Peter Van Santen Country Managing Director RSA Insurance Plc – Belgian Branch

MANAGING THE RISKS OF RENEWABLE ENERGY

PROJECTS

AGORIA – RENEWABLE ENERGY CLUB SUMMER EVENT 26TH JUNE 2014

A SECTOR WITH HUGE GROWTH AND POTENTIAL

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RENEWABLES WILL ACCOUNT FOR >60% OF INVESTMENT IN NEW POWER GENERATION TO 2030

SOME OF THE ISSUES WE SEE IN THE INDUSTRY

• Technical and Performance challenges

• Availability of Key Components

• New Equipment, New Suppliers

• Experience of Project Developers

• Political Uncertainty

• Availability of Project Finance

• Planning Regulations

• Access to Grid and Transmission Shortage

RENEWABLE ENERGY FOR RSA

WIND

On/off-shore wind turbines

SOLAR

Photo-voltaic, Concentrated, Thermal

THIS IS WHAT RENEWABLES MEANS TO US Full product line proposition: • Construction & Engineering • Property • Casualty • Marine Target customers including investors, manufacturers, developers and operators

HYDRO

Inc. run of river and pumped

BIO

Waste to energy, Bio-mass, Bio-gas, Bio-fuels

WAVE/TIDAL GEO THERMAL

RISKS IN RENEWABLE ENERGY: NOW AND IN THE FUTURE

• Mechanical failures • New technology and new manufacturers • Offshore – Specific Risks

• Technology – no homogeneity, corrosion issues • Revenue generation vs. cost avoidance • Experience

• More extreme weather events • Environmental challenges/remoteness • Natural perils

• Development of thermal CSP plants & thin film technology • Effect of natural perils • Distribution – population vs location

• Prototypical devices – currently no homogeneity in technologies • Embryonic sector – learning curve

• Well drilling risks • Exploration risk • Failure of installations

WAVE AND TIDAL

GEO THERMAL

HYDRO

BIO

SOLAR

WIND

TECHNOLOGY RISK

OFF-SHORE WIND TURBINES TECHNOLOGY RISKS

• Access Complications – Higher Reliability required

• Higher Quality Components

• Improved Design to facilitate Service and Maintenance:

• Parts should be easy to replace • Access should be provided in a simple and uncomplicated manner • It should be possible to replace bigger and minor parts by means of crane equipment

• Cables & Foundations

• Corrosion Protection and Air Conditioning

• Intensive monitoring (twofold or threefold surveillance systems)

TRANSIT CLAIMS

Nacelle fallen off a trailer due to bad weather in

USA

TRANSIT CLAIMS

And another one…

Turned out to be

much more costly…

TRANSIT CLAIMS

Blades shifted during heavy

weather…

CONSTRUCTION CLAIMS

OPERATIONAL CLAIMS

An alternative WTG Design

Incorrect

Parameters in the Pitch system caused

overspeed and subsequent failure

OPERATIONAL CLAIMS

Short circuit in a power panel

Root cause was

lightening

OPERATIONAL CLAIMS

A failure in the pitch system caused overspeed and

explosion of the flexible coupling

The oil was ignited by the heat from the disc

break

RSA GROUP: EXPERTS IN RENEWABLE ENERGY & RISK

• As part of the RSA Group, one of the world’s leading insurers we can offer insurance solutions in over 140 countries around the world

• We were the first insurer to launch a global renewable energy business in 2007 - first to market, building on more than 40 years of experience

• Renewable Energy specialists in 15 countries worldwide providing local and global insurance solutions and supporting industry growth

• Approximately 15% market share worldwide and involvement in over 80% of the world's offshore wind farms

• We are also involved in the wind energy insurance programmes of all of the top ten European utility companies

• Why we believe in renewable energy: • Supports economic growth • Regenerates local communities and contributes to job creation • Reduces potential impact of climate change • Local supply to feed energy needs

RSA GROUP: AN END TO END INSURANCE SOLUTION

Our product covers the full customer experience from plan to operation...

Transit Construction Operations

Marine Transit Covers loss of and/or damage to goods

while in transit

Contract Works Property damage caused during construction

Property All-Risk and machinery

breakdown

Comprehensive property damage

cover during operation

Marine Delay in Start-up

Covers consequential losses to revenue caused through delays in transit

Advance Loss Of Profits

Covers consequential losses to revenue &

additional costs caused due to delays

in construction

Business Interruption

Cover provided for periods of operational

downtime as a result of an insured peril

General Liability Employer and Public liability cover during

construction

General Liability Employer and Public liability cover during

operation

Consultancy Services & Risk Management

Tailored packages for developers, manufacturers and contractors Access to the full RSA product range and Risk Engineering services Full benefit of the RSA Financial Strength Fully compliant solutions through the RSA Global Network