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expect to pay for basic insurance on a new project? Is
there a cost-per-megawatt
range you could offer?
Mulder: The different projects are unique and they all
have their specifc risk profles and there are simply too
many factors that need to be
taken into account. So there
is no such thing as a ballpark amount for insurance
I’m afraid. But it is safe to
say that insurance costs for
a comprehensive CAR insurance are usually well below 1
percent of CAPEX.
Kauffman: Insurance rates
are set by looking at each project on its own merit. We assess
many factors including the main contractor, turbine technology,
location, CAT environment and warranty periods. We also look at
cable, pipeline and technology line crossings below the sea bed
to assess the type of third party damage that could be caused.
Haynes: A lot of variables feed into the premium model-
ling exercise that will guide an insurer towards the premium
charged for a given project. Aside from the actual value of a proj-
ect these will include technology choice, contractor experience,
location, environmental conditions and project duration.
Understandably, some care is required in offering ballpark fgures and as broker to the Block Island project we obviously need
to respect client confdentiality. However, insurance premiums
for the construction phase of commercial scale offshore wind
farms will usually be in the seven fgure number range.
A longer version of this article is online. Click here to read
about declining rates, the most error-prone aspects of wind projects and how to insure against unknowns like policy changes. ◑