|
|||
|
|
|
Wind Turbines are a Good Bet
Wind technology has come a long way and is now ready to be taken seriously by the insurance markets.
By DAN REYNOLDS, senior editor of Risk & Insurance® Once upon a time were wind turbines a dreadful thing to cover? You bet they were.
But guess what? Times have changed and the certification process, engineering and manufacturing of wind turbines has advanced sharply. No longer do financiers and insurers have to worry about large scale replacements of generators or leaking hydraulics or poorly designed blades that go clattering to earth. Sure, offshore wind energy is a different story with the costs to cover lost revenue or gear up replacement parts much scarier than the onshore version. Premiums for that risk can run three to five times what they are onshore, according to one expert. But things on land have stabilized to the point that the combined market is worth the risk. Government support for alternate energy is a big part of its expansion. For insurers who look at wind energy as a market, as horrendous as it is, that oil that is swirling around the Gulf of Mexico could have an upside. The national renewable energy standards that the wind turbine owners and their business associates crave may stand a much better chance politically here in the latter part of 2010 than they did in the latter part of 2009, before that natural gas rose up through the rigging of the Deepwater Horizon and blew it apart. The U.S. has just surged past Germany as having the largest usable wind capacity in the world. That's as compared to China, which has a lot of turbines up but doesn't have the infrastructure to turn all of those whirling blades into usable electricity. It's out in the middle of a body of water of course where the winds blow unobstructed and that is where the lost revenue and repair exposures are the greatest. There are projects planned for all up and down the Eastern seaboard and in the Great Lakes. The technology is now proven and the combined risk as it stands is worth it. Globally, the carbon emissions caused by the burning of fossil fuels are on everyone's radar. And the oil spill calamity that we face in the Gulf of Mexico can only further degrade politically the image of petroleum as an energy source and pump up the glamour of alternate energy sources such as wind energy. That means expanding opportunity for both the builders and owners of wind turbines and those that insure them. (Read Managing Editor Cyril Tuohy's Counterpoint "Tossing Premium to the Wind.") September 1, 2010 Copyright 2010© LRP Publications |
|
|
|
Entire contents copyright © 2013 Risk and Insurance® All rights reserved.
May not be reproduced in any form without written permission.
|