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42 July/August 2014 | Renewable Energy Focus
focus:Interview | Travelers Insurance
Managing risk in wind power projects
AT THE recent WINDPOWER 2014 Con-
ference & Exhibition, Renewable Energy
Focus magazine sat down with Travelers’
Scott Foyer, national practice leader, and
Peter Wilcox, technical director, to discuss
the issue of risk management and mitigation. Following
are excerpts of that interview:
REF: What are some of the most critical aspects that plant operators should consider when trying to mitigate risk when executing wind power projects?
Scott Foyer: From a construction
standpoint, the main concern we have
is in the actual erection of the wind
turbines (i.e., making sure the cranes
are able to properly execute the lifts).
Beyond the nacelle and the blades,
you also have the various compo-
nents of the tower — all of which have
to be put in place. If you don’t have a
trained crane operator, then it’s not
going to go well.
You also have to be mindful of the
surrounding conditions. For exam-
ple, if the winds are too high, then you
should wait until it subsides. You also
have to have proper pads in place to
ensure that the crane won’t tip.
All these things are critical in
guarding against losses during the
erection of the turbine.
Peter Wilcox: And with that
there needs to be oversight by a proj-
ect manager over that crane opera-
tor. Although the crane operator may
be certifi ed, we [as an insurer] want
management to be there to make
sure that they shutdown, that they’re
doing the proper inspections, and that
the crane is sitting where it’s sup-
posed to be sitting. Keep in mind that
a crane can tip over if the crane pad
is off by only a foot or so.
Along with the cranes comes the
transportation of those cranes. In the
industry where we see the most losses
is the transportation aspect; there’s a
lot of preparation that goes into mov-
ing the crane. Then, once it’s moved,
you have to worry about the driv-
ers who are hauling the various crane
components. The industry has the
“lift” aspect pretty much nailed down,
but you have to consider all of the
other considerations that go into it.
(You could have 14 trailer loads for the
typical lattice boom crane that’s on the
site.) All the risk management goes to:
Who’s driving the truck and how do
we make sure all of my parts get back
and forth safely between job sites.
Foyer: We’ve actually seen those
types of losses, where the crane is
transiting within pads. When you
have a crane, which is rented in most
cases, time is money so the operators
are trying to move it along between
the pads as quickly as possible in
order to make those lifts. Therein lies
the danger — sometimes if you push it
you can make mistakes.
Wilcox: Beyond the cranes and the
workers, wind farm operators and
developers also need to take ‘quality
controls’ into account. In other words,
taking a closer look at the people
they are hiring to perform those ser-
vices. This all starts with sub-contrac-
tor selection and ensuring that people
understand the specifi cations of how
they’re supposed to be testing the
various systems in place. During our
claim activity, we’re fi nding that peo-
ple are not fully aware of their spe-
cifi c duties and responsibilities when
it comes to the issue of quality control
and testing systems. (You can have
issues such as wire failures under-
ground or problems up-tower, etc.)
It’s about defi ning who’s responsible
and then holding people accountable.
That’s one of the most critical aspects
of risk management.
REF: What are some of the actions that Travelers Insurace Company is taking, in advance of the claims stage, to minimise some of these issues you’re seeing in the fi eld?
Foyer: For starters, we ask for
details about the crane operator, i.e.,
their qualifi cations and experience.
We also ask project managers about
the specifi c controls that they may
or may not have in place on the site.
Travelers also off ers a crane training
class to help clients pass the NCCCO
written exam. The 40-hour class
teaches operators the essentials —
how to read load charts, etc.
Wilcox: We also ask for specifi cs
on sub-contractor selection — i.e., how
Ensuring the cranes are able to properly execute the turbine lifts on the construction site is paramount.
REF0414_Focus_Interview_Travelers 42 07-08-2014 16:02:50
43July/August 2014 | Renewable Energy Focus
Interview
About: Scott Foyer is national practice leader at Travelers; Peter Wilcox serves as the insurance company’s technical director.
did the project manager choose a spe-
cifi c company, whether it’s an electri-
cian or an earth mover, etc. Of course,
you need to look at a sub-contractor’s
resume, but you also have to consider
the contractor’s experience modifi ca-
tion rate to see if workers are being
injured on the site as well as how long
those workers are unable to work as
a result. You also have to look at any
OSHA violations, because these will
give you a ‘snapshot’ in time.
More importantly, it’s good prac-
tice to have the contractor explain
their controls to you during the inter-
view process. So many times I see the
various parties throw safety manuals
back and forth but the problem is, no
one ever really looks at them. It’s not
enough to ask contractors to provide
a written controls program; instead,
have them verbally describe the con-
trols that are in place so that you [the
operator] feel comfortable in knowing
that the contractor fully understands
his own safety program.
