Leading renewable energy insurance provider highlights need to enhance basic facility design and construction
New York, 7th May 2013 – As pressure placed on cutting the cost of clean energy increases, savings must not be found at the expense of an ongoing investment in critical design and construction specifications, the development and implementation of new industry standards and the evolution of established checks. That is according to GCube Insurance Services, Inc., the leading provider of insurance services for renewable energy projects.
The contention comes at a critical time for the North American wind and solar markets, as the use of energy storage facilities gains momentum, despite the high profile battery fire at a small wind farm in 2012. The total loss to property and the interruption of business is in the vicinity of $30 to $50 million, much of which is addressed by insurance.
While the exact cause of the fire is still under investigation, many expect the precise details of the incident will remain unknown.
However, what has quickly become apparent is that while it may never be clear exactly how the fire started, the incident went undetected and destroyed the building and its contents because there was no fire detection, alarm and suppression system.
"Given the ambitions by owners and operators to install and operate similar energy storage devices to help better manage the flow of electricity to the grid, this finding is particularly significant," says John McLane, President, GCube Insurance Services, Inc.
"When managed, maintained and operated effectively, energy storage technology presents a clear and growing opportunity for the wind and solar energy markets. And, despite the record size of the insurance claim, it's a technology that we will continue to support and back," he added.
"However, in order to ensure that such technology remains both viable and effective, an established system of procedures and routine checks need to be regularly carried out, with the system carefully monitored, in order to help mitigate against future industry loss."
According to GCube, while the establishment and development of these standards will require initial industry investment, without further action, future growth of renewable energy could be further curtailed if there is a repeat of this event.
Fraser McLachlan, Chief Executive Officer, GCube Underwriting Ltd., added, "Make no mistake, our insurance policies are in place to help enhance and protect all forms of renewable energy assets. A fundamental part of this business is therefore about supporting the industry and paying claims."
"While the battery fire loss was large and unexpected, that is the very nature of our business. It's imperative that we work directly with the market to establish and drive new industry standards, over and above simply having the ability to write a large check."
With over twenty-five years of experience, GCube currently safeguards and protects over 30,000MW of renewable energy assets currently in operation and under construction around the world. To date, its experienced, in-house team has paid out in excess of $200 million in claims.
In 2012, GCube secured $175 million in additional construction underwriting capacity to assist the development and evolution of the emerging biomass and geothermal energy markets.
This, combined with a significant partnership deal struck in 2012 with Munich Re, has seen the business open up new insurance lines and enhance its existing dedicated renewable energy insurance offerings.
GCube is the leading provider of insurance services for renewable energy projects in wind, solar, biofuels and biomass, geothermal, wave, hydro and tidal around the globe.
Its specialised focus and robust underwriting authority offers unparalleled property and liability insurance coverage for all construction and operational risks. With over 25 year's experience in the renewable energy sector, GCube understands the unique exposures of these power generation projects and assists its clients in identifying, quantifying and mitigating risk efficiently and economically while helping them achieve their business objectives.
To learn more about how we can support your insurance coverage requirements, please visit our website at www.gcube-insurance.com.