Amidst the continuing trend towards electricity generation from renewable and lower carbon energy sources, gas is a fossil fuel that is still favoured by many over coal in terms of CO2 emissions per MW generated and other pollutants.
Gas is expected to maintain its contribution to global electricity demand of approximately a quarter until at least 2040. The growth in shale gas, especially in the US, is helping the gas generation market increase.
The role of gas is also beginning to transition from baseload supply to being more flexible and providing peaking electricity generation in response to increasing percentage of intermittent renewables on the grid. This could pose as a challenge for the sub-sector industry in terms of profitability and O&M due to increased stresses on the plant.
We can provide power insurance and risk management solutions for gas power stations. Our team of experts have extensive experience with gas power generation risks and will work with you to find a bespoke solution including coverage for gas boiler explosions, steam turbines and fuel storage.
WHAT WE DO
We have extensive experience working with gas power stations. Characteristics of the sector technologies and typical challenges associated with insurance advisory and placements solutions include:
- Error in Design
- Ageing plant (wear and tear)
- Natural Catastrophe (earthquake, flood, windstorm)
- Machinery Breakdown
- Boiler Explosion
- Electrical Breakdown
- Operating regime Conveyor belt breakdown
- Gas turbine breakdown
- Fuel storage for auxiliary firing
- Steam turbine
- HRSG explosion
- Lube oil failure
- Bearing failure
- Foreign object damage
- Series Loss
Core insurance products that can be provided across the whole project development and operational cycle are:
Supplementary coverages include:
Our clients also receive the benefit of broad, lender-compliant, policy wording which we regularly review and update to ensure that we continue to offer the broadest cover generally available in the market.
The policy is designed to encompass all of the core insurance coverages associated with the project development and operational cycle noted above.
JLT has extensive international experience of providing insurance placement and advisory services to developers, asset owners and other key stakeholders, such as project financiers.
Our clients frequently engage us during the development phases of a project.
This ensures that we can provide guidance on insurance programme design well in advance of placement and take full account of insurance requirements that may be specified by lenders and other key stakeholders.
This also provides the opportunity to challenge on behalf of our clients any onerous requirements that such stakeholders may seek to impose.
Overspeed to gas turbine
Our client suffered an overspeed to their gas turbine which caused damage to the entire hot gas path section, exhaust diffuser, compressor section, generator and rotor. An oil line was severed and a small fire started that caused minimal damage within the turbine enclosure but major damage external to the machine.
The adjuster recommended a final settlement in the amount of USD 30 million net of deductible, however underwriters queried this amount wishing to apply average based on valuations performed by their consultants. They also argued that substations (not applicable to this loss) were not covered any damage that resulted from fire should be excluded. A settlement of USD 25 million was offered by underwriters.
Following numerous meetings and discussions with the underwriter, JLT managed to secure their agreement to a further USD 5 million in relation to the under insurance element of the over speed claim.
Subsequently, we received acceptance that substations were covered and a compromise was reached regarding the fire element of claims falling to this insured. This resulted in further payments to the reinsured in the amount of USD 1,153,125 which was 100% of the claim.
In the unfortunate event of a loss, we have a specialist team of claims personnel who have deep experience in dealing with large and complex claims across every segment of the power generation industry.
We act proactively to manage the claims process and the other stakeholders involved such as lead underwriters, follow markets and loss adjusters. The team has heavy involvement in the claims process whether this is regarding interim payments, the appointment of specialist experts or site visits.
Our claims team have strong relationships with the leading loss adjustors around the world and are able to recommend the best resources to ensure that our clients’ claims issues are managed by people that understand their business.