United Kingdom

United Kingdom

Poor oversight leading to cable losses, warns GCube

Weak governance the source of many insurance claims

Financial losses faced by offshore wind developers due to inter-array cable failures remain a frequent problem and are often caused by poor project management, according to GCube’s head of offshore underwriting, Jatin Sharma.

Citing a single construction project that experienced five cable losses in the space of six months, Sharma believes many recent losses have been the result of "a lack of governance over cable installation". Sharma made the comments earlier this week at the Wind Power Forum on contract risk management for offshore wind construction in London.

In the early days of UK offshore wind construction, many inter-array cable failures were due to installers using vessels that had originally been designed for telecommunications cable laying and that were not up to the job, says Sharma. As installers gained experience, they improved their fleets by investing in more robust vessels capable of installing a larger number of cables per project.

The primary reason for cable-related losses shifted during the 2005-2010 period and were caused by cost-cutting, said Sharma. An "obsession with cost reduction" prompted some developers to award contracts on the basis of price alone. "You get what you pay for," he said.

More recently, losses have often been caused by mistakes that could have been prevented if developers had maintained better oversight over suppliers and over the cable installation process as a whole, argued Sharma. Risk reduction during cable installation is "being left to cable procurement managers, but few can stay on top of everything – suppliers, sub-contractors and changes to plan".

GCube has provided insurance for 34 offshore wind farms, with its clients including Vattenfall, RWE and Centrica. Its only claim-free offshore wind project to date has been Vattenfall’s 150MW Ormonde wind farm, which Sharma describes as having bucked the industry trend by being built more or less to budget and on schedule.

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