BY AGLAÉ BANGE
Japan’s rapid deployment of battery energy storage systems (BESS) is creating a new challenge for insurers, as an increasing number of utility-scale projects enter their portfolios. As the market matures, underwriting practices are beginning to evolve alongside it.
Insurance has become an essential component of project financing and operation, while also protecting developers against the operational risks associated with BESS facilities. These gained more prominent attention in January 2025, when a major fire at Vistra’s 300 MW Moss Landing BESS facility in California caused damages estimated at $400 million.
Japan too has such experience, though on a much smaller scale. In March 2024, there was a fire at a BESS facility installed alongside a 1 MW solar plant in Kagoshima Prefecture. The incident prompted METI to issue additional recommendations on equipment inspection and fire protection.
While such incidents remain rare, they are helping shape underwriting standards and risk-management practices for what is still a relatively young industry. How are insurers in Japan dealing with this issue and what factors do they consider when evaluating BESS projects and site selection?