Insurer sues over fire at Kahuku wind energy farm

THIS STORY HAS BEEN CORRECTED. SEE BELOW.

An insurance company that paid a multimillion-dollar claim to cover losses in a battery fire at First Wind’s Kahuku wind energy project is suing to recover damages from two manufacturers that made components for the battery system.

The insurer, Certain Underwriters at Lloyd’s London, paid First Wind about $2.4 million for "business interruption" losses it suffered as a result of a May 23, 2011, inverter fire that destroyed one of 10 dynamic power modules at the core of the Kahuku wind farm battery system. Lloyd’s said in the suit filed last week that it is seeking to recover the amount it paid to First Wind.

The fire was one of three that struck the battery system between April 22, 2011, and Aug. 2, 2012. The first fire occurred soon after the 30-megawatt wind energy project went online March 1, 2011. The Aug. 2 fire was the most serious of the three, destroying the battery system and knocking the facility out of service for more than a year.

First Wind installed the battery system at the request of Hawaiian Electric Co. to smooth out voltage and frequency fluctuations inherent in wind power. First Wind recently completed work to replace the destroyed battery system with a "dynamic volt-amp reactive" device that uses a different type of technology to regulate power fluctuations.

The wind project was restarted during the last week of August, a First Wind spokesman said. Company engineers initially limited its output to 5 megawatts during a testing phase. First Wind expects to gradually ramp up the output to the full 30 megawatts by the end of the year. The project at full capacity produces enough energy to serve about 7,700 homes.

Dynapower Co., one of two defendants named in the suit, manufactured the power inverters used in the battery system. The inverters convert direct current generated by wind turbines into alternating current that can be fed into the grid. The other defendant, Electronic Concepts Inc., made the capacitors used in the inverters.

"An investigation of the April 22, 2011, and May 23, 2011, fires identified the ECI capacitors contained in Dynapower’s inverters to be the cause of the fires," according to the lawsuit.

The investigation determined, among other things, that the fires started in the capacitor area of the battery system, that the ECI capacitors "were shown to have had manufacturing defects" and that the design of the Dynapower inverters were "not sufficiently robust to operate in the environment," according to the lawsuit.

An ECI official said the company does not believe its capacitors were at fault.

"At this point we don’t agree with the conclusion they are drawing," said Joe Bond, ECI operations and engineering manager, in a telephone interview. "We defend our reputation in our product. We’ve been doing business for 40 years in the industry and with a reputation of quality and reliability."

Officials from Dynapower did not immediately respond to a request for comment.

CORRECTION: Dynapower Co. and Electronic Concepts Inc. are defendants in a lawsuit stemming from a battery fire at a Kahuku wind farm. An earlier version of this story and the story on B7 of the Monday Star-Advertiser called them plaintiffs.