Sustainable energy solutions
Offshore wind farm projects we were involved in during 2015
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.
Climate change mitigation
By facilitating the construction of offshore wind farms, these solutions support efforts to reduce CO2 emissions and hence mitigate climate change.
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. As a result, we are now considered a “lead market” for offshore wind risks.
In the last five years, Swiss Re Corporate Solutions has participated in more than 30 offshore wind projects, including wind farms, standalone offshore substations and standalone export cables. In the 2015, we were involved in 18 offshore wind farm projects worldwide and were the lead re/insurer in eight of them.
The foundations for the turbines of Block Island Wind Farm are being put in place. We insure construction and start-up delay risks of this project, the first-ever offshore wind farm in the US.
Block Island: first offshore wind farm in the US
In 2015, we insured a number of offshore wind projects in different countries, including the Block Island Wind Farm in the US (dwwind.com/ project/block-island-wind-farm). Developed by Deepwater Wind, this is the country’s first-ever offshore wind facility. The project is situated in the Atlantic Ocean, approximately three miles from Block Island, off the coast of Rhode Island, where there are strong and steady winds. Thanks to its expertise and proximity to the client, Swiss Re Corporate Solutions was appointed as the project’s lead insurer and provides both a construction all risk (CAR) and a delay in start-up (DSU) cover.
Construction of the wind farm is underway and is scheduled to be completed by the end of 2016. Our client, GE Wind (formerly Alstom), is building five powerful, highly efficient turbines that will generate a total capacity of 30 megawatts. The wind farm will give approximately 17 000 households on Block Island access to reliable as well as renewable electricity for the first time. To date, they have had to use diesel generators, which are inefficient and cause substantial air pollution. The power not used on Block Island will be transmitted to the mainland through a 21-mile long cable under the ocean floor.
Gode Wind 1 and 2: large wind farms in the North Sea
Swiss Re Corporate Solutions also continued to be involved in large, mainstream projects, eg the Gode Wind 1 and 2 offshore wind farms. Both are located in the German sector of the North Sea, approximately 45 km off the German coast and 33 km from the islands of Juist and Norderney. Construction of the two wind farms, which are being developed by Danish-based DONG Energy (www.dongenergy.com), started in 2015. We provide a CAR cover, ie an all-risk policy for material damage during the construction phase.
The two wind farms will consist of a total of 97 highly efficient, quiet Siemens turbines generating 6 megawatts each – 55 at Gode Wind 1 and 42 at Gode Wind 2. With a combined capacity of 582 megawatts, they will supply CO2-free power equivalent to the annual electricity consumption of approximately 600 000 German households. The two wind farms are expected to become fully operational in the second half of 2016.