Market News

Thefts at PV Plants – Is the Trend Set to Continue?

25th July 2018

A recent spike in thefts at PV plants across the UK has owners and asset managers looking into possible mitigation strategies. Although it would not have been unusual to hear about the occasional theft at a solar farm in previous years, we have recently become accustomed to hearing about a handful of such occurrences on a monthly basis. The jump in the number of thefts and attempted thefts in the past six months alone is such that it cannot be dismissed as a coincidence and cannot necessarily be attributed to a single group of perpetrators. At QE, we have been looking into what more can be done to boost the security systems in place whilst ensuring that contractors are complying with their existing security obligations.

Towards the end of last year, QE noticed a trend of these incidents taking place around the southern coast of the UK. We gathered the information that we had relating to these incidents, and took the step of contacting the O&M operators of the PV plants under our asset management to warn them of this emerging pattern. We asked that the operators confirm that the security apparatus at each of their sites was functioning correctly and that they exercise extra vigilance in dealing with site security. These initial efforts resulted in a group of perpetrators being caught red-handed and subsequently being arrested. Whilst we have not had any further updates from the police regarding these particular arrests, we soon discovered that the pattern continued regardless, and its geographical spread in fact widened.

These incidents not only result in the obvious financial losses due to plant owners having to pay to replace stolen equipment, they also pose risks relating to production losses where repairs require the plant to be shut down. Furthermore, there may be risks relating to plants’ insurability or increases in insurance premiums, as well as Health and Safety compliance risks. Such incidents may even imply strains on the landlord/asset owner relationship if landlords increasingly come to perceive the asset as a target for criminals on their land.

To date, financial losses resulting from the thefts that QE are aware of, have ranged from immaterial to significant – however the equipment targeted has almost consistently been solar modules and cables. The other matter that is not so easily quantifiable is the time cost of managing these incidents. PV plant owners and asset managers cannot manage these incidents without coordinating with a number of different parties – O&M operators, landowners, insurers, loss adjusters, surveyors, security companies and the police, to name a few. This makes such incidents time consuming and complex to manage.

Whilst a few of these thefts have led to successful insurance claims – as the security protocols agreed with the insurers had been complied with – we have started to notice that insurers are questioning the existing, agreed protocols and whether they are fit for purpose. Indeed, in many of the cases that we are aware of, thieves have been able to break into PV plants, steal equipment, often loading it into vans, and then drive away without being caught – despite security systems functioning according to their design. Whilst footage of the incidents has been recorded on CCTV, the resulting images are often not clear enough to be able to identify the perpetrators’ features.

Furthermore, security alarms that would have been triggered did not result in security personnel attending site and deterring the perpetrators. It is clear to see why insurers might look into increasing their premiums, setting higher deductibles and insisting on tighter security procedures.

More remote a risk – although just as important and concerning – revolves around Health and Safety compliance. Where PV plants’ non-compliance with Health and Safety regulations, e.g. a lack of warning signs, leads to intruders suffering injury, plant owners may still be held liable despite the intruders’ criminal intent. At QE, we regularly recommend that our clients engage Health and Safety auditors to attend their sites and verify compliance in this area – the increased risk of intruders on site makes these audits all the more important.

In many cases…thieves have been able to break into PV plants, steal equipment, often loading it into vans, and then drive away without being caught – despite security systems functioning according to their design.

Clearly there is no shortage of risks to PV plant owners posed by these crimes. In order to tackle these risks, QE have established a Security Working Group whose function is to carefully monitor these incidents across all client portfolios, to ensure that contractors comply with their security obligations, to raise awareness of the incidents, to ensure that a QE wide protocol is consistently followed and to brainstorm different mitigation strategies. As well as a number of communications sent out to O&M operators, QE have contacted both the STA and the police on a number of occasions to alert them to the emerging patterns. QE are also speaking to a number of security companies and obtaining quotes for enhancement of security systems which means that we can help clients formulate a cost/benefit analysis of enhancing security systems versus facing higher insurance costs. Whilst we cannot predict whether this trend will continue, we can prepare our clients so that losses and risks are mitigated as much as possible.

If you would like to speak to us about this or any related matter, please contact the QE Security Working Group via the enquiries section of our website.


This article is written and edited by Shirine Azzi. She can be contacted at: shirine.azzi@quintasenergy.com

 

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