REFocus: What are the main issues to consider regarding exposures on the operational side?
Foyer: Maintenance becomes an issue the longer a wind farm is in operation, especially as some of the warranties expire on the older systems. Consequently, if a system is not properly maintained, then it will break down and subsequently shut off the income stream. We’re not only talking about “preventative” maintenance but also “predictive” maintenance, which comes from condition monitoring. This allows the owner to know that there are potential wear items that require attention. Using predictive maintenance, the operator can replace some of those parts prior to failure. In short, it’s about making sure you are planning for budgeting, maintenance and repair.
Wilcox: This approach not only applies to the turbine, but also the main power transformer in the substation. The operators should be doing condition monitoring on those systems as well, because that’s your pinch point. If you lose that main transformer, then you’re not pushing any power to the grid — and you’re losing income.
Foyer: That’s right. You could have 30 turbines and lose one, but still be able to operate. But if your main transformer goes out, then you’re not putting out any power to the grid.
Wilcox: It’s an even bigger issue if you lose the substation (the turbines rely on electrical power all the time), so for the system to operate properly, they require power. Even if the wind isn’t blowing, the turbines need power to react once the winds kick up again; the batteries only last but for so long. Condition-based monitoring allows you to do that critical maintenance during low-wind periods.
REFocus: What are some of the other dangers or issues?
Foyer: There’s the possibility of fires in the nacelle. And once it gets started, a fire is very difficult to put out.
Wilcox: There’s fire suppression technology available — as an aftermarket item — but we haven’t seen it being instituted as a requirement generally (with the exception of the state of Maine as part of its wind farm application process). This goes a long way in preventing forest fires and easing the concerns of neighbors in a wind farm community accept it a little better, just knowing the industry is being more proactive.
Along with fires is the threat of lightning. A strike usually hits the blade, and then it could surge through the system and damage electric components. But what I’ve found in my surveys of operators is that they have service agreements in the maintenance contracts on the turbines, but it doesn’t cover the actual blades. So who’s inspecting the blades and, by extension, the anchor bolts?
Foyer: Lightning is the number one cause of losses (from a frequency standpoint). It’s likely that operators have experienced — or will experience — lightning strikes in the operation of a wind farm.
REFocus: We’ve been talking primarily about risk mitigation as it pertains to on-shore wind farms. What are some of the issues you’re seeing with off-shore applications?
Wilcox: Although Travelers does not insure offshore wind farm projects, we realize that you have to deal with some of the same issues. That being said, with offshore wind farms being so far out, there’s more of an emphasis on workers’ comp issues, for example: Is there prompt medical care on site? What kind of systems do operators have in place to take care of worker, be it helicopters, vessels, etc., or trained emergency medical technicians to take care of those situations? When you start building plants in a remote location — whether it’s on the ocean or on a mountainside — these are provisions that have to be in place all the time.
Another thing to consider as an offshore wind farm ages is: will the operator be able to get the spare parts he needs for the turbine? Let’s be honest; there have been some wind turbine companies that have gone out of business, and it served as a real wake-up call to some of these owners. Those successful wind farm operators who have the appropriate resources will get through just fine. The same can’t be said for those operators who don’t keep abreast of the manufacturers and parts suppliers.
REFocus: Any closing thoughts for wind farm owners and operators?
Wilcox: Whether it’s onshore or offshore, risk mitigation and risk management is mostly about understanding all of the components of the system and how they are related to one another. I’ve been on farms where there’s been active condition monitoring on both the blades and turbines, as well as the substation. You’ll find that some of the plant operators who have background experience on the utilities side of the business have carried forward these practices to wind turbines.
Foyer: That’ true. It’s important to remember that you’re working with a complete electrical system.