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RKH Specialty Insurance Aspects of Solar PV
Energy Cork Conference
RKH Specialty
Energy Cork Conference
29th January 2016
What do we do…?
RKH Specialty has a specialist team for the placement of Renewable Energy PROJECT SPECIFIC
INSURANCE for the following technologies:
• Onshore Wind Farms
• Large-scale, ground based solar photo voltaic parks – around 10GW currently placed
• Concentrated solar power; both parabolic trough and power towers. In Europe & North Africa
• Hydro electricity plants
RKH Specialty
• Anaerobic digestion, bio gas
• Biomass
• Waste to energy, gasification
• Geothermal
• Wave or tidal marine energy devices
• Cover advice & recommendation
• Policy Placement
• Risk Management Services
• Due Diligence Services
• Dedicated Claims Handling
• Financial Closing Services
• Consultancy Services
Our Experience… We have International experience including Europe, Latin America, USA & Canada.
Our Claims understanding and experience allows us to obtain solutions to indemnify our clients faster.
• Solar Power
� Around 10GW International solar power currently placed on behalf of our clients.
� From single site installations to large multi site portfolios, ranging in sizes, across several continents both ground and roof top based.
� We arrange the insurances for all stages including development, construction and through to operation.
� We have developed an extremely broad Wind Farm Policy Wording, extended where necessary
RKH Specialty
� We have developed an extremely broad Wind Farm Policy Wording, extended where necessary after each financial project close to incorporate any new extensions required.
• Wind Power: � Over 20 years experience placing Wind Farm Insurances.� We have placed the largest Construction Onshore Wind Farm in the US at the time. � Over 20GW placed into global insurance markets.
• Hydro Power:
� We have placed over 300MW into the London Insurance markets.
� Insurance placements for both Dam plants and run of the river projects
Solar Power Experience…
• Since the European Feed-in Tariffs for large-scale, ground based solar was introduced, with falling panel prices, we have experienced a huge increase in installed capacity
• Favored as investments by Pension Funds and Debt Finance Banks.
• Around 10GW International solar power currently placed into the London and European Insurance Market
RKH Specialty
• Commercial scale ground based projects plus residential portfolios and industrial rooftop installations.
• Consolidation of operating portfolios, more attractive to insurers due to economies of scale.
• Claims trends: - Eastern Europe – theft. - UK – Flood. - South America - Hurricane and Storm Damage. - Worldwide – Electrical Transformer and Inverter failures.
Why buy Insurance…
• Made mandatory by debt finance parties under the Finance Agreement!
• Protecting Gross revenue from generation interruption.
• Protecting against Natural Catastrophe events, ‘Force Majeure’.
• Protecting against theft, malicious and accidental damage.
• Protecting against loss of revenue resultant from damage to grid export equipment.
RKH Specialty
• Protecting against Mechanical and Electrical failure (limited exposure with PV).
• Protection against manufacturers defects.
• Peace of Mind – be a prudent operator…..
Key Exposures/ Risk Mitigation…
• Natural Event (Natural Catastrophe events including Earthquake, Peatslide, Flooding,
Tornados, Typhoon, Hurricane)
Have Perils been considered during technology design, particularly the support structures,
are the electrical joints elevated etc.
• Testing and Commissioning Issues
Extent of Manufacturers Warranty/ Service Agreement and Experience of EPC Contractor.
• Malicious Damage
Site Security, minimum requirements of pallisade fencing, CCTV, armed guards (depending
RKH Specialty
Site Security, minimum requirements of pallisade fencing, CCTV, armed guards (depending
on territory!) etc
• Theft
Site Security, particularly storage during installation, are the cables buried etc.
• Weight of Snow
Robust Operation and Maintenance Program and design?
• Single Export Transformers
Level of Service Agreement and availability of spare.
• Electrical failure of transformers and inverters are the main exposure.
