It appears that offshore wind generation projects are going to eventually be part of the landscape.
Even before April’s approval by the federal government of the long-delayed Cape Wind project in Nantucket Sound, which will be the nation’s first offshore wind project, I began looking into insurance matters for both floating and stationary wind turbines. The comment most often heard from insurers was “they’re very technical and we really aren’t very interested.”
But how about the vessel component of wind power? Who’s going to deliver the wind generators to the stations? What types of specialized vessels will be designed and built for the nascent wind generation industry? Wind generators are down about 10 percent of the time for maintenance, so who’s going to transport personnel and parts?
When I started asking about insuring these “offshore wind service” vessels, I got a much different reaction from the ocean marine insurers. They want in on that action.
This is a small window into the souls of ocean marine insurance underwriters. They’re a very conservative group. At present, they don’t have enough data to determine how to underwrite and price insurance policies for stationary offshore wind generators.
There are several unknowns. Will the Jones Act apply to workers while on the rigs? How do you handle the specialized cargo vessels that will be needed to deliver and install blades that can be 80 meters long?
Here’s a few other questions:
• What type of vessel is going to clean the dried salt-water residue off exposed generator parts and what insurance exposures will that cause for vessel owners?
• What happens if a vessel causes a wind generator to shut down? Who pays for the down time?
• Is the U.S. Coast Guard going to inspect the vessels like they do tank vessels?
These questions need to be answered before ocean marine insurers will take that first baby step into the wind industry. It’ll be a major accomplishment to get the first insurer to commit. After that, the competitive juices may start flowing and more insurers will enter the new wind generation market.