The winds of change in the wind power industry

At the Third European Wind Turbine Committee meeting advancing technology and difficult locations were just some of the issues highlighted as the main challenges facing the wind power sector.

The wind power sector is the fastest growing electricity generation technology. The level of annual installed capacity has grown at an average rate of over 27 percent per year for the past five years.

In 2010, over 300 new offshore fully grid connected wind turbines were erected at cost of EUR 2.6 billion. This represents an 883 MW energy output and a 51 percent increase compared to the previous year.

The rapid advancement of both the technology and the increasingly challenging locations and weather conditions in which wind turbines are constructed brings with them new risks.

It is in this demanding setting that the Third European Wind Turbine Committee convened 31 January – 1 February 2011. Twenty-six participants representing the leading re/insurance companies in the wind power segment met at the Swiss Re Centre for Global Dialogue in Rüschlikon to discuss the issue.

 “Manufacturers of wind turbines are facing a high pressure to reduce their production cost in order for wind power projects to become economically viable  and ultimately true alternatives to conventional power generation technologies without reliance on government subsidies, “ says Swiss Re’s Guido Benz, Head Industry Practice Engineering and Construction,  Corporate Solutions.

“This spurs a trend towards larger capacities per wind turbine with a view to reduce specific electricity production cost for the wind park owners and is one of several reasons for the shift towards offshore windfarms - particularly in Europe - where generally more stable and higher average wind conditions are prevailing.”

Benz says that from an insurers’ point of view, the trend to larger capacities brings about challenges in terms of prototypical technology and its insurability.

The European Wind Turbine Committee was launched in 2009 and has been chaired by Swiss Re since its inception. It has now more than 30 registered members, providing an optimal platform to openly discuss among industry representatives technology issues associated with this type of risk and to create awareness as to the challenges at stake.

Published 14 March 2011

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