Navigating the Insurance Landscape for Offshore Wind Farm Development

Wind Power's Growing Contribution to U.S. Energy Generation

In January 2019, wind power accounted for about 7 percent of net energy generation in the United States. While that doesn’t sound like much, wind power has been a significant contributor to new electricity generation over the past few years (though natural gas still leads the pack).

The Complexity and Risks of Offshore Wind Operations

While most wind farms are onshore, wind farms on large lakes and oceans are becoming increasingly popular. Most notably, offshore wind speeds are much faster and steadier than on land. The U.S. Department of Energy estimates that wind off U.S. coasts offers a technical resource potential of about 7,200 terawatt-hours of electricity generation per year – which basically translates to double the country’s current electricity use. Even if just 1 percent of this potential is tapped into, that can end up powering nearly 6.5 million homes.

Insurance Solutions for Offshore Wind Farm Development

Constructing and operating an offshore wind turbine is no stroll on the beach. Start-up costs can be significant (though they have been declining rapidly). And many pieces – both literal and logistical – need to come together before a wind farm can start generating electricity: transporting the towers and blades out to sea on specialized vessels; sinking foundations into the ocean or lake floor; constructing onshore and offshore power substations; laying cable between the turbine and the land. Plus, there’s Mother Nature to reckon with, like hurricanes and lightning strikes (a very common danger facing wind turbines, unsurprisingly).