Indemnity Against Wind-Turbine Fires: An Estimate of the Cost of Overcoming Information Asymmetry

Abstract

Individual wind energy generators and entire wind farms have grown larger in recent times; the larger among the machines are less easily accessible for preventive and corrective maintenance. A large proportion of wind farm assets remain uninsured against fire damage and insurance companies need to come up with effective mechanisms to elicit information relating to the fire risks faced by the underlying assets and then to design and deploy the means to absorbing and diversifying such risks. The present paper offers suggestions to acquire information to bridge the apparent information asymmetry and to defray the associated risks more efficiently.

Notes

1 For instance, SkyFuel, manufacturer of solar thermal—parabolic trough collectors, had structured a warranty which was supported by an insurance undertaking from MunichRE, guaranteeing the thermal output of the SkyTrough solar thermal system for up to five years, and guaranteeing the specified specular reflectance for up to 20 years (CSP 2012).

Additional information

Notes on contributors

Sunderasan Srinivasan

Sunderasan Srinivasan is a Life Member of the Solar Energy Society of India, a Member of the Institution of Engineers, India, and an Economist with Verdurous Solutions (www.verdurous.in), an investment advisory and management consultancy focused on Clean Energy Economics and Environmental Finance and project and investment portfolio management for climate–friendly initiatives. He has been awarded a Doctoral Degree in Business Economics by the University of Vienna, Austria, for his work on the Renewable Energy Industry and Markets. He has also undertaken graduate course work in Economics at the University of Vienna. His first degree is in Civil Engineering and has been awarded a Masters’ Degree in Business Administration by King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia. He has completed a graduate program Architecture, and has acquired graduate qualification in Environmental Law at the National Law School University of India, Bangalore and has been attending online course-work on various aspects of Jurisprudence, Market Mechanisms and Contracts on Harvard X.

Roshini Josepherson

Roshini Josepherson possesses experience in Financial Management, Accounting and General Administration having been associated with both not-for-profit as well as for-profit organizations. At Verdurous Solutions, she works on project viability assessments, financial model development/validation, and on return computations and asset valuations. Her research interests include viability assessments of energy efficiency (EE) investments, cost structures of renewable energy (RE) project and program implementation, energy time-shifting and cleaner transportation solutions. She has qualified as a Certified Practising Accountant (CPA) from Australia, and holds a Post Graduate Diploma in Management (PGDM: equivalent to an MBA) with a dual-specialization covering Finance and Marketing. Her first degree is in Commerce.