Offshore wind: sustainable power for Asia
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Asia will lead the global growth of power generation from offshore wind farms. Over the last decade, installed offshore windfarms capacity globally grew by 28% annually, and by 58% in Asia, according to data from the Global Wind Energy Council. Total installed capacity in the region is projected to increase eight-fold by 2030. Offshore farms span from the northeast of mainland China to the sea of Japan and southern Vietnam. Mainland China is the leading market in the region, and also globally.
Offshore wind farms are exposed to many risks during construction and operation. These include damage and potential downtime caused by natural catastrophe events and human error etc. Offshore turbines are also at risk of component failure due to the strong winds, high moisture, and harsh conditions, more so than land-based turbines. A current trend is for offshore projects to be developed further from shore. Among other complexities, this can increase the costs and duration of repair as vessels need to be charted at relatively high rates and may not always be immediately available.
All offshore wind energy projects can lead to large financial losses for partaking stakeholders. Insurance coverage such as contractorsʼ all risk, delay in start-up, construction liability, marine insurance, property damage and business interruption can provide financial compensation when such losses occur. We estimate that total premiums emanating from Asiaʼs offshore wind energy projects will grow by a compound annual growth rate (CAGR) of 16% between 2020 and 2030.
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