Managing Risks for Offshore Wind Applications

Managing Risks for Offshore Wind Applications

 In this article we look at some of the issues related to the use of monopiles for deep-water (x60m) offshore wind farms. The experience from use of jacket foundations at these water depths can partially be translated from the Oil and Gas industry. The unique loading pattern is, however, significantly different.

 Wind, waves, and current will affect the substructure. The topside load on a platform is static, howeverthe loading pattern that comes from the interaction of the WTG rotor creates a very different kind of lateral effect on the whole structure, adding complexity and challenges as wind farms move further out into deeper (x60m) waters. Uncertainties in design are difficult to address at this stage with an industry learning curve for deep-water applications expected. The risk of failures can however be reduced, by an increased effort to monitor quality of workmanship and fabrication, construction, and installation. This is in both owner and insurer interest, and focus should be on knowledge transfer in the industry.

 Current global trends are moving towards WTGs of 15 MW+ in capacity by 2024, with wind farms beginning to be developed further offshore in increasing water depths. Fixed foundations still have a significant advantage at this time, in terms of much lower LCOE compared to floating and will likely be the foundation of choice until the price for floating reduces to similar levels. Currently, only 16% of the global offshore wind project pipeline is floating wind.

 Total Insured Values (TIVs) and loss estimations are increasing inline with growing project sizes. A single loss of a WTG or structure 120km offshore could lead to a property loss of anywhere from 15-50M$ (About $11 million – $37 million), together with a business interruption in the range of $1.6M to $5M, pending actual lead time (6-18 months) and weather and other factors influencing the replacement / repair work. As an example, a loss 10 years ago of 1-2M$ (About $745,000 – $1.5 million), could now be 10-15 times higher, with the same (or potentially higher) loss frequency.

 Monopile foundations account for 63% of the worldwide installed capacity. These have typically been a maximum of 6-7m in diameter and 60m in length. With the planning of wind farms moving from transitional waters (30-60m) to deep waters (x60m) and with WTGs getting larger (rotor diameter x200m), the size of these monopiles will significantly increase, and the structural behavior will significantly change. 

 How will these giant structures respond to the effects of wind, waves and current over time?

 With increased diameters and lengths, the risk of monopile buckling both during the installation andoperational phase is currently being studied in a joint industry initiative called VERBATIM, with results expected to be available to the industry by Q1 2023.

 Further potential issues are related to local scouring effects of the monopile. The change in flow pattern around the monopile near the seabed creates a situation where the bed is “worn out” with time, changing the dynamics of the monopile itself. This can, in a worst case scenario, lead to premature failures of the structure. Scour protection is part of the design process and has been studied since the 1950s, but its effectiveness in deep waters for monopiles is yet to be proven.

 Given all these uncertainties, the use of monopiles in deep waters could to some extent be viewed as an unproven technology (e.g., for a new gas turbine model this would be eight thousand hours of service without any issues). In translation, these deep-water fixed foundations have little real-world experience for this kind of application and will be met with doubt until they are proven to be stable and able to resist all sorts of degradation.

 Offshore wind claims experiences

 Offshore wind related claims are growing in both frequency and severity, which was to some extent expected as the market grows in both size and complexity.

 Contractor errors and equipment defects have been reported by one of the leading insurers, GCube, asthe largest root cause of claims up to date, while claims related to subsea cables are most frequent (30%), followed by gearbox damage (15%) and damage to the transformer or foundation (jacket or monopile) both at roughly 10%. The subsea cables are responsible for approximately 55% of the claimed losses while foundation damage accounts for a further 23%.

When wind farms are moving from transitional to deep waters, another element of uncertainty will be added to the equation, namely the structural response over time of the monopile foundations. The load transferred from the topside structure, in this case a tower and nacelle/rotor, will generate lateral loading from the WTG movement. This is significantly different from the static the load coming from e.g., an offshore process platform or a substation.

 How will the loading effects from both deep waters (current, waves) and the now potentially very large (15 MW) turbines play out over time?

 Measures to reduce risk.

 The largest cause of claims between 2010 and 2020 was as previously mentioned related to contractorerrors and equipment defects. In the quest for reduction of LCOE, quality control and assurance could suffer, leading to potential immediate and long term problems, higher premiums and potentially increasing number of claims.

 One way to address these issues is to apply stricter quality control measures through all stages of the project (fabrication, construction/installation and operation). Quality control engineers should have full access to the fabrication site at all times. Spot checks should be completed by the Lenders and Owners representatives, as well as representatives from the insurance industry. It is in both the insurers, and the insured’s interest to keep the cost of risk transfer as low as possible. This can only be accomplished with full technical transparency over the entire project lifecycle.

 The majority of claims for the largest reported category; subsea cables, can be attributed to contractor errors. This is worrying, given the exponential growth of the offshore wind industry and the likely addition of new and less experienced contractors entering the market. It becomes even more important for the project owners that the quality of the works if being followed and monitored. Industry claims of experience and knowledge needs to be translated into development of methodologies for avoiding recurrent issues.

 Real-time monitoring of movement (vibration, displacement) and structural stresses (strain) will become even more important as the projects move further offshore. Data is needed for maintenance and inspection planning, as well as to prove to the insurance industry that these kinds of foundations can be reliable over time.

So, what now?

What can be done to reduce the risk, and how should project owners position themselves to best tackle these challenges? Industry experience has shown that measures need to be taken in order break the current trend and tackle the upcoming deep-water challenges. There are several key actions should be considered:

  • Involve insurance carriers or brokers risk engineering in early stages of the project.
  • Don’t let overall cost drive all decisions – robust engineering and a proven and reliable track record should be on top of the list.
  • In the absence of track record – increase the scope of the Quality Control program starting at the fabrication phase, with involvement of Brokers Risk Engineering/Insurance carriers.

Ensure that you are covered with offshore risk insurance, contact Thailand Insurane Services today and we will answer any questions and steer you towards making informed insurance purchase decisions.