New Challenges for windenergy€¦ · Source: GWEC 2008 Report. Total worldwide 2008 120.8 GW. 29˜09˜2009˜ S˜˜˜˜ 11 New Challenges forWindEnergy –IMIA WGP 6209˜ ˜ K˜˜˜

New Challenges for Wind Energy

IMIA WGP 62 (09)

Karl C. Hertenberger

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New Challenges for Wind Energy – IMIA WGP 62 �09�

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Working Group:Karl C. Hertenberger, HDI-Gerling, Hanover – Chairman Truels Kjer, Codan, CopenhagenJaime de Argüelles, Allianz, Madrid Niels Kragelund, Codan, Copenhagen Rainer Ellinghaus, AXA, Cologne Michael McBride, Munich Re, Princeton Kun Hong Ho, Scor, Singapore Alberto Mengotti, Mapfre, Madrid Thomas Howe, HSB, London Friedrich Scholz, AXA, Cologne Michael Johst, If, Copenhagen Klaus Schreiber, Gothaer, Cologne

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A) Ongoing Booming Demand1.1 Implication of the Kyoto Protocol

• Kyoto Protocol adopted in Kyoto Japan in 1997

• Kyoto Protocol came into force in February 2005

• Kyoto Protocol

Main feature: To set binding targets for 37 industrialized countries and the European Community

Main target : Reduction of man made greenhouse gas emissions by approx. 5% from 1990 levelsover the period from 2008 – 2012

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Climate ChangeMessage of the IPCC

One clear message from the IPCC‘s 4th Assessment Report:

To avoid the worst and irreversible damageof climate change, the global greenhouse gasemissions must peak and begin to decline before 2020

IPCC: Intergovermental Panel on Climate Change

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• The Kyoto Protocol contains no statement in respect of which technology should be installed to reduce the emission of Green House Gas (GHG)

• Wind energy as part of the so called renewable energies does not emit any GHG

• Even during their life time cycle modern wind turbine generators produce 60 to 80 times the energy consumed in their manufacturing process

• Therefore wind energy becomes a main topic all over the world to fulfil the targets of the Kyoto Protocol

A) Ongoing Booming Demand1.1 Implication of the Kyoto Protocol

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A) Ongoing Booming Demand1.2 Expected outcome of the Copenhagen Conference

Copenhagen UN Climate Change Conference Dec.2009

Expected outcome:• Further reduction of man made impact on climate change beyond

the 2012 targets• Minimum of 30% reduction of GHG on the basis of 1990

Major Questions:• How much are the industrialized nations willing to reduce their

emissions of GHG?

• How much are the major developing countries such as China and India willing to limit the still rapid growth of their emissions

• How to finance the engagement of developing countries in reducing their emissions

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A) Ongoing Booming DemandArguments pro Wind Energy

Wind energy :• Is clean• Is indigenous• Is inexhaustible• Is fast to deploy• Creates many jobs • Uses virtually no water• Is economically competitive• Is a strong contributor to „decarbonise“ the

power sector

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A) Ongoing Booming Demand2. Wind Power Market Overview

• Statistics published in 2008 prior to the onset of the financial crisis in 2008

• The renewable energy sector seems not to be affected to the same extent like other parts of the industrial or financial sector

• „The financial crisis must not be an excuse for not investing in renewable energy“(British Prime Minister Gordon Brown)

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A) Ongoing Booming Demand2.1 Status in 2008

Global cumulative wind power installed capacity 2008 is 120.8 GW -54,5% of which is in Europe

Source: GWEC 2008 Report

Total worldwide 2008120.8 GW

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Global wind power market growth is expected to be 22,4% p.a. till 2013

Forecast development wind power market 2008 – 2013(annual newly installed and cumulated capacity in MW)

A) Ongoing Booming Demand2.1 Forecast 2013

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A) Ongoing Booming Demand2.2 Capacity Growth by Region 2008 - 2013

Regional installed wind power capacity 2013

82.5

+200%

5.7+850%

118.0

+79%

3.2+360%

1.6+122%

117.4

+380%

5.3+221%

TOTAL WORLDWIDE 2013:332 GW (+174%)

The wind market is yet dominated by early movers – However, largeutility companies already account for 37% of cumulative installations

