Transcript SECTION ONE - London Business Interruption Association

LBIA - 7 March 2011
Introduction
Steve Allen
Power & Engineering Director
UK & Europe
The Business Interruption Issues of Insuring Renewable Energy assets
1.00 to 1.15 - RSA’s Renewable Energy journey so far
Steve Allen, Power & Engineering Director
1.15 to 1.30 - Future Challenges in Wind & Wave / Tidal
Adam Hearn, Lead Underwriter, London Market
1.30 to 1.45 - Future Challenges in Bioenergy & Solar
Steve Kelly, Global Centre of Excellence BioEnergy
and Solar
1:45 to 2.00 - Questions
2.00 Close
RSA’S RENEWABLE ENERGY
JOURNEY SO FAR
Steve Allen, Power & Engineering Director, UK & Europe
RENEWABLE ENERGY
Bio
• Waste to energy, Biomass, Bio-gas, Bio-fuels
Solar
• Photo-voltaic,
Concentrated, Thermal
Renewable Energy
• Full product line proposition
• Construction & Engineering
• Property
• Business Interruption / Delay in start up
• Marine
• Renewable energy generation projects
• Manufacturers of energy generation
equipment
Small Hydro
• Less than 50MW
Wind
• On/off-shore wind turbines
A MARKET LEADER IN RENEWABLE ENERGY INSURANCE
• Launched global business in 2007
• First to market, building on 30 years of
experience
• 3 Centres of Excellence support operations in 15
countries
• RSA is a market leader
• 11% market share in wind, 8.5% across
renewables
• Helped to Cover 80% of offshore windfarms
• Strong capability
• Deep technical expertise
• Broker, manufacturer and customer relationships
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UNDERWRITING PROGRESS
• We have been part of flagship projects worldwide
• Onshore since 1978
• The first – Vindeby
• The biggest - London Array
• The world’s first floating Turbine - Hywind
• Hydro – We insure Scottish and Southern Energy, one of the largest Hydro
owners in the UK
• Bio – we insure the world’s first plant to be powered by chicken litter!
• Wave Energy – Pelamis
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SOME OF THE ISSUES WE SEE IN THE INDUSTRY
• Technical and performance challenges
• Availability of key components
• New equipment, new suppliers
• Experience of project developers
• Political uncertainty
• Availability of project finance
• Planning regulations
• Access to grid and transmission
shortage
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THE BUSINESS INTERRUPTION ISSUES
• Availability of spares
• Access
• Availability of transport & installation vessels (TIV’s)
• Lead in times
• Repair times
• “Recovery” times
• Serial Losses
• Age of Plant
• Bottlenecks ie Transformers
• Gate Fees
• Availability of skilled maintenance
• Assessing lost revenue / profit
• ROC’s, LEC’s & “Recycled” payments
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WIND, WAVE & TIDAL
Future Developments & Challenges
Adam Hearn, Lead Underwriter, London Market
AN INDUSTRY PACKED WITH INNOVATION…
From wind turbines in the ’80’s to floating ones…
…we like playing our part in supporting the industry’s
development.
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AN INDUSTRY WHICH IS CONTINUALLY EVOLVING….
Today a typical onshore wind turbine has a 90m hub height and each blade
is 45m in length…
………..There are turbines in development stage which have a 200m
hub height and 100m blade!
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AN INDUSTRY WHICH IS CONTINUALLY EVOLVING….
The 100m blade would just about fit on a football pitch
When we consider BI size matters!
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PROTECTING THE FUTURE OF THE WIND INDUSTRY
• Larger turbines
• New designs
• New manufacturers
• New methods of installation
• Different vessels
• Logistics onshore/offshore
• Increasing demands from financial institutions
• Manufacturing bottle necks
• Availability of qualified service and
maintenance guys
• The new oil rig? People living on
transformer stations
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TRANSPORTATION LOGISTICS
• availability of the
appropriate vehicles
• appropriate routes need
planning
• the need to liaise with
the police for traffic
assistance
• influenced by the
weather conditions
… all of this takes time
and will impact the
Business Interruption
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TRANSPORTATION LOGISTICS OFFSHORE
• availability of the
appropriate vessels
• there are only limited
number of boats able to
ship the turbines
• cost of hiring these
vessels
• influenced by the
weather conditions
… all of this takes time
and will impact the
Business Interruption
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HOW WILL IT CONTINUE TO EVOLVE?
SOURCES:
1. Pelamis 2 – Pelamis
2. WaveHub – ReCharge
3. Desertec – Desertec Foundation
4. Aerogenerator – Guardian
BIOENERGY & SOLAR
Future Developments & Challenges
Steve Kelly, Bioenergy & Solar Global Centre of Excellence
PROTECTING THE FUTURE OF THE BIOENERGY INDUSTRY
• Technology - No homogeneity,
Corrosion issues, Key item sourcing
• Operators - Farmers through to
utilities
• Motivation - Revenue generation
verses cost avoidance
• Market - Carbon neutral verses
carbon free
• Fuel supply - Erosion of green
credentials
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PROTECTING THE FUTURE OF THE SOLAR INDUSTRY
• Technology - development of
thermal plants and thin film
technology
• Cost - Solar is becoming more and
more an economically attractive
solution
• Efficiency - Heat storage
• Natural Perils - Wind and Hail
• Distribution - Population versus
location
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PROTECTING THE FUTURE OF THE SMALL HYDRO INDUSTRY
• Equipment - supply of equipment
from new entrants to the Global
stage
• Cost - other technologies becoming
more cost effective, hydro less so
as still labour has intensive civil
works
• Natural Perils - Landslide,
Snowslide, and Flood, with more
extreme weather events the risks
are likely increasing
• Distribution - Often, hydro plants are
in remote areas resulting in T&D
problems
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ASK THE AUDIENCE...
Will more electricity be generated
from renewable energy sources in
2050 than fossil fuels?
1. Yes
2. No
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Thank you for your attention
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Closing Remarks
Steve Allen