Innovative insurance designed to protect turbine manufacturers from spiralling financial losses arising from turbine downtime has been purchased by REpower. A five-year insurance policy offered by Munich Re for an unnamed German offshore wind project has been taken out by the turbine manufacturer.
Speaking with Windpower Offshore, a REpower spokesperson declined to specify which offshore wind farm the insurance relates to or whether it relates to an operational asset or project that remains at the development stage. The spokesperson added that this is the first time the company has purchased such an insurance product and it is not yet clear whether such liability cover will become a standard element of its offshore wind turbine supply programme.
Earlier this year, REpower signed a deal to supply 54 6MW turbines for the Innogy Nordsee 1 project planned for the German North Sea, with thirty units of this design already installed at the Thornton Bank phase II project in Belgian waters. Thirty of REpower's 5MW turbines are deployed at Vattenfall’s Ormonde project, in UK waters. The 150MW offshore wind farm has been fully commissioned since February 2012.
Announcing REpower’s purchase, Munich Re emphasised that it is the first insurance company to offer "serial loss cover for offshore wind energy units". Under the terms of the deal, Munich Re will pay for repair and/or replacement of defective turbines as well as repair and replacement of individual components "if there are serial losses affecting a number of elements". Retrofitting of components later shown to be defective is also covered, "even if no loss or damage has been sustained," said Munich Re. The insurer will also pay for vessel deployment, which can be the most expensive element of an offshore wind repair project.
Munich Re's new insurance product may also be appropriate for suppliers of major wind turbine components, explained Mathias Hörmann, Munich Re corporate insurance partner for green tech solutions. Responding to Windpower Offshore's enquiries, Hörmann confirmed that the insurance coverage is available in a range of European jurisdictions and beyond. The company is exploring the option of offering "complementary cover" for offshore wind operators, added Hörmann, which would insure them against the "non-performance" of manufacturer warranties due to serial loss. However, such cover would require that both wind farm operator and turbine manufacturer be insured by Munich Re.
Commenting on the announcement of the five-year insurance deal, REpower chief executive, Marcus Wassenberg, said: "Serial loss cover for offshore wind farms gives our customers certainty regarding the funding of major projects, and the insurance cover and the guarantee Munich Re provides with it testify to the quality of our wind energy units."