Hydro Insurance Market UpdateHydro Insurance Market UpdateHydro Insurance Market UpdateHydro Insurance Market Update
BHA Annual Conference 13BHA Annual Conference 13BHA Annual Conference 13BHA Annual Conference 13thththth & 14& 14& 14& 14thththth November 2019November 2019November 2019November 2019
About Us
• The largest independent Insurance Broker in Scotland
• Offices in Edinburgh, Glasgow, Galashiels, Turriff & London
• Renewable Energy team of 15 employees
• Bespoke insurance policy wordings adopted by leading insurers
• Over 100 hydro schemes insured ranging from 100kW to 5MW
Claims Analysis As At Nov 2018
• 20 claims over £20,000 in the past 3 years
• Total cost of claims £1,500,000
• 75% of claims value relates to loss of income
• Only 2 out of 20 claims were construction phase claims
• 14 out of 20 claims were for electrical of mechanical breakdown
Claims Analysis As At Nov 2018
• Most common breakdowns were:
oGenerator windings or bearings damage
o Turbine runner damage
o Transformer damage
• No common generator manufacturer
• No common turbine manufacturer
• 2/3rds of claims were from hydro schemes built since 2015
Claims Examples
Generator windings insulation failure £100,000
Claims Examples
Generator bearing damage £200,000
Claims Examples
Generator stator damage £150,000
Claims Analysis As At Nov 2019
• 7 further claims over £20,000 in the past year
• All operational projects 100kW-500kW generating capacity
• Total paid & outstanding cost of claims is £600,000
• 6 claims were for electrical or mechanical breakdown
• Average material damage/business interruption premium £2,000-£7,000
Insurer Market Position
• HSB withdrew from the hydro market in late 2017
• CNA are withdrawing from renewable energy market from January 2020
• RSA are withdrawing from renewable energy market in Europe (excluding GB and NI, but including ROI)
• Only 3 core insurers remain with a further 3 with limited appetite for hydro
• Need to address disparity between premium income and claims
Insurer Market Position Cont.
• Premiums have been increased
• Excesses have been increased
• Risk capacity has reduced
• More detail required on O&M arrangements
Operation & Maintenance
Insurers require hydro scheme owners to have:
“A formal maintenance agreement with the manufacturer or specialist company working to the manufacturers recommendations”
Operation & Maintenance Cont.
Annual maintenance to include:
• Internal inspection of the turbine
• Inspection of all other equipment including generators, actuators, MIV, control panel
• Interim inspection after 6 months
RECORD ALL MAINTENANCE CARRIED OUT
Operation & Maintenance Cont.
In addition:
• 24/7 maintenance contractor response preferable
• Remote monitoring
• Regular checks of powerhouse
• Keep combustible materials to a minimum in the powerhouse
• Keep moisture & dust levels to a minimum in the powerhouse
• Fire extinguishers in the powerhouse
Operation & Maintenance Cont. –Health & Safety
• Often lone worker in remote locations responsible for routine maintenance
• Intakes & powerhouses main areas of risk
• Safe area of work considerations:
o safety lines & harnesses or extendable brushes at intake
o first aid kit, ear defenders
o radio equipment
• Who is picking up the Employers’ Liability risk?
Operation & Maintenance Cont.
• Benefits:
• Will make your hydro scheme more attractive to insurers in general
• Breakdown cover will be provided, which is the most likely source of a claim
• Improve performance
• Helps reduce downtime
• Increase longevity
The Future?
• Encourage cohesive support within hydro sector to reducing losses
• Hydro is still within the remaining insurers appetite
• Insurers are looking to increase their hydro portfolio…......for now
• We want to avoid another small wind turbine scenario
Stuart MacLeod, Account ExecutiveStuart MacLeod, Account ExecutiveStuart MacLeod, Account ExecutiveStuart MacLeod, Account Executive
T: 0131 561 2418 / 07940 837526T: 0131 561 2418 / 07940 837526T: 0131 561 2418 / 07940 837526T: 0131 561 2418 / 07940 837526
E: [email protected]: [email protected]: [email protected]: [email protected]
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