Dan Stevens, RCG’s London office lead, recently gave a presentation at a seminar held by leading global advisory, broking and solutions company, Willis Towers Watson. The seminar, which took place in Prague, 16-17 Oct 2019, was part of a series on renewable energy, and was entitled De-risking Renewable Energy Projects.
Dan Steven’s presentation was entitled “Warranties and Service Agreements for Wind Farms – Key Considerations for the Insured and the Insurer”.
The presentation concluded that not all wind turbine defects warranties are the same and that project owners and the insurance community need to be familiar with the contract and wording of the key terms. Further. warranties need to be considered in the wider context of the cover provided by the service agreement and relevant
statutory/common law. Equipment manufacturers and independent service providers supply a number of different service agreement packages that provide varying levels of cover at varying price points.
Projects may adopt to use a third-party service provider or carry out the service works in-house, which, in some cases, may result in all maintenance and downtime being at the project company’s risk.
Modelling of real-world failure rates clearly shows variance in overall operation and maintenance (O&M) costs that depend on the chosen operational strategy. Under two modelled service agreements, additional O&M costs are excessively high when taking a “wait to fail” approach. A project owner’s operational philosophy often informs what type of warranty and/or service agreement a project has and therefore the exposure to additional O&M costs and downtime.
A full set of presentations from the meeting is available on the Willis Towers Watson website: HERE