FROM OUR CORRESPONDENTUS EAST COAST
The 30 MW Deepwater Wind project off Rhode Island has become the first operational offshore wind farm offshore the USA.
construction sites directly by barge. There is certainly no shortage of towing
power in a harbour famous for its tugs, and Griffith is confident that the lack of local offshore service vessels can be resolved. That sector on the Gulf Coast has been hit hard by the low price of oil and gas, with many operators laying up vessels and laying off crew. For them, erecting turbine towers would not be so very different from setting drill rigs. “It is true that we do not have the
industry that supports offshore work here in the northeast,” said Griffith. Red Hook has a facility in Freeport, Texas, on Galveston Bay just south of Houston. “But you know how Texas is: those guys are just going to saddle up and come east when the opportunity arises. It is a highly qualified workforce.” If the Statoil project and even just a few
others go ahead, there will be a call for that workforce and the insurance and risk management to support it.
Statoil lease According to Statoil, the lease comprises an area that could accommodate more than a gigawatt of generating capacity, with a phased development expected to start with 400-600 MW. The New York Wind Energy Area auctioned by the US Department of the Interior’s Bureau of Ocean Energy Management is 14-30 miles (30-60 km) offshore in water depths of 65-31 ft (20-40m). The next step for Statoil will be to conduct studies of the seabed, grid connection options and wind resources involved in the lease site. “The USA is a key emerging market for
offshore wind, both bottom-fixed and floating,” said Irene Rummelhoff, Statoil’s executive vice president for new energy. There is, she said, “significant potential
along both the east and west coasts. Statoil is well positioned to take part in what could be a significant build out of offshore wind in New York and other states over the next decade. This effort is in line with the company’s strategy to complement our oil and gas portfolio gradually with viable renewable energy and other low-carbon options.”
HLPFI 72 January/February 2017
www.heavyliftpfi.com
Insurance risk emerges offshore
As the USA’s fledgling offshore wind energy sector develops, it will be looking to Europe for guidance on the issues it will face.
The bulk of the wind farm activity in recent years has been in Europe, and that continues apace. “Currently there is around 11.5 GW of operational offshore wind capacity across 82 wind farms,” said Jonny Allen, an underwriter at GCube. That includes, “more than 3,000 turbines across the North, Baltic and Irish seas. It is difficult to put a number on the annual premiums paid for these assets, but a conservative guess would be around EUR200 million (USD211 million). The largest markets are the UK and Germany, with Belgium, Denmark and others in a second tier.” Allen added: “We are anticipating a growth in
France, the USA and especially in Asia with markets such as Taiwan and South Korea starting to build first commercial projects in 2017. China is clearly a large offshore market as well, but visibility into the size, technology and insurance buying is limited from our perspective.” Phil Pavey, senior underwriter at GCube
Insurance, a specialist firm in renewable energy onshore and off, noted: “In the current market there is more than ample capacity to insure these risks.” That includes all-risks terms, including revenue protection and marine delay in start-up. “Generally, our experience has been that there
are also plenty of competent service operators. However, this is less the case in emerging markets and the more remote regions where wind and solar projects are now being built.” Pavey explained that in some instances a
purpose-built jetty has to be constructed for the project. “In those instances it is essential that there is
The biggest loss trends are coming from array and export installation activities which are very difficult to implement. – Jonny Allen, GCube
a marine surveyor on hand to represent the mutual interests of both insurers and the insured, to approve the load-stow-discharge method statement, and to ensure that the same is carried out as instructed.” As technology has moved to larger turbines,
bigger farms are built further from shore. That has driven the output of turbines to an average of 4.8 MW, with 8MW machines most recently installed off the UK, explained Allen. Installed capacities are averaging more than 700 MW per farm. “That evolution has not been without issues,”
said Allen. “As our publication on subsea cables highlights, the biggest loss trends are coming from array and export installation activities which are very difficult to implement. We have learned that proper risk management, instituted from an early project phase, good communication and management of interfaces, and the engagement with insurers and marine warranty surveyors all produce better underwriting results.”
Marginal improvements From a technical perspective, Allen noted, there are many marginal improvements, many of which are quite simple, that are incrementally improving the performance of contractors, “but we are still often learning the hard way as the push for levelised cost of energy means that corners will continue to be cut in an effort to find cost efficiencies. “The heavy lift/cargo portion is insured as part of
the construction risk and not placed separately,” Allen said. “It forms part of an amended WELCAR policy previously used for the upstream energy market. It extends to covering items such as removal of wreck, sue and labour. It also includes items such as offshore cancellation costs or extra expenses that occur when there is a loss, or imminent threat of loss, to the project installation process. Coverage is expanding all the time as more and more technical demands are placed on project teams to deliver offshore wind installation more quickly and cheaper than before.”
Deepwater Wind
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