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Offshore wind: Resourcing for growth

Capital is critical to delivering the energy transition and making projects happen.
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By Stuart Broad , 

Offshore Wind Advisor

11/09/2024 · 5 minute read

Capital is critical to delivering the energy transition and making projects happen. However, investment in clean energy — including investment in offshore wind — can only be fully realised when skilled workers are available to build, operate, and maintain the technology and plant.

The increase in offshore wind projects will likely create new jobs and increase competition for talent across the global energy supply chain. For instance, demand for offshore wind jobs is forecast to triple by 2030, with a potential 900,000 full-time employees. This extensive growth is largely due to the resiliency shown by the offshore wind sector despite numerous challenges, such as inflationary pressures, fierce competition for seabed leases, and delays in network connections. In 2023, offshore wind recorded its second-best year for annual installed capacity, with 10.8 gigawatts (GW) of capacity installed globally. Growth is accelerating, with some projections suggesting that installed capacity will reach over 740 GW by 2040.

While a shortage of skilled technicians, engineers, developers, and contractors could pose risks to the sector’s current growth trajectory, there are opportunities to help alleviate this pressure, with the insurance industry playing a role.

Workforce transition

The energy industry is transitioning. Aside from advances in technology and changes in its response to the growing global need for affordable, reliable, and environmentally sustainable energy, the jobs and skills required for a successful transition are also shifting. The offshore wind sector, for example, is experiencing an increase in employment opportunities for technology development and project construction specialists, particularly as original equipment manufacturers (OEMs) expand their facilities and ramp up production of turbine components and infrastructure. This could allow organisations to transition workers from traditional energy sectors, leveraging the crossover of knowledge and skills in foundation manufacturing, offshore construction, project development, and offshore operation and maintenance.

Upskilling and training new resources will create an urgent need for OEMs to establish international standards and certification in order to maintain quality and consistency during the construction and operational phases of projects. In addition, aligning standards across the world could also support a mobile workforce that can be deployed in other countries to help alleviate resource shortages and reinforce local teams, while sharing knowledge and skills.

Driving economic growth

Job creation could unlock economic growth for communities. For example, a report by the Global Wind Energy Council exploring South Korea’s ambitious 2030 offshore wind targets, found potential to introduce over 770,000 job opportunities to revitalise local communities.

However, skill gaps could jeopardise the success of any project in any location, underscoring the importance of increasing the pool of skilled resources across different specialties, such as technicians, maintenance crews, construction contractors, and even within the risk management and financial service industries.

The global spread of skills is also important. For instance, Europe’s early adoption of offshore wind has led to a concentration of risk industry resources in London — such as risk engineers, loss adjustors, and insurance brokers. However, the offshore wind sector’s global expansion means there is a need to diversify the risk industry’s talent pool and increase resources in high-investment regions.

How the insurance industry can help

It takes an average of two years to place a standard property insurance policy for an offshore wind project; a process that can involve up to 20 specialists, including marine warranty surveyors, insurance assessors, risk engineers, lenders advisors, risk managers, finance teams, lawyers, and brokers. Resources are severely strained when you consider the number of planned projects multiplied by the number of people involved in the insurance process and the time required to secure coverage.

To be an effective enabler of an accelerated energy transition, the insurance industry needs to address its own bottlenecks and local knowledge gaps to facilitate efficient risk assessment and insurance placement processes. This may include introducing international standards and consistent processes to support onboarding new people. Insurance standards could include globally recognised policy wordings and contractual risk allocation provisions, as well as standardised terms, conditions, and coverage options. By harmonising their processes and offerings, competitive markets could help provide clarity, reduce complexity, and potentially shorten the timeframe for securing coverage. It will take transparency and collaboration between insurance markets to achieve it, but the benefits to markets and their clients far outweigh the challenges.

The global groundswell to accelerate the energy transition has never been greater, and the capital needed to support the volume of projects is unprecedented. But the ambition will need to be matched with a skilled workforce. Offshore wind is a proven, commercially viable, scalable, and reliable energy technology. Now is the time for risk management and insurance professionals to innovate, challenge accepted norms, demystify processes, and support the growth ambitions of this critical sector.

Contact your local Marsh office for risk management advice and global insurance market solutions for your renewable energy projects.

Offshore windfarm projects

Marsh’s Energy & Power team has been advising offshore wind projects around the world for more than 20 years. We are continuing to invest in our team of risk and insurance advisors, engineers, brokers, and advocates to partner with our clients and ensure success at every stage of their projects.

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This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. LCPA 24/420