Munich Re and Marsh team up for geothermal energy risk

Project developer Exorka, insurance broker Marsh and Munich Re have jointly developed an insurance concept covering the exploration risk of a geothermal energy project in Taufkirchen, near Munich.

Drilling operations have now begun.

Munich Re is once again assuming the significant risk of failure that thermal heat drilling entails.

The policy was negotiated in collaboration with Marsh.

Deep geothermal heat is considered a very promising form of renewable energy. It involves pumping hot water from strata at a depth of up to 5km to the earth's surface, where it is used to generate heat and/or electricity.

However, the substantial drilling and development costs associated with this technology often constitute a huge investment barrier because there is a high risk of not making a find.

Munich Re is providing cover for this risk for a geothermal energy project in Taufkirchen. Exorka from Grünwald, the general contractor, has been commissioned to deliver a turnkey combined heat and power plant, including drilling operations, to Geo Energie Taufkirchen & Co.

The deep geothermal energy drilling will be carried out by drilling-technology specialist Daldrup & Söhne, which recently successfully completed drilling operations for the neighbouring Grünwald/Oberhaching project.

Siegmund Fahrig, head of Marsh GmbH, said: "A further milestone has been achieved in that we have been able to involve Munich Re in this project, based on our special concept - recognised in the field of deep geothermal energy - for the critical exploration risk", "This underscores Marsh's market leadership as a consultant dealing with exceptional renewable energy risks."

Munich Re board member Thomas Blunck said: "With our expertise, we can also assume renewable energy risks that are not everyday occurrences and thus help provide greater investment security." Munich Re's renewable-energy commitment fits in seamlessly with the focus of the company, which has declared climate change a strategic topic.
Mr Blunck added: "We see climate change not only as a risk but also as a great opportunity, because if climate protection is pursued resolutely, new technologies will have significant growth potential."