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ARTICLE · 03 JUNE 2026

Navigating Energy Price Volatility On The Path To Net Zero

As renewable technologies mature and energy markets grow increasingly volatile, traditional stabilising mechanisms like government subsidies and fixed-price power purchase agreements are giving way to merchant risk exposure. How can insurance innovation, supported by the right regulatory environment, transform energy price volatility from an investment barrier into a manageable risk that unlocks sustainable outcomes?

GuernseyInsurance

By Gus Majed, Group CEO and Founder and Adèle Gale, Managing Director of Paratus Services Guernsey, Paratus.

As renewable technologies continue to mature, unmanaged energy price volatility remains one of the greatest challenges to securing the investment needed to develop them. With increased volatility in the power market forcing more assets into merchant risk, fluctuating prices have become a central concern for investors and developers alike. It is precisely here that innovation in insurance, supported by the right jurisdictional environment, can help unlock sustainable outcomes.

For much of the past decade, renewable energy investment benefited from long-term stabilising mechanisms such as government-backed subsidies and fixed-price power purchase agreements (PPAs). These tools served their purpose well by reducing risk and attracting capital. However, as subsidies have rolled off and energy markets have evolved, increased merchant exposure has made revenues far less

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