• Research reveals three in five wind projects are reducing risk exposure by limiting number of contractors
• A quarter of projects have underestimated the cost of operational expenditure, leading to concerns of a significant impact on the bottom line
NEW YORK, Oct. 24, 2017 (GLOBE NEWSWIRE) -- A report launched in New York today by wind consultancy K2 Management and JLT Specialty USA, a U.S. subsidiary of Jardine Lloyd Thompson Group plc. (JLT), the leading global specialist risk advisor and broker, reveals that the wind industry should consider lifetime extension at a much earlier stage to ensure best project returns.
Launched alongside the AWEA Finance and Offshore events in New York, ‘Reducing The Levelized Cost of Energy: Challenges, trends and opportunities in today’s wind projects for tomorrow’s business cases’ has identified the key challenges and trends that will shape the future of onshore and offshore wind projects over the next twelve months.
The report reviewed data from sixty onshore and offshore projects throughout Europe and Latin America with clients including independent developers, state-owned utilities and private investors, giving a broad view of the challenges and opportunities facing the sector from a variety of different perspectives.
The key findings from the report include:
- A quarter of wind projects are looking to extend the life of their project – potentially by a further five years. Currently, twenty-five years is considered to be an achievable lifespan for an offshore project, but thirty years may be an achievable target. This news will be welcomed by developers and investors who, given the high cost of developing wind projects, are increasingly keen to optimize their return on investment but it is clear that steps must be taken to consider and plan for life extension much earlier – around year 10 – to ensure the best project returns.
- Developers are taking action to reduce their risk exposure on projects, with 60% of pre-construction offshore projects adopting five or less Engineering, Procurement, Construction and Installation (EPCI) contracts. Limiting these contracts could potentially reduce the costs of projects overrunning and the likelihood of a knock-on effect on other contractors as a result.
- A quarter of projects had underestimated the costs of operational expenditure, leading to concerns that this could have huge implications on performance and valuation of the project further down the line. Many of the projects that were surveyed had not yet reached the twenty-year lifetime, and so much of the project budgeting was based on educated assumptions, but there was real concern that these underestimations could up the costs of projects by millions.
Carsten Ploug Jensen, MD, USA and Canada at K2 Management, said: “This report gives a great insight into real wind projects, detailing the trends that are being seen across the industry and expert analysis on how these will reflect on future projects.”
“As a technical consultancy, we are on the forefront of energy projects at all stages of the lifecycle, supporting clients in making their projects a success. By teasing out these important trends from our assignments, we can help the industry to take an objective look at the market, giving insight into improvements and future challenges based on real project experience and expertise.”
Rob Battenfield, Senior Vice President at JLT Specialty USA, said: Pairing with K2 to collaboratively identify common trends in the wind sector, has allowed JLT and K2 to leverage each other’s insights and produce a document that should be interesting to the entire industry.
The collaboration exemplifies JLT Specialty USA’s focus and commitment to our clients in the wind energy space. We seek to understand our clients’ current insurance and risk issues, but also to forecast and identify emerging issues that may present new issues for our clients.
The full report features legal commentary from Eversheds Sutherland and can be downloaded from https://www.usa.jlt.com/insights/specialty-insights/reducing-the-levelized-cost-of-energy
ENQUIRIES:
JLT
Ashely Deal
VP, Marketing, JLT Specialty USA
ashely.deal@jltus.com
(310) 266-9464
K2 Management
Jo Clarkson
Content Manager and Communications Specialist, K2 Management
jcl@k2management.com
+44 (0) 7824 156 451
NOTES TO EDITORS:
About Jardine Lloyd Thompson (JLT.L)
Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.
JLT is quoted on the London Stock Exchange and owns offices in 40 territories with more than 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.
For further information about JLT, please visit our website www.jlt.com and follow us on LinkedIn at JLT Group and Twitter @JLTGroup.
About JLT Specialty USA
JLT Specialty USA is the U.S. platform of the leading specialty business advisory firm, Jardine Lloyd Thompson Group. Our experts have deep industry and product experience serving leading U.S. and global firms. Our key to client success is our freedom to be creative, collaborative, and analytical while challenging conventions, redefining problems, creating new analytical insights, and exploring new boundaries to deliver solutions for each client’s unique business and risks.
For further information about JLT, please visit our website www.jltus.com and follow us on LinkedIn at JLT Specialty USA and Twitter @JLTSpecialtyUSA.
About K2 Management
K2 Management supports its clients in their efforts to develop, improve and optimize wind projects to achieve the best possible return on their investment. Our global advisory and service offerings within wind project management and planning, risk and opportunity management make K2 Management a unique wind project consultancy covering the entire value chain; from the earliest phases of planning and development, to the actual construction and maintenance of wind projects.
K2 Management is headquartered in Denmark with 10 global offices and accumulated our experienced team has been involved in more than 1,000 wind projects – both onshore and offshore – in over 30 countries.
www.k2management.com
https://twitter.com/K2Management
www.linkedin.com/company-beta/2358876