Insurance protects you in case of an accident, but won’t pay for mechanical breakdowns. Adding a Ventus Turbine Warranty Plus plan gives you additional protection against breakdowns and the cost and stress that comes with them. With Ventus Insurance + Ventus Turbine Warranty Plus, you truly have total protection.
When Do I Need Ventus?
When the manufacturer’s warranty of Wind Turbine Generator (WTG) is about to run out or has run out, you’re responsible for any electrical and mechanical breakdowns that WTG incurs. That can lead to big expenses for the repairs. Ventus can shield you from those high costs with a Ventus Turbine Warranty Plus protection plan that will pay for parts, labor, one crane visit and reasonable costs of travel, including any overnight stay required spent on your behalf by your Operations & Maintenance company to repair your turbine.
Most of the new Wind Turbine Generators (WTGs) purchased these days come with a warranty - this is an agreement between the manufacturer and the customer that should anything break, malfunction, or otherwise go wrong with the WTG within a certain period of time, then the manufacturer will repair or replace the component at no cost to the customer. A typical warranty will depend on the type of wind turbine that you have installed and can be anything from 2 to 10 years.
In addition, most manufacturers offer a guarantee that the turbine will be available to produce power 95% of the time (availability guarantee), and will achieve 98% of its projected power curve (power curve guarantee). Any failures to achieve these benchmarks result in the manufacturer reimbursing the turbine owner for the revenue lost.
As the warranty expiration date of a WTGs approaches, there are several options that the wind farm owner/operator can consider the following options:
- Balance sheet finance: assume responsibility for 100% of the costs and losses resulting from warranty related incidents. Keep in mind that the true cost of a warranty occurrence is the combination of costs associated with securing the effected turbine, obtaining and shipping the replacement part, hiring and transporting the repair equipment, providing the labor for repairs, and assuming the lost income and production tax credits, if applicable.
Rely on property insurance: Wind farm owners who choose to forgo extended warranty coverage believing their property insurance coverage will respond to a warranty claim are likely to be surprised when that claim is denied.
There are too many gray areas that leave projects exposed and put lenders and investors at risk. Here are some of the major differences between property policy coverage and warranty policy coverage. Property forms provide coverage for the peril of mechanical and electrical breakdown if the failure is sudden and accidental and subject to exclusions and limitations. Coverage is typically excluded under a property policy for the following:
- Defects or faults in material, workmanship, or design: As an example, blades are cracking due to faulty materials or bolts are not fastened properly during construction and nacelle falls off tower.
- Wear and tear: Cable brackets are failing due to a repetitive movement over a long period of time and the cables are splitting and arcing.
- Gradual deterioration: Bearings are grinding over a long period of time, which causes your gearboxes to fail.
- Inherent vice: There are hidden defects in the equipment or materials that cause deterioration and/or damage.
- Latent defects: There are hidden defects in material and/or workmanship not discoverable through general inspection.
- Serial losses have limited coverage under a property insurance policy: Development of a defect in equipment indemnity would be: first item 100%; second item 75%; third item 50%; fourth item 25%; subsequent 0%.
- Purchase extended warranty from the OEM: extended warranties might be available in several forms from the OEMs. Depending upon who the wind farm operators are, the quantities of turbines with expiring warranties and the locations, the warranty offering might be parts only or may include parts and labor. These warranties are sold on a per-turbine, per-year basis and cover the full value of the turbines with little to no deductible. Pricing for the OEM warranties range anywhere from $30,000.00 per turbine per year for a 1.5MW turbine to over $150,000.00 per turbine per year for a 3 MW WTG. Using the lower pricing range, a wind farm with 100 1.5MW machines electing to purchase a five-year warranty would incur costs of $15M. (100 Turbines x five years x $30,000 = $15,000,000 warranty bill).
Purchase Ventus Turbine Warranty Plus: until very recently a viable, cost-effective third-party warranty option has not been available to the wind farm operator. Ventus Turbine Warranty Plus product is designed to wrap around the turbine supply agreement (TSA) to continue the coverage supplied by the OEMs.
Ventus Turbine Warranty Plus is sold in non-cancellable fixed price “blocks” of five-year periods. Significantly, Ventus Turbine Warranty Plus coverage can be purchased for far less than available OEM warranty options, the price being determined by the make, age and loss record of the WTG.
BUYING AN EXTENDED WARRANTY – WHAT EVERYONE SHOULD KNOW
Who takes care of the claims?
If you purchase extended warranty from the OEM you have to deal with the claim. If you buy from Ventus, then Ventus will help with claims settlement. What happens if the manufacturer goes out of business?
Ask about parts, labor, and other expenses?
Never assume that a WTG extended warranty insurance includes parts and labor costs.
Know Who You’re Working With
When you purchase an extended warranty plan, you're making a contract between you and Ventus who place your business only with first class A-rated insurers.
Please contact us for more information.