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Coal Power Becoming 'Uninsurable' As Firms Refuse Cover (theguardian.com) 270

AmiMoJo quotes a report from The Guardian: The number of insurers withdrawing cover for coal projects more than doubled this year and for the first time U.S. companies have taken action, leaving Lloyd's of London and Asian insurers as the "last resort" for fossil fuels, according to a new report. The report, which rates the world's 35 biggest insurers on their actions on fossil fuels, declares that coal -- the biggest single contributor to climate change -- "is on the way to becoming uninsurable" as most coal projects cannot be financed, built or operated without insurance.

Ten firms moved to restrict the insurance cover they offer to companies that build or operate coal power plants in 2019, taking the global total to 17, said the Unfriend Coal campaign, which includes 13 environmental groups such as Greenpeace, Client Earth and Urgewald, a German NGO. The report will be launched at an insurance and climate risk conference in London on Monday, as the UN climate summit gets underway in Madrid. The first insurers to exit coal policies were all European, but since March, two U.S. insurers -- Chubb and Axis Capital -- and the Australian firms QBE and Suncorp have pledged to stop or restrict insurance for coal projects. At least 35 insurers with combined assets of $8.9 trillion, equivalent to 37% of the insurance industry's global assets, have begun pulling out of coal investments. A year ago, 19 insurers holding more than $6 trillion in assets were divesting from fossil fuels.

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Coal Power Becoming 'Uninsurable' As Firms Refuse Cover

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  • by Z80a ( 971949 ) on Monday December 02, 2019 @09:16PM (#59478796)

    It's probably not very profitable.
    It's almost like insuring people actively fighting in a big war.

    • by rtb61 ( 674572 ) on Monday December 02, 2019 @09:36PM (#59478842) Homepage

      It is all far more corrupt than that. Basically they are resource flipping. They know coal is fucked, they know it and so what do they do with existing unmined coal assets, develop them as fast as possible so as to dump the underground coal asset as a productive mine on targeted institutional investors, corrupt ones. They know full well the mine well be shut down before the end of it's productive life but it is the only way to cash in on the undeveloped coal asset, no one would buy it otherwise. So the typical modern in your face big corporate con often backed by corrupt governments, that special moment for the incompetent psychopaths to cash via corruption.

      • Ignoring all the last-minute-cash-grab stuff, it's more likely they know the mine owners will happily burn the place down when their profits lapse.
        • by jythie ( 914043 )
          This. In many ways, the problem with coal isn't coal, it is the industry and norms within it. Coal has always been a sleazy industry, but over the last century it has been self selecting for increasingly garbage people running it, and I can not blame insurers and investors for not wanting to deal with them.
    • Re: (Score:2, Interesting)

      by gl4ss ( 559668 )

      It's almost like insuring people actively fighting in a big war.

      and so? you just ask for a bigger premium and promise a smaller payout - basic insurance business. just flat out refusing cover, instead of just giving more expensive cover, is 100% politics it's not business.

      and look it's not like they were insuring for the possibly coal pollution related deaths anyways. the whole thing sounds sketchy in that regard - were the companies insuring them anyways? and the european companies sure as f are still insuring people working on coal projects/plants too for the law requ

      • You have a shockingly positive view of insurance companies to think they're leaving giant piles of money on the table just to make a political statement about climate change. That's facially absurd.
        • Re: (Score:2, Interesting)

          by gl4ss ( 559668 )

          You have a shockingly positive view of insurance companies to think they're leaving giant piles of money on the table just to make a political statement about climate change. That's facially absurd.

          thats what makes this announcement absurd and probably not factual, like I said, they sure as f are insuring a lot of coal related things, like the employees and their pensions and such.

          insurance companies are networked just as much as any other big businesses are though, so the bigger players could just funnel them into some other arm of their company - but what I find more strange is that if they were indeed insuring the investment projects to make them essentially zero risk investments in the first place

          • by Aighearach ( 97333 ) on Tuesday December 03, 2019 @03:09AM (#59479444)

            You can be absolutely 100% sure that they did an actuarial analysis that showed this to be the proper business decision.

            You have to be either stupid or shockingly naive not to understand that about the insurance industry.

