Sustainable energy solutions
Sustainable energy sources play a crucial role in reducing CO2 emissions and securing future energy supplies. Given our strategic focus on climate change, we are keen to support energy generation from renewable sources. But as sustainable energy projects increase in scale and complexity, so do the risks associated with them. However, innovative risk transfer solutions can help reduce these risks and drive investment in the sector.
Offshore wind farms are an expanding source of clean energy. But because the technology is relatively new and projects are increasing in scale and complexity, they are challenging to insure. Swiss Re Corporate Solutions specialises in understanding these risks and helping our clients to manage them.
Offshore wind is considered one of the most promising renewable energy sources. But like renewable energy in general, it presents very complex risks. Unlike traditional lines, there is no long loss history to refer to. Underwriting such risks is therefore challenging from an insurance perspective.
Swiss Re Corporate Solutions takes a special interest in offshore wind as it has both the large capacity and the technical expertise to help manage the associated risks. We are continually enhancing our understanding of these risks and share our insights with our clients as well as other insurers.
Insurance cover for two offshore wind farms: Dudgeon …
In 2014, we were involved in a number of offshore wind transactions. One of them is the Dudgeon Offshore Wind Farm, which will be constructed over the next three years on a site 32 km off the UK’s Norfolk coast. As a lead underwriter, Swiss Re Corporate Solutions provides an “all risk” cover for the whole construction period as well as a “maintenance cover” for the first 24 months of the wind farm’s operation. Norwegian company Statoil is one of the shareholders of the limited company that is developing the project, and will be the operator for both the construction and operational phases.
The Dudgeon Offshore Wind Farm is planned to comprise 67 highly efficient turbines with a total capacity of 400 megawatts, sufficient to supply more than 410 000 UK homes with sustainable energy. When finished, its output will be transferred to the UK grid through a seabed cable of 38 km and an underground cable of 48 km.
… and Sandbank
In 2014, Swiss Re Corporate Solutions also signed an insurance cover for the Sandbank Offshore Wind Farm, which is situated 90 km west of the German island Sylt in the North Sea. The wind farm is being developed by a joint venture between Vattenfall and Stadtwerke München (SWM, Munich city utility). Swiss Re Corporate Solutions offers protection to the project for the entire construction phase, which is due to start in 2015.
Like the Dudgeon Offshore Wind Farm, Sandbank will use high-tech equipment to ensure efficient power generation. It will have an installed capacity of 288 megawatts and produce up to 1.4 TWh per year with 72 turbines, enough to power 400 000 homes. The power generated by Sandbank and two other wind farms nearby (DanTysk and Buitendiek) will be transmitted to a converter station currently being built, SylWin alpha. There, the power will be converted to direct current, which will help to reduce transmission losses over the 200 km long sea cable.
For more information see Sustainable energy