• The largest claim in the Renewables market in the last 12 months was a hurricane loss
during the construction of a PV project in Mexico last year at a cost to insurers of EUR
40,000,000.
Strong Risk Management…
• Robust design for relevant exposures at each site.
• Quality and Experience of EPC and O&M Contractors.
• Spare Part Availability and Level of Service Agreement.
• Extent of proven panel durability to aggressive wind speeds.
RKH Specialty
• Good Housekeeping’ – vegetation control.
• Bankability of the manufacturers warranty.
• Export transformer service agreement.
• Ongoing Site Security – review and maintenance.
• Secure storage of equipment for items whilst on site awaiting installation.
Information is key…• Material Damage Replacement Values.
• 12 Month Loss of Revenue estimate.
• Site Location; Longitude and Latitude, post code.
• Equipment used, Equipment record, make and model numbers…
• Warranty Status.
• Detailed Service Agreement and Maintenance Program.
RKH Specialty
• Implemented Security Measures.
• Experience of EPC Contractors.
• Lead Time of Critical Components.
• Spare Parts Held on Site.
• Build Period.
• Proximity of non owned property to the project site.
• Insurance claim history.
• Lease Agreement between rooftop and project owner, where appropriate.
Solar Insurance Market and things to consider…
• Highly Competitive, so many insurers in the solar market driving down premiums.
• Minimal failure rate experienced therefore looked favorably upon by insurers.
• Quality improvements in technology and manufacturing and installation methods.
• Improved availability and lead times for replacement parts.
• Irish market looked upon kindly in order to balance underwriting book due to significantly
RKH Specialty
• Irish market looked upon kindly in order to balance underwriting book due to significantly
less Natural Catastrophe exposures when compared to other parts of the world.
• Defects are rare.
• Robust manufacturers warranties.
- Excess Levels
- Breadth of Cover
- Indemnity periods
- Wrap around Insurances’ to Warranties and EPC contractors insurances.
Solar PV claim in Italy - Example
• Storm Damage to 48MW PV Farm
• Total Paid: EUR 260,000 (for both Property Damage costs and interruption to revenue)
• We appointed a Loss Adjuster from the Italian office of our preferred Loss Adjusters in London who immediately visited the site and offer assistance and commence investigations.
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• We helped to review the documents and evidence to get the matter settle.
• A great result for both insurers and client as the site was then able to get back up and running sooner than anticipated by prompt, pro active action.
• We were also able to negotiate a more favourable deductibles for the client arguing that although the loss occurred during a Hail Storm, the overwhelming majority of the damage was as a result of wind and water damage and that the much higher Hail deductible should not apply.
Claims experience & method
To date in our years assisting clients with their PV plants, we have experience with claims
settlements for losses including:
• Substation failure
• Cable, Panel and Inverter Theft and attempted Theft
• Malicious damage
• Inverter failure
• Storms
• Wind/ Hail Damage
RKH Specialty
• Wind/ Hail Damage
• Lightening Strike – Metallic – Low Landscape
• Flooding
• Landslide
• Fires
• Electrical Breakdown
• Weight of Snow
• Poor Quality Frames for panels
• Hot Spots
Contact Us
Oliver Litterick
Divisional Director
T +44 (0) 207 456 9320
M +44 (0) 79907 33484
E oliver.litterick@rkhspecialty.com
RKH Specialty
RKH Specialty
One Whittington Avenue, London, EC3V 1LE, United KingdomT +44 (0)20 7456 9300 F +44 (0)20 7456 9399 E enquiry@rkhspecialty.com
www.rkhspecialty.com
RKH Specialty is a trading name of R K Harrison Insurance Brokers Limited (RKHIB), which is an appointed representative of R K Harrison Group Limited. R K
Harrison Group Limited is authorised and regulated by the Financial Conduct Authority in respect of general insurance business. RKHIB is registered in
England No. 6720048. Registered Office: 16 Eastcheap, London EC3M 1BD. Calls may be monitored and recorded for quality assurance purposes.
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