            And no, you can't just "broker the whole things forwards to Lloyds anyways." This isn't a cheeseburger, or a highly rated insurance product. It is higher risk than the "high risk" category. The idea that they won't eventually get sued is speculative. If they have insurance, then there is somebody who has to pay up, somebody who isn't protected by things like bankruptcy. Each client is going to need special approval. Building a power plant is a big enough capital project that you're not going to buy high-priced insurance from Lloyds and then also pay an extra premium to a local agent, who doesn't do shit and won't even be in the loop.

            • by HiThere ( 15173 )

              And the thing is, last time I checked Lloyd's wasn't a corporation. Your deal would be with a consortium of individuals who were willing to risk going broke for the intermediate gain. Not with Lloyd's, but with people working out of Lloyd's. https://www.thebalancesmb.com/... [thebalancesmb.com]

        • A more plausible explanation is that the big international financial groups expect carbon cap & trade - and similar measures to financialize the natural environment - to be immensely profitable. Therefore they have instructed their insurance subsidiaries to give it a little push.

        • by jebrick ( 164096 )

          I would mod this up if I had points. This is more about profit than political.

      • by sjames ( 1099 ) on Monday December 02, 2019 @10:55PM (#59479024) Homepage Journal

        ...flat out refusing cover, instead of just giving more expensive cover, is 100% politics it's not business.

        It's also what insurance does when the liabilities are likely huge but hard to quantify just how huge. Essentially they have determined that the risk assessment is either beyond their statistical ability or that the process has such a strong butterfly effect that it's more like gambling in an illegal casino than it is like insurance.

      • by MrKaos ( 858439 )

        find insurance for the investment that was cheap enough that it was worthwhile to take it. you can not find such for most investments - you haven't been able to find it for nuclear projects that would cover years of delays and crap like that anyways

        SEC. 638 of The U.S Atomic Energy Act [house.gov] as the primary act of law controlling funding policy decisions for Nuclear Power provides for $500M per proposed reactor in support for where construction is delayed for NRC approved designs.

        To dispel any further assumptions, liability for Nuclear accidents was initially set at $10bn in the Atomic Energy Act 1954 Sec. 170.(2)(B) and pegged to inflation by the Price Anderson act (encapsulated in the first section of "Nuclear Matters" in the US Energy Policy Act) which

      • by AmiMoJo ( 196126 )

        The insurance companies are looking at the potential liabilities if they get held responsible for all the externalized costs (pollution, damage to health, climate change) and decided that no amount of money can protect them against it.

        It's the same reason that nuclear needs governments to covers its insurance needs - the liabilities are too large for any commercial insurer to take on.

      • by Sique ( 173459 )
        No, you don't. There is for instance no point in offering an insurance plan if you can tell that the necessary premium will be higher than the revenue of the business you want to cover. You just tell the business: Sorry. Makes no sense.
  • Although at this moment, the possibility of someone winning a lawsuit for damage due to climate change is unlikely, as real problems keep mounting, that is going to change. At this time, governments could pass laws indemnifying coal companies, but that also becomes less likely; and what indemnity legislation gives, legislation can take away, especially in the face of ever stronger evidence.

    Insurers could be dropping coal projects simply because the risk is becoming too great.

    • most countries using coal are running them as state companies anyhow.

      most of the insurers weren't dealing in this kind of insurance anyways as insurers. any normal company will do the normal insurances for the coal using power companies anyways, like for worker safety and other legal requirement insurances.

      the risk hasn't changed at all and for free market insurances the risk is just directly proportional to the price of the insurance - and most of them would have been brokering the insurance deals to the l

  • Let China ramp up their coal generation [bloomberg.com], adding more new capacity than all of the EU. We should join with Canada to make small modular reactors [www.cbc.ca]. Let's electrify North America with clean, reliable, affordable nuclear power.
    • and Wind? Aside from the problems with nuclear (e.g. accidents, waste and the high cost of end of life care for reactors) the reactor construction always seems to go way, way over budget.

      These troubles with nuclear as far as I know haven't been solved, while wind and solar, while not perfect (discarding old wind turbines is harder than you think) seem safer and the installations seem to have more consistent costs.
      • Re:Why not Solar (Score:4, Informative)

        by LynnwoodRooster ( 966895 ) on Monday December 02, 2019 @11:19PM (#59479088) Journal

        Why wind? It's not reliable. Nuclear pre-pays all its decommissioning costs [nrc.gov]

        (unlike wind or solar). Including waste disposal - that the Obama Administration stopped because who knows... As far as accidents, nuclear is the safest of them all [forbes.com]. And it's incredibly reliable - a single nuclear power plant [wikipedia.org] provides a 90% uptime (3-4 times that of wind), and provides 9% of California's entire electrical energy needs, with just 12 acres of land.

