Windustrial Risk Management will provide insurance carriers with the data and insights they need to create coverages project-by-project for floating wind systems.  Our team engineers with 50 years experience with floating energy, safety and loss prevention professionals, energy economists, political operatives, insurance executives, supply chain experts and workforce development specialists see and understand the intertwined risks facing the floating wind industry as it encounters the many uncertainties ahead.

This much is certain: 

More than 40 years ago, the first utility-scale wind farms were installed in California’s San Gorgonio Pass wind farm.

Just ten years later, Denmark’s Dong Energy (now Ørsted) commissioned Windby, the first offshore wind farm with 11 turbines in water no deeper than five meters.

Today, the well-respected World Forum Offshore Wind reports that worldwide, “248 offshore wind farms are currently in operation of which 134 are located in Asia, 112 are located in Europe and 2 in the USA  55 gW” – that’s a 500% increase since 2013.   But take note: Apart from a few experiments, all are fixed bottom.

In seven years, global investment in offshore wind is projected to exceed $100 billion.

No wonder, Chubb, Travelers, Marsh McClellan, Allianz, Axis, SwissRe, MunichRe, qCube, AJ Gallagher are among other insurance service providers that offer a range of coverages and services like third part claims administration and loss control for the construction and operational phases of fixed bottom offshore wind.  They see the opportunity, have the data, understand the risks and can design and price programs accordingly.   

There are no off-the-shelf coverages for floating wind, nor will there be any until carriers can wrap their collective heads around all of the risks. 

Floating wind turbines are a new thing, and an order of magnitude harder than fixed bottom turbines which were much harder than land-based wind farms.  Despite on-going research and development, floating wind turbines are beset with uncertainties. There are no data on how floating wind turbines fare over time at commercial scale, and no basis by which insurance programs can be designed and priced.  

The economics of floating wind are tenuous. 

They are defined on one side by the billions of dollars invested and on the other side by power purchase agreements approved by public utility commissions charged with ensuring reliable, affordable, sustainable energy.   Project delays and disruptions are the issue, whether they come from supply chain, labor shortages, engineering and design flaws, worker deaths and injuries, collisions at sea, harsh weather, and whatever else one might imagine.   

What happens in planning and construction will impact the reliability of operations and affordability of energy

In its May 2022 report on moorings, the World Forum for Offshore Wind (WFO) cautions, “One cannot diligently look at floating offshore wind without quickly drifting (no pun intended) into the meanders of mooring systems and solutions. Their impact on CAPEX and OPEX – without even tackling the environmental and recycling aspects – as well as the risks that need to be carefully mitigated to avoid jeopardizing the revenue source of floating wind (i.e. its dynamic electrical cable) are substantially more than anecdotal.”

Engineering models based on five decades of work with floating offshore oil and gas platforms, illustrates that three mooring systems may save money, but without redundancy, are a formula for failures.  All moorings fail eventually.

The risks do not stop with moorings.  At a time of chronic labor shortages and supply chain woes, there are no clear answers about how these massive floating wind turbines and platforms are sourced, built and installed.  There are no wind technician training programs that address floating systems.  There are no safety management plans yet negotiated with the labor unions to be involved in these projects.  And while California desperately wants to move to a carbon free future, some local groups are signaling litigation.   The ill-fated Cape Wind project endured 23 lawsuits before it imploded. 

Every element of insurance coverage for floating offshore wind will need to be invented.  Right now, Windustrial Risk Management has much of the data carriers will need to design programs that protect investors’ and owners’ interests in avoiding and managing losses.

Contact us at info@windustrialrisk.management for a free consultation.