What brought you to the renewables area?
At a very young age, I understood there was a central place where power was produced. When I began my career, I had a lot of training with different types of power plants. But early on, I was drawn to the idea of making my own on-site power, which is what we call distributed generation today. In fact, in 2013, my wife and I purchased an off-grid property, and I developed and built a photovoltaic (PV) solar power system for it. Whenever there was an opportunity to work in renewables, I was there.
Your educational background is in mechanical engineering. Yet your career has been an interplay between this and loss control. How do these two disciplines support one another?
At AEGIS, we specialize in insuring utilities. To do that at the highest level, you must understand exactly how a power plant operates, and be able to communicate the technical details to engineers and management. In a nutshell, you can’t reduce risk if you don’t intimately understand how that power plant works.
What are the leading types of renewable energy in North America today? What has evolved over the last decade in the renewable sector, including the distinct set of loss trends associated with it?
Wind, PV solar, and hydro are the leading types of renewable energy. The use of battery energy storage systems (BESS) is evolving as well, particularly in conjunction with wind and solar sites. Wind has evolved the most over the last decade, and the loss trends associated with it are unique. For example, the blade — from its engineering to how it is manufactured — is, in a word, complicated. So any loss associated with the blade is a specialty unto itself. A second loss trend is lightning, which can strike the tip of the blade and destroy it. To that end, it’s critical that lightning energy remains isolated from the wind turbine electrical generating and control components and that it’s given a safe path to ground.
The Renewables Working Group is one of four working groups within AEGIS Loss Control Property Operations. How does this group deepen areas of expertise within AEGIS to better support the critical needs of AEGIS members? And what are some of the issues affecting members regarding the shift to renewables?
AEGIS handpicks employees with the expertise needed for each working group. This allows us to dive into the subject, learn as much as possible and pass along information internally and to our members. The entire energy industry is moving toward renewables. As we make that shift, one of the most important issues for members is the cost to install. PV and wind are now competing with fossil fuel generation in terms of cost/MW for construction. Next are the market pressures to adopt one form of renewable energy over another. A third issue is maintenance costs. PV and wind have lower staffing and maintenance requirements compared to fossil fuel generation. As a result, wind accounts for close to 40 percent of all new commercial utility generation. This increase in the number of renewable assets challenges insurers to understand key design and maintenance elements in order to rate the risk.
Let’s discuss your role as the leader of the Renewables Working Group. What drew you to this role?
It was the opportunity to marry my passion with my vocation. It’s pretty special to lead this group — to take this expertise, organize it and create a resource for the membership and AEGIS. For example, we identify and quantify risks in wind and solar, and work to improve our risk assessments and templates to give a more comprehensive accounting of the insured asset. Developing that in-depth understanding of these assets and this engineering expertise is what differentiates AEGIS Loss Control from others.
Tell us about the full slate of AEGIS property loss control products specifically designed for renewables.
We perform risk assessments on renewable assets and provide advice to members and potential members. This can include property risk assessments, which focus on fire and other related perils; machinery risk assessments, which look at the potential for machinery breakdown; and builders risk assessments, which evaluate construction risk. We offer Focused Services® engagements for renewables as well, which can be tailored to our members’ needs.
Can you tell us about the recent evolution of AEGIS risk assessments and how this adds value to the membership?
We have completely transformed our risk assessment templates, removing what we feel didn’t move the dial and refocusing on areas that we think are vital based on industry experience. We conduct a comprehensive accounting at each wind farm or solar facility to better identify risks associated with wind and solar.
Regarding renewables and their inspections: In the last 5 years, AEGIS conducted more than 550 assessments of solar facilities, wind farms and hydroelectric plants. In the last 10 years, AEGIS performed just shy of 1,000 assessments of these facilities. How noteworthy are these statistics related to AEGIS in particular and the industry in general?
It’s a significant portion of our inspections. The renewable sector has almost quadrupled in size in the last decade, and the number of risk assessments we conduct has increased along with it. Everything is driven by and designed for our members.
Since the beginning of the COVID-19 pandemic, demand for wind power has reached an all-time high. Yet this is in the face of issues with manufacturing, the supply chain, acceptance testing, operations and maintenance. How have you helped members navigate through this uncertain time?
We’ve remained in close contact with our members, collected feedback and produced an issue of the new Loss Control publication called Quick Tips, which covered how the pandemic is affecting the renewable sector. Our goal is to provide information that is as current as possible. The common thread during the pandemic has been the human factor. So whether it’s a blade manufacturer that’s shut down because employees are sick or the government that’s shut down the country to curb person-to-person transmission, it’s the human factor. We shouldn’t lose sight of that.
What are you most proud to be a part of at AEGIS?
I am honored and flattered to be part of the AEGIS Loss Control Group. It’s the expertise, the intelligence, the professionalism of my colleagues that I value most. I am humbled by these people and the collective knowledge we have access to every day.
When you look ahead, what are some ideas you’d like to bring to members? For instance, what are your goals connected to the growing wind energy market? The solar market?
As the industry evolves and matures, our focus is on providing the most current information to help educate our members and serve as a resource for them. These include topics such as design, risks and losses associated with natural catastrophes, geographic location concerns and model practices. In addition, AEGIS has been performing risk assessments for renewables for more than 10 years, and we plan to increase the number of assessments annually. We have also been a part of the design review and risk assessments for energy storage projects, which include various technologies such as lithium ion batteries. Many of the renewable sites are either adding energy storage facilities or including them in the design, so we are working with our Energy Storage Working Group to address the related issues that members are facing.
We are actively involved in the codes and standards-making processes that apply to the facility types we insure, including both the renewable and energy storage industries. With renewables, we have on staff several past principal members and the current chair of NFPA 850, Recommended Practice for Fire Protection for Electric Generating Plants and High Voltage Direct Current Converter Stations, as well as NFPA 853, Standard for the Installation of Stationary Fuel Cell Power Systems. We also actively support, participate in and present at industry organizations such as the EEI Fire Protection Committee. This committee is currently very focused on the development of NFPA 855, Standard for the Installation of Stationary Energy Storage Systems. Through our involvement with groups like these, we will remain on the forefront of developments in the evolving renewable and energy storage markets.
What trends do you see in the solar and wind markets as they pertain to energy storage systems?
Battery energy storage systems are commonly coupled to solar and wind assets to maximize their benefits. For example, a challenge with solar on a small grid is that when it’s cloudy, you lose 30 to 40 percent of your power. A BESS can immediately respond to that. The same applies to wind, although wind doesn’t typically change as dramatically as solar does. Also, we see singular installations of a BESS where it is placed at the end of a distribution power line for voltage support.