Insurers see offshore wind as an attractive investment area: Willis

Insurers are increasingly seeing offshore wind as an attractive investment area with considerable growth potential, Willis Group Holdings (NYSE:WSH) says.
“Offshore wind is a significant opportunity for the insurance industry, with the market expected to grow nearly 30-fold between now and 2020,” said Michael Buckle, executive director of the Willis Renewables team, part of Willis Global Markets International.
“That growth will be driven by some 40 to 50 new wind projects, each with multi-million pound construction premiums. So it is no wonder that insurers are seeing offshore wind as the next big growth area.”
The United Kingdom is among the world leaders in offshore wind energy, Willis says.
With nine offshore projects operational, as well as a further seven currently under construction, the United Kingdom will have doubled its wind capacity to 1,500 megawatts by the end of 2009.
“The U.K. government’s target is to generate up to 20% of Britain’s electricity from renewables by 2020, 33,000 megawatts of which will come from offshore wind energy,” Willis says.
Willis concedes that the interest in offshore wind was not always strong.
“Despite the growth potential of offshore wind energy, the sector has received a lot of negative press, painting it as risky, overly expensive and technologically unreliable,” it says.
But a number of factors have rejuvenated current interest, including a new era of partnership between operators, constructors and supply chain companies; new technology; less financial risk; innovations to reduce project delays; and an offshore “supergrid” in northwestern Europe.