El Niño Threatens Renewable Energy Projects As Extreme Weather Losses Rise Globally, Tokio Marine GX Warns

The global renewable energy industry is facing increasing exposure to natural catastrophes and extreme weather events, with a strengthening El Niño expected to intensify weather-related risks, according to a new report published by Tokio Marine GX (TMGX), a member of the Tokio Marine HCC group based in Houston, Texas. The report highlights the growing financial impact of extreme weather on renewable energy projects and calls on developers, asset owners, insurers and risk managers to strengthen disaster recovery strategies.

Titled Expecting the Worst: Building Resilient Recovery Strategies for Green Initiatives Facing Major Weather Losses, the report draws on 19 years of proprietary insurance claims data and insights from industry experts. It examines how changing weather patterns are affecting renewable energy assets and explains why the industry needs to move beyond disaster prevention towards better preparation and faster recovery following major weather events.

According to TMGX, more than $300 million in renewable energy market losses were recorded globally during the early months of 2026, even before the traditional extreme weather season began. The report identifies El Niño as an additional factor that could increase the intensity of extreme weather events and create further challenges for renewable energy infrastructure.

The report also highlights a significant shift in the sources of weather-related losses. While onshore wind projects were previously the primary contributors to global losses, utility-scale solar projects now account for approximately 80–90% of annual extreme weather losses. Losses from solar projects reached a peak of $228 million in 2024, reflecting the increasing vulnerability of large-scale solar installations to severe weather conditions.

North America remains the region with the highest cumulative renewable energy insurance losses. TMGX’s claims data show that the region recorded more than $1.115 billion in cumulative claims between 2008 and 2026. Hail has emerged as the most expensive natural catastrophe risk in the region, accounting for approximately $275 million in total losses. The average hail-related claim stands at around $9.1 million across the dataset.

Other regions are also experiencing significant weather-related damage. Historical losses across the Middle East and North Africa reached approximately $205 million between 2008 and 2026. Europe recorded around $260 million in renewable energy sector losses, with solar projects in Italy, France and Germany facing substantial damage from large hailstorms and flash flooding.

Fraser McLachlan, Chairman of TMGX, said the industry should recognise that major losses are likely to occur and learn from previous incidents to improve its response. He emphasised that the objective of expecting the worst is not to anticipate failure but to establish effective structures that enable the industry to recover more efficiently.

The report identifies three major areas for improving the industry’s preparedness. These include greater transparency in weather-related risk data and analysis, innovation in insurance products, and stronger coordination among developers, insurers, contractors and other stakeholders. It highlights that improved weather monitoring and hail-stowing practices have already helped reduce claims frequency in West Texas.

The report also points out that traditional business interruption insurance policies, which generally cover 12 to 18 months of downtime, may not be sufficient for major infrastructure failures. A transformer replacement can take up to three years, creating financial exposure beyond conventional insurance coverage.

Furthermore, the absence of pre-agreed service contracts and recovery arrangements can delay project restoration. According to the report, missing Master Service Agreements can add six to eight weeks of contract negotiations before engineering, procurement and construction work begins.

Oliver Litterick, Head of Renewables at TMGX, said insurers, developers and contractors must work together to establish recovery plans, share information and ensure insurance products reflect current market conditions.

The report concludes that improving renewable energy resilience requires preparation before disasters occur. Establishing spare parts inventories, pre-negotiated service contracts, standardised claims procedures and coordinated recovery plans can help reduce downtime, manage financial losses and maintain the long-term insurability of renewable energy projects.