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Low wind ‘tops’ onshore risks; GCube report highlights threat of lack of resources for projects
Credit: 23/05/2017 | renews.biz ~~
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Low wind speed or resource risk is now the most pressing threat faced by onshore wind farm developers, owners and operators globally, according to a new report by GCube Underwriting.
The report – ‘Risky Business: Assessing Future Threats in Onshore Wind Development, Financing and Operations’ – said low wind speeds are negatively affecting the ability of projects to deliver the output forecast prior to construction.
“The inability to effectively transfer weather risk has led to numerous, high-profile examples of sub-par project performance, directly cited in the financial results of major utilities and portfolio owners, and manifested in damaging ratings downgrades,” GCube said.
The renewable energy underwriter predicts that resource risk will remain the most pressing concern in the wind energy sector for a number of years.
It added that resource risk will drive the market for revenue protection mechanisms, such as weather risk transfer and proxy revenue swaps.
Mechanical and electrical breakdown is also a major risk for onshore wind, with the increasing size and capacity of new technologies, and more projects moving into the post-warranty phases in Europe and the US.
“Developers and asset owners must therefore maintain a strong focus on project maintenance and technical risk management procedure,” GCube said.
After resource risk and mechanical breakdown, GCube ranks political and regulatory risk, project development in remote locations and extreme weather as the third, fourth and fifth most prominent threats to onshore wind farms in the report.
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