Foyer: Going back to the trans-
portation issue, you need to take into
account the movement of all this
heavy, expensive equipment to the
site. A lot of the wind turbine man-
ufacturers [out there] are shipping
in parts to the US from overseas.
When all that equipment arrives in
the States it requires inland transit
and then it must be off -loaded. During
that transit, damage can occur and
this causes delays in the project. That
holds true for the transformer or for
any other critical part of the wind
farm. For us, the critical part is estab-
lishing who is liable for the condition
of the equipment once ownership
changes hands.
In terms of risk mitigation, this
is important in terms of exposure.
Travelers’ policies often cover this.
From a mitigation standpoint, we (the
insurer) want to know who ultimately
has the responsibility.
That’s why it’s so important that the
operator picks the right logistics fi rm,
preferably a company with a lot of
experience in this type of work. They
have the special trailers to transport
the blades to the site. What’s more,
a good transportation company will
conduct a tour to the site prior to the
delivery of the equipment.
For example, you can’t make
90-degree turns if you’re carry-
ing 130-foot blades, so you need to be
familiar with the routes. Transport-
ers have to be so cautious about how
they plan to deliver the equipment to
the site.
REF: From an insurance claims perspective, how does the wind power industry stack up to the other categories or industry sectors?
Wilcox: In the wind industry, it’s
not the frequency of claims as much
as it is the severity of the claims. For
instance, a wind turbine blade dam-
aged by lighting could result in a
$500,000 claim. And that’s just the
damage to the blade itself — not any
loss of income that may have resulted
from the lack of activity.
Foyer: Naturally, when you’re
installing expensive equipment
200 feet in the air — as is the case
with wind turbines — then it becomes
more expensive to fi x, as opposed
to a power-generating plant on the
ground.
REF: What are some of the other ‘exposure’ risks related to construction of the wind turbines?
Foyer: Storage, defi nitely. In most
cases, operators are going to store
much of this equipment prior to
installing it on the job site. There are
exposures hazards due to high winds
(blades are ‘sails,’ after all). That’s
why it’s important to secure the
blades in storage using the shipping
hardware provided.
There’s also the issue of theft of
equipment on the job site — not nec-
essarily the wind turbine blades them-
selves, but the copper and cables
utilised in the installation. They’re
worth a lot of money, and can ‘walk
away’ if not properly secured.
REF: What are the main issues to consider regarding exposures on the operational side?
Foyer: Maintenance becomes an
issue the longer a wind farm is in
operation, especially as some of the
warranties expire on the older sys-
tems. Consequently, if a system is
not properly maintained, then it will
break down and subsequently shut
off the income stream. We’re not only
talking about “preventative” mainte-
nance but also “predictive” mainte-
nance, which comes from condition
monitoring. This allows the owner to
know that there are potential wear
items that require attention. Using
predictive maintenance, the operator
can replace some of those parts prior
to failure. In short, it’s about making
sure you are planning for budgeting,
maintenance and repair.
Wilcox: This approach not only
applies to the turbine, but also the
main power transformer in the sub-
station. The operators should be doing
condition monitoring on those sys-
tems as well, because that’s your pinch
point. If you lose that main trans-
former, then you’re not pushing any
power to the grid — and you’re losing
income.
REF: We’ve been talking primarily about risk mitigation as it pertains to onshore wind farms. What are some of the issues you’re seeing with off shore applications?
Wilcox: Although Travelers does
not insure off shore wind farm proj-
ects, we realise that you have to deal
with some of the same issues. That
being said, with off shore wind farms
being so far out, there’s more of an
emphasis on workers’ compensation
issues, for example: Is there prompt
medical care on site? What kind of
systems do operators have in place to
take care of workers, be it helicopters,
vessels, etc., or trained emergency
medical technicians to take care of
those situations? When you start
building plants in a remote location
— whether it’s on the ocean or on a
mountainside — these are provisions
that have to be in place all the time.
Another thing to consider as an
off shore wind farm ages is: will the
operator be able to get the spare parts
he needs for the turbine? Let’s be hon-
est; there have been some wind tur-
bine companies that have gone out of
business, and it served as a real wake-
up call to some of these owners. Those
successful wind farm operators who
have the appropriate resources will
get through just fi ne. The same can’t
be said for those operators who don’t
keep abreast of the manufacturers
and parts suppliers.
REF0414_Focus_Interview_Travelers 43 07-08-2014 16:02:51