Arjun Sharma, Partner, highlights the critical importance of understanding and managing flood risks in renewable energy projects. Drawing on his background in construction engineering, Arjun explains how, by leveraging advanced tools and mitigation strategies, project developers and their insurance brokers can ensure robust protection against evolving flood risks. For more insights and tailored support, contact the NARDAC team today.
Q: Arjun, tell us why flood risk is now a high priority for developers.
Flood risk is an increasingly critical factor in project development across many territories, largely driven by the rising severity and frequency of natural catastrophe events, and the development of flood prone land. But it’s not just projects facing coastal flooding risks, such as tropical cyclones, that are a concern. As the global climate continues to change, we are seeing more intense rainfall across the world – increasingly in places not historically known for flooding or storms. These shifts are driving the need for higher flood sublimits and pushing project developers to implement enhanced mitigation measures at their sites.
Q: How are insurers looking to better understand flood risks at project sites?
Insurers have a range of tools and techniques to help ascertain and understand the nature of project flood risks.
- Natural Catastrophe Modelling: Provides historical data on natural catastrophe events, damage factor(s) for the type of project being built, and loss scenarios for a range of flood return periods.
- Hydrology reports: Detail flow rates – the speed and dynamics of how potential excess waters pool and drain on a project site – the potential impacts of flood events and the impact of the project’s construction on flow rates. Hydrology reports also differentiate between the effects of various flood types, such as urban runoff, storm surges versus riverine overflow, and calculate the site’s overall flow rate before/ after construction. Hydrology reports advise the implementation of appropriate flood risk mitigation measures to effectively deal with estimated flood return period events– typically tailored to a 1 in 100-year event.
- Gradient maps: Provide contour visualisations which demonstrate that vulnerable site equipment such as solar PV, BESS units, main power transformers and inverters are placed in areas positioned above and away from the flood envelope of extreme flood events. They also illustrate the flow direction of runoff water into water management systems such as stormwater channels, swales and attenuation ponds.
- Geotechnical surveys and borehole data: Offer insights into soil conditions and natural drainage.
Collectively, these field and desktop studies assess the drainage rate at the project site, taking into account all the flood mitigation measures implemented.
Q: What should underwriters look for in mitigation measures to have confidence in flood risk management?
In the first instance, underwriters should have the confidence that the engineering, procurement and construction (EPC) contractor has diligently assessed the site’s local stormwater drainage capacity and will use that assessment to determine the most appropriate mitigation measures.
Secondly, it’s important to recognise that replacing natural ground materials with impermeable surfaces like concrete can significantly increase water flow rates and demand on drainage infrastructure. It should be clear that consideration has been given to factors such as aggregate size, layer thickness, and the rolling compaction of the site subgrade to ensure adequate drainage. Similarly, the design of inclined runoff channels for concrete structures and soil stabilisation works around riverbanks and beneath large, heavy concrete pads is also key,
These considerations should evidence that construction projects are improving on the existing “natural” flow rates on their sites. This makes it essential to then assess whether the drainage channels in place can adequately manage the additional water volume; whether they need improvements; or additional mitigation measures.
One of the most effective flood mitigation measures on construction sites are attenuation ponds, which not only help to control flow rates into drainage infrastructure, but also promote natural drainage and enhance evaporation processes, all whilst promoting ecological diversity. They play a key role in managing surface water effectively.
By the time a project reaches the insurance stage, these mitigation measures should already be implemented and validated – which is where, again, the hydrology report becomes critical. Underwriters need to ensure that these reports clearly demonstrate the effectiveness of the measures in place and that the site’s drainage systems can handle potential water flows under a variety of conditions. This gives confidence that the flood risks are being actively managed.
Q: What does good flood mitigation look like for a project in construction?
Flood risk during construction is higher than the project operational phase, owing to the fact that permanent infrastructure responds better to flood risks, and mitigation measures will be fully in place. Throughout the construction period, the EPC is responsible for managing flood risks and ensuring best practice is adhered to.
Key flood risks during construction include temporary works – where the ground level may need to be excavated – and newly exposed earth works, which can become subject to erosion, swelling and settlement. In addition to the climatic and weather factors driving site flood risks, it is also important that mitigation measures for impacting existing water levels during construction are also accounted for.
During any site earthworks and excavation works, therefore, the pumping out of ground water and the effective disposal of this water is critical. To ensure redundancy during pumping operations, it is best practice to use two pumps to mitigate the risk of failure. Owing to the potential for ground water to be contaminated with heavy metals and other hazardous materials on site, the storage and distribution of pumped ground water should be carefully pre-assessed to determine the required transportation capacity for processing.
In mitigating the effects of any potential construction site flooding, the EPC contractor should utilise the desktop studies to produce emergency procedure plans, and ensure:
- The appropriate anchorage of temporary site equipment.
- The strategic placement temporary site facilities, such as welfare cabins and emergency muster points, so that these aren’t located at the lowest laying part of the site.
- Bulk materials are stored in non-flood vulnerable areas, with sealed protection for materials subject to degradation through moisture exposure.
- The containment and secure storage of hazardous chemicals and fuels should follow best practice which removes the potential for widespread environmental contamination in the event of a flood.
- Utility improvement works are planned for and carried out efficiently so that manhole covers and pipe connections are not left exposed for long periods of time.
- Underground utility services such as water pipes are always scanned for prior to excavation works to ensure water pipes are not damaged.
- In proximity to riverbanks, overflow protection measures such as sandbags and silt netting should be deployed adequately.
Q: Are there any special considerations based on technology risks?
Different renewable energy technologies present unique risks during flood events:
- Solar: Racking structures rely on concrete friction piles, where the type of foundation soil and porosity can be affected by oversaturation following a flood event, potentially leading to settlement or torsion on the racking systems.
- Wind turbines: Similar to solar, wind turbines combine concrete friction piles and reinforced concrete pile caps to provide stability against flooding.
- Battery Energy Storage Systems (BESS): These typically involve 40-tonne containers on concrete pad foundations, or also resting directly on concrete friction piles dotted around the container. The significant weight and the ground disturbance caused by these pads, as well as the innate vulnerability to water require careful assessment of soil stability and drainage to prevent pooling.
Q: What about longer-tail risks from flood events that might occur during construction?
Flood events primarily impact projects in the immediate aftermath. However, developers should employ site surveyors to monitor target control points on structures for several weeks post-flooding to identify any lingering settlement, soil heave or torsion issues in concrete structures, caused by waterlogged land or shifting piles. By establishing monitoring datums, any ground movement can be detected, helping developers address potential issues early.