2008 Top 10 Wind Turbine Suppliers(Supplied GW in %)

2007 Top 10 Energy Company/ IndependentPower Producer Wind Farm Operators(Cumulative GW capacity (in total: ~34,5 GW))

Source: Roland Berger, Strategy Consultant

A) Ongoing Booming Demand2.3 Manufacturer Market Share

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• USA passed Germany and is now no.1 in wind power

• China‘s total capacity doubled for the 4th year in a row

• Ranking Top 5: USA-Germany-Spain-China-India

• € 36.5 billion market value for turbine installations

• 400,000 people employed in wind industry

• Electricity production 260 TWh

• Saving 158 million tons of CO2 every year

A) Ongoing Booming DemandSome Highlights

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A) Ongoing Booming Demand2.4 New Manufacturers

• Large demand for wind turbines forces new manufacturers to enter the market

• In China alone more than 20 new turbine manufacturers entered in 2008 the Chinese market (in total 70 manufacturers in China)

• The challenge: To develop and manufacture wind turbines which sucessfully last its design lifetime of 20 years

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B) Technological Development and Trends1. New Technologies

• Constant development of new types and models

• Main focus on improvement of conventional three blade upwind turbines

• Trend towards larger and more efficient designs

• Improving the reliability through early detection of problems by increasing the sensitivity of the system

• Currently the largest generators in serial production are 5 MW. Larger units are being tested

• New offshore installation system „Place And Plug TM“ can save up to 10% of the total project costs

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B) Technological Development and Trends1. New Technologies

Principle of „PLACE AND PLUG TM“

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750 – 1500 kW 1501 – 2500 kW > 2500 MW< 750 kW

BladeHub

RotorNacelle

Hub HeightRotor diameter

>2t >6t 10-18t>3t >15t 25-71t>6t >33t 54-125t

>28t >56t 91-315t>45m >65m 80-120m>48m >79m 90-126m

<2t<3t<6t

<28t<45m<48m

Source: BCG Research, Grafik: Bundesverband Windenergie

B) Technological Development and Trends1. New Dimensions

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B) Technological Development and Trends 2. New Dimensions

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• Wind farms from relatively small size in Europeup to over 100 MW in USA and AustraliaInsurers view: Increasing exposure esp.in BI

• Demand exceeding the manufaturing supply by far resulting in a) Escalating costs for WTGInsurers view: Uncertainties in values reported

Consequences: Limiting liabilityb) Severe quality problems of major componentsInsurers view: Increasing claims esp. serial losses

B) Technological Development and Trends2. New Dimensions

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B) Technological Development and Trends3.1 Repowering

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C) Claims Issues„Normal“ MB Losses

GearboxGeneratorMain shaft

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• Most operational covers are all risk covers, the „property perils“ are included !!

• Fire damage is often very extensive and results in a total loss of the WTG.

• In most cases, there is no automatic fire extinguishing equipment in wind turbines

• The local fire-fighting services will in most cases at best be able to ensure a controlled burn-down of the WTG

C) Claims IssuesFire Losses

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Defense of fire not possible (Source: Spiegel)


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Burning wind turbine at 107 meters height, 2008 Buxtehude (Source: Local XXL)


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Burning WTG at 64 meters height, Rendsburg-Eckernförde. Fire following lightning strike (Source: Spiegel)


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Major known problems on:Foundations - gearboxes – generators - blades

German market reports:• 2.200 turbines have defects in foundations (total:21.000)• Thousands of faulty blades• Hundreds of faulty bearings and generators

Assumption:• 15-20% of all installed wind turbine units contain defects

at the time of delivery

C) Claims IssuesSerial Losses

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Serial defect in foundation

C) Claims IssuesSerial Losses

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D) Offshore versus Onshore farms

• Different weather conditions

• More complicated handling of wind turbines

• Cable laying between wind turbines

• Export cables

• Additional and different costs in general and in particular for DSU or BI

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1. Certification

2. Fire Protection

3. Condition Monitoring

4. Oil Analysis

5. Warranty Surveys

F) Guarantee-Service and Maintenance

G) Requirements on Persons working with WTG

E) Risk Considerations

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E) Risk Considerations1. Certification IEC 61400

