Wind farm off the coast of Rhode Island. The wind farm off the coast of Rhode Island. (Photo: Eric Thayer/Bloomberg)

Wind farm operators can't predict the weather. But they can hedge it.

Investment manager Nephila Holdings Ltd. and insurance giant Allianz SE have banded together to offer an insurance policy of sorts to wind farm developers known as a "proxy revenue swap." It's a technical way of saying they're guaranteeing that revenue from a farm will fall within a certain range.

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