Canadian Underwriter

Who’s building your client’s green energy farm? Why you need to know

July 19, 2021   by Adam Malik

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Whether it’s a solar or wind turbine farm, or any other energy-related facility, an insurer expert is raising red flags about the quality of people at job sites.

Underwriters care about a site and its propensity to be hit by bad weather — such as hail, fire or hurricane — as well as whether there are known defects with the technology or equipment.  But knowing the building contractors is also critical.

Underwriters want to know who is building or constructing the solar or wind farm, said Darren Tasker, head of energy and construction in Canada for Allianz Global Corporate & Specialty. “Are they a known contractor and what are their experiences? Do they know what they’re doing?”

What’s happening a lot these days is construction firms aren’t sending out their A-team — their highest skilled and most qualified unit — for such jobs.

“There is a stretch of talent [and], sometimes, even reputable construction firms. You want to make sure that you get it done right,” Tasker told Canadian Underwriter.

Wind turbine projects require special equipment — specifically, cranes.

“[The wind turbines] are big, big machines that are being installed and they’re getting bigger and bigger. And there are very specific cranes and crane operators who could only erect these turbines,” Tasker said. “So making sure that the availability is there is also critical.”

Brokers should also ensure clients are making sure that they can get replacement equipment in a timely manner, lest they have to make a claim because a machine was out for a longer period of time than expected.

“So sometimes, if there’s an inverter or blade that is damaged, how long is it going to take to replace it? Sometimes it can be 12 or 18 months. That will cause significant downtime,” Tasker said. “That’s another thing that needs to be factored in.”

Soil conditions are also important. If it’s a challenging area, that could lead to issues with the foundation. “That’s so important because the foundation isn’t done properly or it’s been challenged,” Tasker said in an interview. “You could have problems with the wind turbine collapsing or sliding or tilting.”

He recommended brokers get involved with their clients plans to make sure everything is planned out properly ahead of time. Bring in your insurer partner as well, he added. They may be able to add insight when debating between what type of equipment or technology to invest in.

“It’s sort of similar to Consumers Report when buying a car: ‘Okay, these manufacturers or these cars are known to have issues or there’s a lot of recalls,” Tasker said. “So I think it’s really important that the clients do their research and find any known issues when selecting the technology for their particular site.”

Insurers have the experience of knowing which manufacturers fail and succeed, he noted.

“That’s where you can leverage engineering expertise, experience and knowledge and know-how —insurers have [that],” Tasker said. “We know good technology from the bad ones that have had issues, not just nationally but globally. And also, brokers also have the know-how as well on these topics.”


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