        While it might "seem" safer and consistent, the actual facts show that wind is deadlier, costlier [forbes.com] (once you do a full analysis and include the mandatory costs for backup generation) and not nearly as reliable.

        Let's join with Canada and build a modern nuclear electrical grid for low cost, reliable power.

        • Re: (Score:2, Troll)

          by Uberbah ( 647458 )

          Nuclear pre-pays all its decommissioning costs

          Not even close. Citing a piece from NRC is like citing a piece from the NRA that guns aren't involved with accidental deaths. You also "forgot" the costs of storing nuclear waste for the next 100,000+ years.

          As far as accidents, nuclear is the safest of them all.

          Laughable, as the number of deaths from wind and solar generation are ZERO. No, if an iron worker slips and falls off a wind tower, that is not caused by wind power generation, any more than an iron work

          • but they're right that an industry website isn't exactly a reliable source. I seriously question whether prepaying would be enough. We already know that Nuclear plants run was over budget during construction...

            I don't know about reliability, but I find it hard to believe a plant would go down 100% for any serious length of time. But the point about deaths I think is valid. Nuclear is still better than coal by a country mile, but it's not without risks.
        • Why wind? It's not reliable.

          That's why it is combined with hydro, solar and long range high voltage power lines to place where the wind is blowing at the moment.

          Nuclear also has a LCOE that is multiple times higher than that of wind + solar, the insurance costs on Nuclear are so high nobody will touch it which necessitates government guarantees and the decommissioning costs of wind+solar are a moon cast shadow of what it costs to decommission Nuclear and process it's waste.

        • "Why wind? It's not reliable. Nuclear pre-pays all its decommissioning costs"

          That's the idea, but it never really works out that way, and the taxpayers always wind up holding the bag.

          • So the issue is the Federal Government (you know, the NRC) not charging enough? And this is the entity (the Federal Government) you want to give even MORE power to, to control other areas of your life?
        • and provides 9% of California's entire electrical energy needs, with just 12 acres of land.

          By the way, you could build wind turbines on that 12 acres to go along with the nuclear plant. And some solar. You'll find those to have a negligible contribution at that size, though.

  • There will come a point where we will have to turn to more nuclear fission power, or the lights will go out.

    There is not much to debate here any more. We are running out of options. If we want to keep the lights on, and not burn coal, then we need nuclear fission power.

    You want to claim that solar power with batteries is cheaper than nuclear power? That's fine. Go build those solar collectors and batteries. Here's what will happen, people will find out that batteries don't care if the electricity comes

    • Pumped water is being proven as a viable grid-scale battery technology, with promising candidate sights having been across most of the world. Stacked stone also seems promising, though I haven't heard of anyone actually using it on a large scale.

      Fission likely has its place as well - but I think we need to ensure that the projected cleanup costs are placed in escrow at the time of construction, that waste sequestering and/or reprocessing must be pre-paid when the fuel is purchased, and that corruption and

      • Fission likely has its place as well - but I think we need to ensure that the projected cleanup costs are placed in escrow at the time of construction

        I don't have a problem with that, but it should be done across the board, for all generation facilities of all types and, really, for any other sort of construction project that is expected to have a limited life span (i.e., pretty much all of them). And the cleanup cost projections should use consistent assumptions across all projects.

      • Fission likely has its place as well....

        A decade ago that was my rallying cry. Now? Not a fucking chance.

        Wind and solar plus storage is already undercutting nuclear power, and there are far, far less NIMBY problems with it. (Not 0, thanks fucking Ted Kennedy et., at.)

        I'm in the midwest and I can guarantee that there will be no new nuclear power plants dropped around here without a couple of decades of fighting. But wind turbines? Farmers are already renting out spots in their fields for them. Solar? We're already creating fields of panels, puttin

    • to build nuclear plants cheaply, reliability and safely. Worse, when they're at the end of their useful life private businesses will keep running them, as they did in Fukushima, at tremendous risk. Canada is thinking about new nuclear plants, not actually doing it....

