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Due Diligence Advisory

Providing scalable and efficient due diligence advisory services and cost of risk optimization analysis to help clean energy investors, owners, and operators improve asset valuations and achieve competitive outcomes.
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Expertise

Our team of renewable energy specialists has extensive knowledge about the risks inherent in energy transition investment decisions, project development, project finance, construction, operation, repowering, and decommissioning.

Quantification

We help you identify various risks and solutions for an individual project or an entire enterprise. We can assist with quantifying your loss potential and the financial impact of certain insurance structures, including impacts on asset valuations, enabling you to make data-driven decisions.

Tailored approach

We understand that each opportunity has a unique set of risks and solutions. We work with you to help you identify your risks and opportunities and tailor our services to your exact needs every time. 

The renewable energy industry continues to evolve at a fast pace, presenting a unique set of challenges to renewable energy project owners and developers. This industry is influenced by tax, technology, and natural perils in a way that is fundamentally different from other asset classes, including traditional power generation.

As companies face a difficult macroeconomic environment, business leaders are seeking innovation and strategic partnerships to fuel their plans for growth. But growth strategies can bring new challenges and materially alter the risk profile of organizations like yours.

Specialists from Marsh’s Due Diligence Advisory team can help you evaluate and quantify these risk profile changes, enabling scalable and efficient risk financing strategies that optimize risk-adjusted value.

Identifying risks, recognizing opportunities

As the difficult insurance market persists, many renewable energy companies are seeking creative solutions to mitigate rising insurance costs. Some consider simply increasing their retentions or tolerating less coverage; and others look for more innovative ways to transfer their risks.

At the same time, the industry is investing heavily in new projects while there is increased merger and acquisition activity in the sector. However, these businesses’ sustainable growth often depends on being able to secure higher insurance capacity. Adequate and commercially priced coverage remains integral to the industry as it seeks to generate clean energy that is more affordable to a greater number of people.

As your risk management capabilities mature and risk profile changes, you need to gain a better understanding of the potential impact of your strategic growth decisions. Companies like yours also need a clear risk management plan to help you derive the most value from these investments.

Our team of specialists will work with your team to understand your risk profile and help you employ appropriate risk mitigation measures. We also will help identify risk transfer options and quantify risk financing solutions, enabling you to make data-driven and risk-adjusted investment decisions.

Tailored solutions

Marsh’s Due Diligence Advisory team offers a suite of scalable advisory, risk management, and insurance solutions to help renewable energy companies efficiently manage risk.

Our due diligence advisory services include:

Transaction diligence

Our specialists will work with your team to understand the risks involved in different transactions (acquisitions or divestitures) and quantify potential costs and savings, including expected risk transfer availability and pricing. We can help you through the process of buying or selling a project, business unit, or an entire company; exploring a financing or investment opportunity; or considering joint venture partnerships.

Program review diligence

We can provide you with an objective perspective on a proposed, historical, or in-force insurance program, including strategic risk finance recommendations.

Project development diligence

Our team will perform due diligence to help you make informed risk finance decisions throughout the development of your renewable energy projects. We will provide pre-placement advice, conduct due diligence on site selection, and help with risk identification and improvement as well as financial modeling.

FAQs

Our team provides diligence solutions for standalone renewable energy projects, a portfolio of renewable energy projects, or for an entire renewable energy company.

Renewable energy companies in the US can currently benefit from our due diligence advisory services. We expect to be able to expand our offering to all energy and power companies globally in 2024.

Yes, while our team of specialists has the experience and knowledge to provide in-depth due diligence services, this is not always what a business needs. We provide three types of due diligence:

1. Core: A basic evaluation based on project location, basic design specifications, and financial analysis. Core diligence includes:

  • Natural catastrophe screening
  • Risk bearing capacity analysis
  • Budgetary guidance with optional annual placement structure
  • Peer-group benchmarking coverage limits and deductible structure

Minimum of 2 weeks to complete*

2. Supplementary: A more extensive investigation that includes insurance placement advice. In addition to our core diligence, we will assess exposure and/or loss details, contracts, and coverage details. Aside from our core diligence offerings, we can include:

  • Exposure, contract, and/or coverage review
  • Assessment of climate change risk
  • Desktop engineering review
  • Claims analysis
  • ESG analysis

Typically between 3 to 6 weeks to complete*

3. Advanced/deep dive: An in-depth investigation driven by our advisory and risk-engineering capabilities, and is more suitable for major portfolios, companies, or transactions. Our specialists can conduct:

  • Deep-dive risk engineering analysis, including probable maximum loss (PML) and maximum foreseeable loss (MFL) assessment
  • Deep-dive claims analyses
  • Other advisory or analytics, such as risk finance optimization, actuarial analyses, captive feasibility, and risk management program reviews

Generally between 3 to 8+ weeks to complete*

*Each engagement may include multiple projects in a year and timing will be subject to information availability and quality.

Renewable energy companies face unique challenges, including:

  • Newer technologies that present new risks
  • High-value projects that require significant market capacity for natural catastrophe hazards
  • Higher risk of serial defects and natural catastrophe losses
  • Onerous insurance requirements to obtain project financing, tax equity funding, and contract certainty
  • Need for consistent coverage and stable pricing
  • Functional obsolescence or repowering opportunities

Senior leaders need to understand how their risk profile could change before committing to an investment, contract execution, financing, or a major acquisition. These decisions often have lasting consequences on insurance premium, coverage availability, and future claims recovery. Further, material changes to risk may necessitate different risk finance strategies and reevaluation of one’s risk tolerance. We can help you understand the implications in advance of an investment.

Our due diligence advisory services are applicable to many projects and investments. Some examples include:

  • When risk management was not involved prior to executing project contracts
  • When the site for a new PV solar project is in a high-hazard hail zone
  • When an organization opts out of buying cold weather resiliency packages
  • When a buyer needs to scrutinize and challenge a seller’s insurance budget
  • When a buyer fails to review historical losses of an acquisition target
  • When a company designs a battery energy storage system (BESS) project without first considering fire protection design

Why Marsh

Marsh’s US Energy & Power team of over 100 specialists has extensive experience in all aspects of regulated and non-regulated power generation and electric and gas utility operations, including enhanced oil recovery using CO2. Our team members across tax, environmental, surety, engineering, and project risk have a thorough knowledge of decommissioning trusts, as well as deep experience working with state regulators, navigating interstate pipeline construction and operation, and advising on loss control measures. Marsh has advised on many carbon capture and storage projects and is able to leverage industry-specific knowledge to help you confidently invest in your future.

Our people

Bill Kost

Bill Kost

Senior Vice President, Power & Renewables Industry Advisory Leader

Erin O’Shaughnessy

Erin O’Shaughnessy

Renewable Energy Specialist

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Everett Hansen

Assistant Vice President, US Power & Renewables, Marsh Specialty

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