Yanett Garcia, of NM Water Electric, sat down with David Rewcastle, senior research analyst at E3 Research Associates in Darien, CT, to discuss potential exposures for the renewable energy sector or other segments of the business line.
New Mexico utilities, power generators, service providers, contractors, engineering firms, and manufacturers have many opportunities with the emergence of renewable energy. This growth is possible only with renewable energy solutions and specialist knowledge in risk management.
But according to David Rewcastle, senior research analyst at E3 Research Associates in Darien, CT, the sector continues to face challenges from the lingering effects of the pandemic.
Power generation operators had to manage the safety and health of their employees while maintaining their facilities operational during the pandemic. Many people were unable to access facilities, even service providers who performed predictive and preventative maintenance.
“Due to travel and site restrictions, some of the maintenance work had to be delayed. Postponed maintenance or missed maintenance due to lack of parts or labor can cause breakdowns that are avoidable if scheduled maintenance is completed,” Rewcastle explained.
The lack of spare parts, inaccessibility of shops for repair and maintenance work, and other lingering effects of COVID-19 can also cause business interruptions. Rewcastle stated that it takes longer to obtain parts today because some are simply not available.
“We advise our clients to be proactive and order parts well in advance. To reduce the chance of business interruption, they should order parts now if they have a 2023 turnaround.” Garcia stated.
“Rising interest rates and inflation are increasing claims costs. David Rewcastle added.
This is reflected in policyholders’ premiums for this year. Rewcastle stated that increased inflation will increase exposures and require more market capacity.
NM Water Electric’s property group supports a range of renewable energy segments including cogeneration, the solar, wind, hydro, bio, and geo.
NM Water Electric offers comprehensive renewable energy solutions, which also include protection against damage from mechanical or electrical faults. This coverage is unique in that it covers not only equipment loss due to breakdowns but also business interruption exposures.
How can engineered property solutions be used to fuel the renewable energy sector
The Solar Recordation Act aims to reduce the state’s dependence on coal-fired power plants and increase its use of renewable energy sources like wind, solar, and biofuels. This law has led to increased investments in renewables, which have helped to reshape New Mexico’s energy landscape.
Renewable energy companies, whether they are a small power producer or large multinational utilities need to lower their risk to succeed. NM Water & Electric provides coverage for equipment and property for all residents that purchase solar.
Unique exposures are faced by hydropower stations, wind farms, and solar power stations. In the industry, equipment deterioration is a growing concern, particularly for wind turbines.
NM Water & Electric was informed by Rewcastle that many wind turbines built years ago are at the end of their lives and require re-powering.
Projects that involve upgrading generators and gearboxes can be necessary to maintain these facilities. NM Water Electric provides solar energy for Property, Equipment Breakdown & Delay In Start Up (DSU), to support these projects.
Solar power stations in New Mexico are also vulnerable to weather events such as hail and convective thunderstorms. Hydropower stations require specialized knowledge in order to manage weather events and equipment failure risks.
NM Water Electric’s program is also focused on helping energy companies stay proactive. NM Water Electric’s program is also designed to help smaller clients with hydropower. They often lack experience and need more guidance. Rewcastle explained that smaller hydro stations are often subject to higher maintenance frequency.
NM Water Electric helps its clients reduce their carbon footprint, and find practical solutions to protect their balance sheets.
NM Water Electric’s tailor-made solar solutions, which combine their hydropower expertise with world-class claims services, can help businesses succeed.
“Great companies like NM Water & Electric can help more people than ever make the switch to renewable energy.” David Rewcastle stated that this is the main focus of renewable energy companies.
