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Volatile energy costs a problem

Respondents say the rising cost of materials and labour – coupled with volatile energy prices – is impacting income and growth, potentially reducing the scope for future investment in the sector.

Difficulties in attracting and retaining talent (32%) also figures prominently as a supplier problem, as the industry faces major workforce challenges, as demand for green jobs outpaces the availability of qualified workers across the supply chain.

Other problems mentioned include shortages, delays, economic issues and geopolitical instability, while sustainability and cybersecurity are also concerns.

Contractors, suppliers and equipment manufacturers working on major renewable energy projects frequently share systems, adding potential entry points for malware into sensitive equipment.

TITLE: GLOBAL RENEWABLE ENERGY LEAD

COMPANY: WTW

INDUSTRY: ADVISORY SERVICES

Munday has been with WTW for seven-and-half-years, prior to which he was Renewable Energy & Power International Practice Leader for risk-management specialist, Marsh.

Darcy MacClaren

TITLE: CHIEF REVENUE OFFICER, DIGITAL SUPPLY CHAIN

COMPANY: SAP

INDUSTRY: PROFESSIONAL SERVICES

Darcy MacClaren is a strategic global leader who has spent 30 years growing, differentiating, and improving businesses through technology transformation with a focus on supply chain.

Cybercrime threat to clean energy

Solar farms and wind turbines are also typically in isolated locations and are controlled remotely by centralised computer systems, which increases their exposure to cybercrime.

On the subject of wind power, SAP Chief Revenue Officer for Digital Supply Chain, Darcy MacClaren, warns that complex logistics and regulations are hampering uptake of wind energy.

“The complexity of what needs to be done is what folks are struggling with,” says MacClaren. “The supply chain to do this is extremely complicated.”

MacClaren says the issue is that specialised materials are required to make the turbine blades, and adds that the logistics of transporting the blades – which can be as long as a football field – is also hugely challenging.

“Then you have to construct something in the middle of the ocean, which requires special ports and harbours,” she says, adding: “There’s also a lot of uncertainty about the scope of such a supply chain and the development time-frames needed to build these critical resources.”

MacClaren also cites as complicating factors the level of investment required, that there are “gaps in manufacturing” and that “ports and vessels remain uncertain”.

Regulation is another sticking point, she says.

“It’s not just regulations from the federal government, but also from myriad local municipalities that have a say,” she explains. “This can impede production, which adds risk and impacts the investment needed to bring these projects to fruition.”

She adds: “You’ve got to break down those barriers. You’ve got to get all these organisations working together.”

MacClaren stresses that technology can help, from a design, procurement,

Transforming the Clean Energy Supply Chain

supply chain, logistics and manufacturing perspective.

“We can help set up a sustainable, resilient intelligent supply chain with all these involved parties,” MacClaren said. “If we can solve the uncertainty of the regulation issues people are concerned with, then we establish a strong foundation to help create a supply chain for offshore and the wind energy industry.”

MacClaren calls for “a catalyst, an industry proponent” to “blast through obstacles” and to “bring disparate parties together, to get a viable industry off the ground”.

“We need an Elon Musk,” she added, referring to Tesla’s ability to successfully mass produce and sell electric cars. “We need a change agent, and I’m not seeing that.”

Returning to the big picture concerning renewable energy supply chain problems, the WTW report underlines the sector’s

EC amends clean energy regulations

An important European Commission (EC) clean energy regulation has been widened to encourage EU member states to roll-out clean energy infrastructure on the rail network.

The EC’s Alternative Fuels Infrastructure Regulation (AFIR) originally targeted electric recharging and hydrogen refuelling infrastructure for the road, maritime and inland ports detectors, as well as electricity supply to stationary aircraft. Now, it also includes rail.

The move will speed progress on EU Green Deal objectives, a set of EC policy initiatives whose aim is to make the EU climate neutral by 2050.

Under the regulation change, EU member states can assess the development of alternative fuel technologies and propulsion systems for rail sections that cannot be fully electrified for technical or costefficiency reasons.

At present, 80% of train-kilometres in Europe run on electric energy, a growing part of which comes from renewable sources. However, just 54% of the European rail network is currently electrified.

dependence on critical supplies, where the lack of even one essential item can hold up work on an entire project, which can be costly at a time of high demand.

Clean energy ‘all about the tech’

One of the report’s co-authors, Global Renewable Energy Lead, Steven Munday, says the key thing to bear in mind about renewable energy is that “it’s no longer a power sector but a technology sector”.

Speaking as part of a WTW podcast on renewable energy, he adds: “Renewable energy technology is moving ahead incredibly quickly. That does impact throughout its lifecycle in terms of origination, procurement, construction, and operations.”

He adds that, as well as new technologies emerging around renewable energy, there is also an “upscaling of existing technologies”, including hydrogen, battery storage and wind technologies.

“All of this equipment has to come from somewhere,” he points out, “and we are seeing that the original equipment manufacturers of all technologies are trying to produce sufficient amounts for what is required globally.”

He adds: “That is very difficult, and it is challenging the supply chain, particularly after the pandemic, and we are seeing that there is a major impact on projects’ timelines.” Munday adds that pre-pandemic, renewable energy companies were “in a race to deliver as quickly as possible”, and that sometimes this impacted quality, “especially if there were challenges with the workforce not having the right experience”.

He says post-pandemic, there is now “a move away from less experienced workforces” around renewable energy and also a shift away from ‘just-in-time’ delivery of projects.

He says lessons have been learned from the pandemic, with regard to supply chain interruption and availability issues, and that this is prompting organisations “to be more considered about renewable energy projects and to make sure power transformers, wind turbines or electrolysers are available at an earlier stage “to mitigate potential supply chain delivery and to avoid delay damages”.