Grid Investment Push Meets Insurance, Cyber and Supply Chain Risk

Insurers are only starting to price a risk that has grown quietly alongside the storage boom. Olly Litterick, head of renewables at Tokio Marine GX, told pv magazine on 1 October that co-located solar-plus-storage projects now carry "hundreds of millions of dollars or even billions of dollars of exposure in a single location where multiple insureds share grid connection points."

Tokio Marine GX, known as TMGX, is a green transformation underwriting business launched by Japan's Tokio Marine group in 2025, built on 20 to 25 years of renewable energy underwriting at GCube, which Tokio Marine acquired in 2020. Litterick's warning lands as grid connection capacity becomes the scarce asset in the energy transition, and as governments on three continents rewrite the rules for who gets connected and when.

Seoul rewrites the queue

On the same day, South Korea's Ministry of Climate, Energy and Environment lifted restrictions on new renewable connections in the Honam region, covering Gwangju and the provinces of North and South Jeolla. Under a new flexible connection regime, projects can connect beyond a grid section's normal hosting limit and will have output curtailed when generation exceeds what the network can carry. The ministry said this raises the solar connection limit on a distribution line from 14 MW to 16 MW and at a substation from 50 MW to 60 MW, allowing 2.6 GW of additional solar in Honam alone without new grid construction.

Storage is written into the plan as a substitute for copper. By 2030, the ministry aims to connect 3 GW of additional solar in saturated areas through batteries on distribution networks and another 1.6 GW through storage at substations. It did not specify the capacity of the batteries involved.

The ministry also said it has recovered 9 GW of connection rights by checking solar projects that had reserved capacity but were not viable, and expects to recover more than 10 GW in Honam alone by 2030. From January 2027, connection rights will be allocated through competitive bidding rather than first come, first served. South Korea projects transmission-level renewable hosting capacity rising from 119 GW to 171 GW by 2030, and distribution-level capacity from 84 GW to 110 GW.

Separately, the Korea Power Exchange opened a tender on 22 September for 1,100 MW/6,600 MWh of six-hour battery storage under 15-year contracts, with winners due in November and commissioning by February 2029.

Aggregation is the new exposure

The insurance concern is a direct consequence of that design logic. TMGX underwriter James Totton has described aggregation risk at single substation connection points as co-location grows; a TMGX report released in May said the renewables insurance market must prepare for elevated aggregation risk where shared grid infrastructure creates a common point of vulnerability.

Because TMGX covers loss of revenue resulting from physical damage, a failure at a shared export point can hit several insured projects at once. "When the grid goes down due to [a] material damage incident or there's a transformer failure or something of that description, you know, the numbers can be astronomical," Litterick said.

Cyber is the other gap. TMGX's standard property cover largely excludes cyberattacks, with broader cover usually bought separately. Project-finance lenders have traditionally required property damage, natural catastrophe and machinery breakdown cover. "We are beginning to see lenders insist that their clients purchase cyber. But it's quite rare at the moment," Litterick said, adding that TMGX has not really declined or repriced battery storage risks over cyber exposure because cyber cover has not been a lender requirement and TMGX has not been providing it.

The wider market is not ignoring the problem. Marsh, the insurance broker, says in battery storage risk guidance that insurers need sufficient separation between battery modules and critical infrastructure such as site transformers and substations, and that minimizing single points of failure is key to avoiding contingent business interruption. Some insurers, including AXIS, sell contingent business interruption cover for lost income when the first substation a project does not own is damaged.

Thermal runaway remains the main driver of probable maximum loss estimates. Litterick credited the industry with rapid progress on standardization and certification borrowed from solar and wind. GCube reported in 2024 that more than half of battery storage failures occur within the first two years of operation, and Litterick said utility-scale storage has only been widespread for the last three to five years, so the claims record remains thin.

Washington moves on the supply chain

A second pressure on grid investment comes from procurement. On 26 August 2026, President Trump signed an executive order declaring a national emergency to ban or restrict acquisition and installation of high-risk foreign-produced equipment in the U.S. electric grid, according to a SemiEngineering analysis published on 1 October.

The order covers equipment, hardware, software and firmware used in generation, transmission or control facilities operating at 69 kilovolts or above, including large transformers, grid-tied inverters, circuit breakers, battery energy storage systems, SCADA software and industrial control systems. Residential solar inverters and commercial distribution below 69 kV fall outside it.

No vendor has been named. Restrictions are limited to broad equipment categories combined with country of origin, and the specifics arrive when the Department of Energy publishes implementing rules, due 24 December 2026. A "Covered Foreign Entity" is defined broadly, covering companies owned by, controlled by or subject to the jurisdiction of a foreign adversary. The analysis notes that Western vendors are not automatically clear: a U.S. or European manufacturer sourcing chips, communications modules or internal software from a covered jurisdiction may still find its finished product restricted.

The order requires reliability, safety and replacement availability to be weighed before any removal is ordered, reflecting a supply base that cannot be rebuilt quickly. The International Energy Agency puts China at roughly 80% of world manufacturing capacity for batteries and solar inverters, and market analysts have placed Chinese firms at around half of all solar inverters installed globally, according to the same analysis. Large power transformers already carry multi-year lead times.

The predecessor order from 2020 produced a single prohibition action before being suspended and rescinded in 2021.

Smaller batteries, and a Delhi precedent

Some of the capacity gap may be filled below the transmission level. MIT Technology Review reported on 1 October that startups are deploying small batteries in unexpected places, from induction stovetops to food carts, largely because they avoid grid upgrades and lengthy permitting. PopWheels, which runs a battery-swapping system for delivery e-bike riders, has about 50 cabinets across New York City and about 2,500 batteries in circulation, cofounder David Hammer said at a New York Climate Week event on 24 September. The company has started supplying food cart operators; about four of its batteries supply five kilowatt-hours, enough to roughly cover a day's operation for many carts.

Sam Calisch, cofounder and CEO of Copper, which builds induction stoves with integrated batteries, said shipping every stove in America with a battery would add up to tens of gigawatts of power. James McGinniss, cofounder and CEO of David Energy, called the shift "the biggest thing to happen in the power grid sector in the last 20 years."

The proof that grid losses can be attacked at scale comes from Delhi. IEEE Spectrum reported on 1 October that the city cut electricity losses from about 50% to 5% over 25 years, as documented in "The Epic Comeback of Delhi's Power Grid" by Mini Shaji Thomas of Jamia Millia Islamia. The World Bank found that more than half of countries tracking the metric lost at least 10% of their electricity in 2023, with losses above 20% for 24 nations. Georgia went from losses of over 16% in 2002 to about 8% in 2023; Singapore cut losses from 6.6% to 0.2% over the same period.

None of these fixes is cheap or fast. The insurance, cyber and supply chain questions now sitting alongside them suggest the cost of connecting the next terawatt will be measured in more than copper and steel.