In the U.S., the Biden Administration has approved the country’s first large-scale wind project in Massachusetts, the first of many with plans to approve at least 16 more along the East Coast. This concerns the application of wind turbines to turn electric generators for electrical power.
The announcement is based on the goal of installing 30 gigawatts of offshore wind capacity by 2030. In Biden’s announcement he states that hitting this target would create thousands of jobs and provide enough clean electricity to power about 10 million homes in the U.S. every year.
In relation to this, Interior Secretary Deb Haaland stated: “This is a significant milestone in our efforts to build a clean and more equitable energy future while addressing the climate emergency.”
Important as the U.S. news is, China has the world’s largest capacity for wind energy, totalling just over 288 GW at the end of 2020. Even during the coronavirus pandemic, China added 52 GW of new power during that year, far more than any other country.
Insurance opportunities
While wind power delivers benefits, there are technical challenges, adverse weather conditions as well as high investment and operation costs are unsettling both contractors and investors. False starts, component vulnerability, defective designs and changing original equipment manufacturer warranties, general damage, and lower-than-expected returns are leading to the demand for insurance and boost the claims process. Such is the extent of claims, that insurers and asset owners often need to reset their benchmark for renewable energy risks.
This could create rich picking for the insurance sector.
Commenting on the development is Jack Martone is senior vice president, AEU Advisory Services for The American Equity Underwriters Inc., an Amwins Company.
Martone tells Digital Journal: “The growth of the solar energy industry is bringing business sectors together to make offshore wind farms a reality with workers needed for maintenance and repair, loading and moving, transportation hubs and construction.”
This represents a major change to work. Martone says this also presents a change for the insurance businesses: “This growth translates into a growing need for infrastructure and liability protection – including taking into account new occupational liability exposures that didn’t exist before and providing adequate coverage for any associated risks.”
This creates business opportunities, Martone notes: “For insureds, there is no shortage of available coverage, the challenge is simply in making sure the right insurance is in place for the unique exposures that exist.”
