A new option from renewable energy underwriter GCube aims to protect wind farm owners and operators against intermittency.
GCube's Weather Risk Transfer is an insurance premium that is paid regularly by the buyer to guarantee compensation should the wind resource fall below a pre-agreed threshold. Conversely, the policy can be structured so that GCube would pay the buyer compensation if wind falls below the threshold, with the buyer paying GCube if the wind resource is above the usual levels – the rationale being that the buyer would accept a slightly lower upside in order to better mitigate the risk of underperformance.
The insurance option is particularly noteworthy this year, as a number of recent high-profile anomalies in established wind and hydroelectric markets have raised industry awareness. In the U.S. wind industry, many wind operators experienced significant generation shortfalls, a phenomenon that is expected to continue throughout the year.
The policy is available for both wind energy and hydroelectric sectors, notes GCube.
