Product Overview

Renewable Energy Solutions

Global demand for electricity combined with the desire to reduce CO2 emissions has increased interest in renewable energy technologies. With government targets in the UK of 15% energy consumption from renewable sources by 2020, investment in this sector is set to rise. These developing technologies bring with them the need for specialist insurance solutions. Which is why HSB Engineering Insurance, as part of Munich Re, recognise the importance of providing the right insurance covers to protect renewable energy investments.

Renewable Energy Solutions fromHSB Engineering Insurance

HSB Engineering Insurance has developed a range of construction and operational policies to meet the needs of those investing in renewable energy technologies, covering Wind turbines, Photovoltaic installations, Biomass and Anaerobic digestion plants and Hydroelectric plants.

Specifically designed with the renewable energy customer in mind, the focus of our covers is on minimising the disruption caused by damage to renewable energy installations.

Our policies cover physical damage, including breakdown and business interruption, during the construction and operational phases of a project. Cover is available for risks throughout Europe and Australasia and we can also provide inspection services, as part of the package, within the UK and Ireland.

Construction/Installation Insurance

Our renewable energy construction and installation insurance provides the following cover options:

− Erection All Risks cover during installation and maintenance period − Delay in Start-Up cover − Own or Hired In Plant covers − Public Liability cover during erection − Terrorism

Operational Risks InsuranceOur renewable energy operational risks insurance provides the following cover options:

− Operational All Risks cover including breakdown − Loss of Revenue cover − Terrorism − Inspection services

We have also developed Micro Wind and Micro PV insurance policies to meet the operational needs of smaller renewable energy investors.

Why chooseHSB Engineering Insurance?

HSB Engineering Insurance is a leading specialist provider of engineering insurance and inspection services.

Our underwriters and risk engineers have extensive experience in providing insurance cover for renewable energies and are recognised as experts in this field. Drawing on our vast expertise in the renewable energy sector we are able to provide insurance products to suit the varied needsof renewable energy producers.

− Policy wordings specifically designed with the renewable energy customer in mind · Equipment breakdown cover provided as standard · Loss of Revenue covers available on all policies · A broad definition of property wording including substa-tions, transformers, civil works, and rented buildings and their contents

− Extensive underwriting expertise in renewable energy technologies − Cover available across the UK, Europe and Australasia − Access to experienced renewable energy Risk Engineers − Access to claims handlers and loss adjusters with specialist knowledge of the renewable energy industry − Inspection services, to comply with regulatory obligations, are available in the UK and Ireland through our engineer surveyor field force

This document provides an overview of the insurance products available. For full terms and conditions, please refer to the relevant policy wording or contact your local HSB office for more information.

Feed In Tariffs

Many governments across the world have introduced feedin tariffs (FITs) as a means to encourage investment in renewable energies. These typically guarantee generation rates for small scale renewable projects for periods of 15 to 25 years with investors in renewable energy benefiting in three ways:

− Generation tariff - a guaranteed rate for all electricity generated − Export tariff - payment by electricity companies for electricity exported to the grid − Energy saving - reduced electricity bills from utilising electricity generated

The introduction of FITs has resulted in a significant reduction in payback times for renewable energy investments making them an attractive and viable option for many landowners, commercial operations, community groups and homeowners.

Photovoltaic

Photovoltaic (PV) production turns solar radiation directly into electrical current. Since 2002 the interest in this renewable energy source has been increasing rapidly, making it one of the world‘s fastest growing energy technologies.

Like all renewable energy technologies there are significant risks which can impact and result in a loss. The most common causes of loss or damage to PV installations are:

− Theft or attempted theft of panels − Damage from weather events such as windstorm or hail − Impact damage − Failure of trackers − Failure of substation/electrical equipment − Fire

HSB Engineering Insurance provides cover for PV installations that are not only ground mounted but also fitted to the roofs or walls of buildings.

Wind

Wind power has been harnessed by man for thousands of years and is now the fastest growing energy source worldwide. With the largest wind resource potential in Europe, the UK‘s 3000 plus wind turbines account for around 2.6% of energy requirements at present with significant growth expected over the next few years.

HSB Engineering Insurance has vast experience of insuring wind turbine risks. Our onshore wind farm insurance covers are designed to meet the unique risk exposures that wind turbines present:

− Windstorm or lightning damage to blades − Failure of gearbox or generator − Fire in the turbine nacelle − Fire/explosion of substation transformer − Failure of windings

HSB Engineering Insurance provides construction and operational covers for wind energy risks ranging from microwind turbines to large windfarm developments.

Turbine blade shattered by lightning

During a storm, lightning struck the blade of the turbine causing it to shatter. As a result of the damage the wind turbine was unable to export electricity to the wind park transformer for onward exportation to the grid. HSB were able to source a spare blade and arrange carriage thereby limiting the period the wind turbine was inoperable.

Type of Equipment: Wind Turbine GeneratorAge of Equipment: 2 years old

Total claim paid: £52,024 property damage £11,547 loss of revenue

Strong winds damage PV panels

Due to a failure in a tracker orientation system the PV panels at the site were unable to fully turn themselves over into the defensive position to provide protection from strong winds and hail. The failure resulted in the panels being vulnerableto extreme weather and the associated cost of damage was payable under the policy.

Type of Equipment: Ground Mounted Photovoltaic PanelsAge of Equipment: 1 year old

Total claim paid: £23,254 material damage

Biomass/Anaerobic Digestion

Biomass is an increasingly important energy source and now accounts for over 20% of renewable energy production in the UK. The process uses organic material such as wood pellets, crops, animal slurries and sewage as energy sources to produce heat or electricity. With high levels of investment required to cover construction and operational costs, managing biomass risks has become increasingly important.

There are a number of processes which can be used to convert the material into energy sources. Anaerobic digestion uses bacteria to break down organic material to produce methane. Pyrolysis and wood gasification use heat and pressure, in an oxygen free environment, to produce biogas from carbon rich material. These processes produce particular risk exposures such as:

− Fire − Explosion of boilers or pressure vessels − Breakdown/failure of gas engines or steam turbines − Spontaneous combustion of fuel stock

HSB Engineering Insurance provides installation and operational covers for a wide range of biomass technologies.

Hydroelectric

The combination of water and gravity have been used as a power source since ancient times and to produce electricity since the late 19th century. Guaranteed generation rates and reduced payback times resulting from the introduction of FITs has seen renewed interest in small hydroelectric projects asa renewable energy source.

Particular risks applying to hydroelectric projects include:

− Failure of water turbine − Damage from water surges − Water hammer effect

HSB Engineering Insurance provide construction and operational covers for a range of small hydroelectric installations.

Failure of refractory wall caused fire

A failure of the refractory wall resulted in a build up of wood pellets. These caught fire causing the boiler floor support to warp and collapse.

Type of Equipment: Biomass Boiler fuelled by wood pelletsAge of Equipment: 2 years old

Total claim paid: £27,500 material damage £13,750 loss of revenue

Bearing failure causes damage

During operation of the plant a bearing failed causing damage to the turbine rotor and drive end bearing. In addition to the material damage aspect of the loss the insured also incurreda downtime period of approximately 17 weeks with the associated costs. Much of the business interruption costs were recoverable under the policy.

Type of Equipment: HydroelectricAge of Equipment: 9 years old

Total claim paid: £15,675 material damage £40,000 loss of revenue

HSB Engineering Insurance Limited Registered in England and Wales: 02396114, New London House, 6 London Street, London EC3R 7LP. Registered as a branch in Ireland: 906020. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

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