimization and PowerSIMMTM portfolio management platforms. By utilizing these platforms to provide benchmarking and projection data, USQ can structure, price, and tailor the revenue protection coverage to meet the unique needs of individual utility-scale energy storage projects.
“We’ve seen firsthand how revenue risk is slowing the energy transition. Our new revenue protection insurance offering with USQRisk gives sophisticated investors like UBS Asset Management an alternative to traditional merchant and tolled battery financings, and is an evolutionary advancement for the industry,” stated Ascend Analytics Managing Director Adam Hise.
The first-of-its-kind insurance policy, developed by USQ and Ascend, for an investment strategy managed by UBS Asset Management’s Real Estate and Private Markets business, will provide revenue coverage for an ERCOT (Energy Reliability Council of Texas) energy storage project scheduled to commence later this year.
“Unlike other revenue protection mechanisms currently utilized in the energy storage market, this coverage aligns the interests of investors, insurers and energy storage project stakeholders by providing additional certainties to investors in utility-scale energy storage projects, while preserving financial upside to the project sponsors, said Ken-Ichi Hino, Energy Storage Infrastructure Portfolio Manager, UBS Asset Management.“With this innovative insurance solution, we are able to improve revenue stability across the entire lifecycle of our energy storage assets, and guard against negative energy price fluctuations.
“By creating opportunities for owners to operate assets optimally for their risk-tolerance while insurers rely upon SmartBidder’s proven efficacy to realize Ascend’s forecast revenues, our proxy revenue offering meets the needs of clean energy owner/operators, investors and (re)insurers alike,” said USQRisk Chief Strategy Officer Chris Giuffre. “This product is an innovative tool that investors can use to mitigate their risk while maintaining the benefits of investing new energy technologies.”
This product was developed with legal support from Troutman Pepper, which represented UBS. DLA Piper represented USQRisk. The unique proxy structure, developed by USQ and Ascend, is supported by Canada Life Reinsurance and other insurers, as well as CAC Specialty which assisted with securing risk-taking capacity.