The overall risk of offshore wind assets has reduced significantly in the past decade. This is the result of the industry’s hard work in reducing costs, proving new technologies and developing compelling business. As a result, the industry has grown by over 30GW in the past decade. That growth is expected to accelerate as countries strive to meet net zero targets.
Risks associated with offshore cables, however, seem to be following a different trend. Failures in wind farm array and export cables have been a recurring issue for many years. They incur significant financial costs. Cost include revenue losses from increased downtime, repair work requiring expensive vessels and cable lengths requiring replacement.
Loss adjusters have highlighted that cables represent 40% of the number but 83% of the value of offshore wind insurance claims. This is increasing in premiums for cable insurance and a reducing the cover offered for cable insurance. Both are a concern for insurers and investors.
The causes of cables failures are often unclear. Ørsted did highlight issues with cable protection systems last year but the root cause of most cable faults is hard to determine between manufacturing, installation and operation.
Technological innovations cannot solve these issues on their own. The offshore wind sector needs to examine innovative practices to reduce failures to improve insurer confidence and reduce risk. Progress is already underway to improve data sharing among stakeholders and re-examining standards. It is crucial that these, and other initiatives, find solutions that work for the industry as a whole.
It is important that the challenge of addressing cables failures is looked at as soon as possible. The wind industry is going through significant changes. Offshore wind is emerging in new countries, commercial-scale floating wind farms are starting development and 132kV array cables will be required as turbine ratings increase. Cables failures need to be addressed to make sure the issue does not hold the industry back.