Wave and tidal power technologies have enormous electricity generating potential but as yet represent the least mature of the renewable energy sub-sectors.
With the exception of a small number of tidal barrages most wave and tidal devices are prototypical, pre-commercial designs.
Many developers must navigate the challenges that face all ‘start-ups’ when seeking to promote a new technology or novel approach to an established business. Promoters of wave and tidal devices must balance financial and resource constraints while lobbying government and industry for support for the sector.
The prototypical nature of such devices also presents a challenge for the insurance industry and, by extension developers, requiring close collaboration and negotiation to deliver a suitable risk transfer solution.
WHAT WE DO
Our renewable energy team personnel have followed the evolution of wave and tidal risks over a number of years and successfully provided advisory services and insurance placement services for a range of projects. Examples include:
- In-stream sea-bed mounted tidal devices (Canada)
- Sub-sea mounted power generation and storage hub (UK)
- 2MW tidal turbine (Scotland)
- Prototype floating tidal device (Scotland)
- Floating array-based wave energy device (Scotland).
Core insurance products that can be provided across the whole project development and operational cycle are:
Supplementary coverages include:
The prototypical nature of wave and tidal projects means that insurers will usually limit the scope of cover that they are prepared to offer in relation to such prototypical design elements. These specific areas of coverage aside, our clients will receive the benefit of a broad policy wording which we regularly review and update to ensure that we continue to offer the broadest cover generally available in the market.
Our renewable energy team 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 program 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 especially onerous requirements that such stakeholders may seek to impose.
Market testing exercise for prototypical floating wave arrays
The assignment was undertaken on behalf of a new wave developer to tailor an insurance solution for a prototypical device to encompass design, fabrication, installation, operation, testing and maintenance, and consultancy in relation to their new device technology, with the longer term goal of a full commercial scale array.
Our team was able to respond to the challenges posed by the project in a number of ways:
- Prior experience of design and related insurance challenges posed by prototypical offshore testing devices and first / early deployments of new wave technology.
- Prior experience of testing location along with contractual review work in order to tailor the insurance to match contractual obligations, including unfamiliar regulatory requirements
- Selective discussions with potential lead insurers known to have the technical expertise and willingness to consider prototypical projects along with a thorough understanding of required covers for suitable insurance protection.
In combination, these measures and capabilities minimised the frictional challenges faced by our client to the insurance aspects of the project.
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 renewable energy 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.