      Wind and Solar aren't so much cheaper as they are more predictable. Westinghouse just went tits up because they underestimated the costs of building a reactor.

      I'm happy to be proven wrong, but I'm just not seeing it. I'm not seeing new
      • 1. How do we build reactors for a predictable cost?

        Practice and experience.

        We won't know how to do this right until we've done it wrong a few times. I can hear it now, "OMG! You want another Chernobyl after another until we figure out how to do it right?!?!?!?"

        Building another nuclear power plant "wrong" does not mean another Chernobyl. We've built enough nuclear power plants that we won't do that again. It's more like we'll be over budget, late, and under performing. More like a bad movie that doesn't make it's money back or a car that doesn't sell.

    • by bsolar ( 1176767 )
      Are fission power plants insurable?
      • Re: (Score:2, Flamebait)

        by blindseer ( 891256 )

        Are fission power plants insurable?

        It doesn't matter. It's nuclear fission power or the lights go out. If private industry won't insure them then the government will have to.

        It is just that simple, it's nuclear power or the lights go out.

    • by Uecker ( 1842596 )

      In the last 10 years, Germany reduce nuclear power from 148 TWh per year to 76 TWh while increasing renewables from 94 TWh to 226 TWh. At the same time coal reduced from 125 TWh to 83 TWh and lignite from 150 TWh to 146 TWh (almost stable). At the same time, consumption was reduced from 619 TWh to 596 TWh and exports increase from 23 TWh to 51 TWh. The increased scale of the market for renewables helped to reduce prices of solar and wind substantially. Of course, it was stupid to shut off running nuclea

    • by AmiMoJo ( 196126 )

      I've been using 100% renewable electricity for years now and the lights never went out.

      It's a shame there isn't an option for people to choose to subsidise nuclear power. You could opt to pay say £0.50/kWh for nuclear and I could take my chances paying £0.15/kWh for renewables.

  • by Brett Buck ( 811747 ) on Monday December 02, 2019 @10:58PM (#59479030)

    If a utility cannot insure the plants, the cost of any settlement will be passed on to consumers, since right now, there is no practical alternative. They can't just shut down.

  • We have reached the point where I have to rhetorically defend *coal mines.*

    I really don't like the fact that insurance companies have become a de facto world government. I feel like several science fiction authors have written how that's going to turn out for us.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      The insurance companies are not becoming the world government -- they are only creating a quantified measure of the real risks of running an operation or project. If a project can't get insurance on the open market then it means that the potential losses from that project are more than it is worth. The coal industry is huge -- it could self-insure if it thought the risk/reward was worth it. And if it were only political pressure knocking out insurance for the coal projects then there would be some big in

      • The problem with the nuclear industry is the same problem that it's always faced. Half-life. The risks stretch for thousands of years into the future. The rewards are all immediate.

        We're at 400 ppm CO2 globally. According to the latest climate science, we can either change how much CO2 / capita we emit or nature will change the number of people.
  • by WindBourne ( 631190 ) on Tuesday December 03, 2019 @12:26AM (#59479192) Journal
    Seriously, Coal, in fact, Fossil fuels, need to be held accountable for their actions. And not just the coal mines, but the utilities that picked them, esp in recent time.

    Now, we need to get Chinese government to quit funding building of new coal plants.
  • Insurance might be an issue for private companies. But most coal power plants are built in China or India; Vietnam is also building a lot (see below); when built and run by the government, no private insurance company is needed.

    Historically, Vietnam, like Switzerland, used mostly Hydropower. But climate change makes Hydropower in Vietnam increasingly unreliable; to avoid that problem, the Vietnamese government is shifting to coal (and a bit of solar and wind) instead. Lots of new coal plants have been built

  • by skaralic ( 676433 ) on Tuesday December 03, 2019 @01:40PM (#59481236)
    This is a non-story as it is China that is using all the coal and building more and more coal power plants every day. I'm sure they insure their own stuff... or don't even bother with insurance.

    The useful idiots in the west don't realize that their first world fantasy problem of Global Warming/Climate Change/Climate Emergency/Climate Bullshit has no effect other than making China more competitive at the expense of their own countries. And a more powerful China comes with a few other real problems.

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