Improving offshore wind submarine export cable reliability

The offshore wind sector is thriving around the world with the UK aiming to reach the ambitious goal of 50 GW of offshore wind capacity by 2030.¹ At the heart of this green energy revolution are submarine export power cables— critical infrastructure that enables the vital green energy produced by offshore wind farms to reach the onshore power grid.
 

However, fixing issues resulting from cable failures requires significant investment - repairs are costly and time-consuming and can often leading to insurance claims. A large proportion of cable-related claims come from loss of revenue due to the time it takes to identify and repair the cable fault offshore.
 

This challenge presents an opportunity for the insurance sector to play a proactive role in improving cable reliability and reducing downtime.
 

Bridging the gap between warranty and insurance

The interface between offshore cable warranty and insurance is a critical aspect of risk management in export cables. While manufacturers typically offer warranties covering material or workmanship defects for up to five years, these don't extend to issues arising from installation errors, third-party damage or environmental impacts.
 

This is where insurance products - such as Construction or Erection All Risks (CAR/EAR) and Operational All Risks (OAR) – can bridge the gap, offering protection against a broader range of risks. Clear delineation between warranty responsibilities and insured risks is essential to avoid coverage disputes and help to ensure prompt resolution in the event of a failure.
 

Effective coordination between cable suppliers, insurers and project stakeholders is necessary to align terms, exclusions and claims processes - ultimately safeguarding project continuity and financial viability.
 

A call for industry-wide collaboration

Insurers have a pivotal role to play in fostering greater transparency and data sharing around cable failures. By encouraging operators to share insights, the industry can develop best practice guidance for reducing the time for export power cable fault diagnosis and repair.
 

Risk management specialists are well-positioned to support the development of a common framework. For example, with helping to assess offshore power cable reliability, identifying key risk factors and modelling potential loss scenarios. This would enable the industry to work from an agreed baseline, providing a degree of risk stability and consensus for customers insuring offshore wind assets.
 

Our research project

Aviva has taken the lead with this proposed approach by launching a SUPERGEN PhD research project, partnering with McGill and Partners in addition to the Offshore Renewables Energy Catapult. The goal is to create a framework within offshore wind risk management and to support insurers to better understand the risks posed by this renewable energy technology, in particular those related to submarine power export cables.
 

^{1 Essential reforms to pave the way for clean power by 2030}