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Key risk features:

• High value concentration in the nacelle• Concentration of potential ignition sources in the

nacelle• Increased risk of lightning strike• Unmanned operation• No fire-fighting interventions due to height• Remote and hard-to-reach WTG sites (offshore)

E) Risk Considerations2. Fire protection

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E) Risk Considerations2. Lightning

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Advantage Disadvantage

Copper mesh around the entire blade tip

• Easy to laminate into blade surface

• No discharge into interior of blade through the blade structure

• Protection of the entire blade

• Susceptibility to destruction of the mesh structure at strike point

• Difficult to repair and replace

Replaceable metal tip or cap

• Fairly low melt-out damage at strike point

• Replacement is possible

• Complex/costly design and attachment to glass fibre structure

• Conductive connection for discharge must be provided

Replaceable metal receptors


• Small arrester area, no protection of edges at blade tip

• Complex/costly design• Conductive connection for discharge must be provided

Metal sections (in blade edges)


• No discharge into inferior of blade through the blade structure

• Additional protection from lateral lightning strike

• Complex/costly design and attachment to glass fibre structure

• Not easily replaceable• Need to be designed for the requisite fatigue strength under variable stress

Advantages and drawbacks of various rotor blade protection systems

E) Risk Considerations2.Lightning Protection

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Condition Monitoring Systems detect deviations from normal operating level in order to:

• Maximise component utilisation by extending equipment‘s service life

• Enable trouble-free equipment operability

• Enable high availability rates

• Enable a timely, effective and cost-efficient response

• Minimise the necessary repair times and costs

• Avoid prolonged shutdowns and associated consequential costs

E) Risk Considerations3.Condition Monitoring

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Warranty Surveyors

• London Offshore Consultants

• Global Maritime

• Noble Denton Associates

• London Salvage Association

• Det Norske Veritas

• Germanischer Lloyd

• Survey Association Ltd. A/S

E) Risk Considerations5.Warranty Surveys

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MR Special Offshore Wind Farms Insurance Cover

The warranty surveyor shall:

• Be involved from early stage of the project

• Review and approve procedures and their execution

• Issue certificates on the project (as applicable)

• Review and assess the suitability of vessels and tools

• Attend and verify critical paths of the project

• Specify recommendations to be met

• Issue a report which documents his work, findings and recommendations

E) Risk Considerations5.Warranty Surveys

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F) Guarantee- Service and Maintenance

• Manufacturer‘s warranty period: normally 2 years extensions up to 5 years are possible

• To evaluate the manufacturer‘s willingness/ability to meet the warranty obligations is difficult for the buyer

• The warranty claim can wrongly be claimed in the operational cover

• Noncompliance with service period can lead to a denial of claims

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• Allow only qualified people to work with WTGs

• Service and repair work requires training and knowledge

• Availability of updated version of software and service manuals

• Access to spare parts

• Sufficient experience with control systems

G) Requirements on Persons working with Wind Turbines

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• Kyoto Protocol has set binding targets for 37 industrialized countries and the European Community to reduce GHG

• Copenhagen Conference in 12/ 2009 is expected to define further targets to reduce GHG by 30% in 2020

• Wind energy is already and will be a major part to achieve the GHG targets

• The wind turbine industry has developed rapidly within the last 15 years and will continue to expand at an even faster rate in the next decade

• For manufacturers it will become an critical issue to invest heavily in quality of design, manufacturing and maintenance of their equipment

New Challenges for Wind EnergyH) Conclusions

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• For insurance industry serial defects will be an ongoing severe problem

• Employment of improved monitoring systems can reduce those defects

• Offshore wind parks will increase the risks and the costs for the insurance industry explicitly

• Insurers who wish to specialise and profit in the field of wind energy should be willing to invest heavily in engineering knowledge, underwriting risk management and claims handling

New Challenges for Wind EnergyH) Conclusions

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Thank you for

your kind attention


Documents

New Challenges for windenergy€¦ · Source: GWEC 2008 Report. Total worldwide 2008 120.8 GW. 29˜09˜2009˜ S˜˜˜˜ 11 New Challenges forWindEnergy –IMIA WGP 6209˜ ˜ K˜˜˜