Bergen Wind Academy poll reveals 'worst case' wind farm scenario

This was one of the questions discussed at the very first meeting of Bergen Wind Academy (BWA), hosted by Norwegian Hull Club on June 21 and 22.

We will hopefully never experience a situation where the absolute worst-case scenario plays out but, in a highly informal poll at BWA, close to 100 participants took part in assessing the probability and severity of possible worst-case scenarios for a floating wind farm.

NEW RISKS
The green-energy transition and the new technology required to make it happen – often utilized in new settings and locations – comes with new risks. Such new risk scenarios require new knowledge and the sharing of such insight. Building and sharing new knowledge has always been at the heart of Norwegian Hull Club and was the motivation behind BWA, which brought together constructors, operators, service providers, insurers and insurance brokers.

KNOWLEDGE SHARING
Over the course of two days, knowledge sharing was in full effect, with topics covered including exposures and underwriting philosophy, insurance covers and conditions, contracts, as well as the contractor’s role and responsibility during construction. Crucially, loss prevention, emergency support and reflection around – and assessment of - worst case scenarios were also on the agenda.

The fictitious floating offshore wind farm project ‘ClubFloat’ provided the basis for presentations, discussions and groupwork. In this way, BWA attendees of all experience levels – from operators to service providers to people in the marine industry who were simply curious - enjoyed relevant knowledge exchange and gained valuable insight into an emerging segment of the marine and energy sector.

Georg Nygaard, Head of Global Energy and Specialty at Norwegian Hull Club, asked attendees: “What is the worst that can happen?” in a presentation featuring exposures and underwriting philosophy. This is a question both he and Norwegian Hull Club have pondered and calculated the risks for for every new project insured by The Club since it started offering covers for floating offshore wind in 2017.

SCENARIOS
Georg presented a range of scenarios that The Club, and the offshore energy insurance market, has identified as possible risks to a floating wind farm. Attendees were asked to consider the risk of and consequences of natural hazards, contact incidents, damages or fire to the ClubFloat offshore substation or its export cables. The likelihood and effects of acts of terrorism were also contemplated.

Attendees suggested the combined risk of probability and severity was highest in relation to damage to - or an error in - the export cable. Although the consequences of terrorism were assumed by the participants to have the highest potential severity, they considered the likelihood of such incidents to be low.

RISK AND CONSEQUENCES
Georg also drew attention to Estimated Maximum Loss (EML), an established term which can be applied to the assessment of the exposure of wind farm projects and fields. EML is evaluated from ‘very pessimistic’ to ‘very optimistic’ when assessing all of the possible worst-case scenarios combined. Equipped with their mobile phones and a digital poll tool, the audience used their recently acquired knowledge to provide their best ‘guesstimate’, quickly assessing the risk and consequences, to evaluate the EML for a random chosen windfarm project.

Just over half of the audience (52.6 per cent) considered the EML to be ‘moderate’, an assessment that the experienced offshore wind underwriters in the room acknowledged.

COMPLEX
An offshore windfarm is complex, with its wind turbines, array cables and export cables, the offshore substation, the onshore substation as well as the transmission onshore. Assessing the combined risk of all these interlinked components requires detailed knowledge about the project in question and its technical specifics. Such details need to be considered alongside factors such as its location, weather conditions, as well as the understanding of the possible worst-case scenario. Added to this, features of the insurance policy, such as limitations and additional covers, impact the exposure.

PRUDENT APPROACH
Together with Vice President for Renewables at Norwegian Hull Club, Bin Wang, Georg revealed how The Club examines these various risks and the highlighted the need for using both scenario-based and formula-based approaches in doing so. The audience learned of The Club’s prudent approach to such new risk scenarios, while also leveraging its extensive experience in traditional marine and energy loss prevention and emergency response.

Along with expert guest speakers from DOF, Odfjell Drilling, Global Maritime, and DNV, Norwegian Hull Club’s own dedicated renewables team continued to share their experiences of risk assessment, contracts and conditions of the floating offshore wind parks over the two days of Bergen Wind Academy.

INSIGHT
Norwegian Hull Club is grateful and happy for the turnout for this event. As an industry, we are much better prepared to handle emerging risks when we cooperate and learn together, gaining insight, discussing challenges and building knowledge.

We would like to thank everyone who attended and looking forward to seeing all of you again at next year's Bergen Wind Academy.