Here’s How to Build a Successful Renewable Energy Supply Chain
CC0 photo credit: https://unsplash.com/photos/ZFefAMHklPA
By Emily Newton
2020 was a record year for wind and solar power. Oil demand slumped to its lowest levels since World War II, while renewables continued their climb. This is good news for the planet, consumers and the energy industry — but there’s still considerable work to be done to achieve true renewable energy supply chains.
Renewable energy sources like solar panels, wind turbines and geothermal pumps are improving in efficiency almost continuously. Given recent widespread investments at the residential, commercial and governmental levels, costs are dropping everywhere. These technologies are cheap, efficient and easier to scale in many cases than incumbent energy sources like natural gas and coal.
It’s time to discuss how to build successful renewable energy supply chains from two perspectives. The first is the supply chain for energy itself: the components, facilities and infrastructure that deliver power. The second is the supply chain for the world’s material products and commodities: manufacturers, freight carriers and delivery companies. All these pieces must work together in harmony to achieve a sustainable future.
No matter what or where things are delivered, there are clear steps companies can take to improve workflows using clean energy and sustainable practices. They begin with cultural and planning stages and continue with capitalizing on technology. It’s also vital to understand which regions are best set up for economic competitiveness and prepared for the future of clean energy and accountable economics.
Companies everywhere are taking advantage of these trends, including in global supply chains for goods and energy. Here’s how companies can build a solar or wind energy supply chain or add these technologies to their manufacturing processes.
1. Visualize and Digitize the Supply Chain
Organizations engaging in delivery — whether raw materials, finished goods or energy itself — appreciate the value of visualization and digitization. The Internet of Things (IoT) and other connected technologies unlock new potential almost daily. For example, advanced connectivity could add $250 billion to activities associated with the delivery of oil and gas by 2030. Connected technologies make renewable energy grids responsive, resilient, efficient and inexpensive to oversee, scale and maintain.
Making any supply chain greener and more sustainable involves first visualizing the existing infrastructure and company processes. It requires identifying specific pain points, blind spots in existing data, and the accumulation of insights to make the rollout of renewables a smooth and rewarding one.
This visualization and digitization may look different to various supply chains, and so will the associated benefits.
For example, companies delivering water or energy derived from natural gas or oil exist in the gray area between public and private entities. This exposes them to incredible pressures from regulators and the public. IoT can make pipes, powerlines, and delivery infrastructure that’s less wasteful and easier to maintain through the widespread accumulation of data.
Which areas are prone to leaks? What type of pipes are involved? Where is each public utility access point physically located? Does the data point to geographical areas that could use renewables first as backups and eventually as full-scale power generation assets?
Geospatial mapping makes the visualization of existing assets painless and maintenance more efficient. It’s also essential for rolling out clean energy. Data visualization and mapping help create a roadmap for conceiving and executing wind-energy supply chain upgrades or other retrofits based on the host of available data. This includes the age of existing infrastructure and demographic, environmental and topographic details — like soil composition and the location of the nearby water table.
Meanwhile, manufacturers and other material goods companies interested in trimming waste typically look into energy-saving appliances, machinery and other investments. Visualize each warehouse floor, job shop or freight hub. During which activities is energy being needlessly spent? Is there a way to automate machine activations and other functions to save energy? Which facilities receive ideal amounts of wind or solar to take advantage of renewables?
2. Target Regions With Attractive Infrastructure
Nations compete with one another in many ways, but economic competitiveness emerged long ago as the most important arena. However, not every country prioritizes its economic competitiveness equally or values it in the same way. Part of the problem lies in how it’s measured.
The United States spent decades receiving dismal grades from the American Society of Civil Engineers for the state of its infrastructure. This is a problem for several reasons, one of which is the fact that transitioning from coal, oil and natural gas simply isn’t possible with existing technologies and badly outdated frameworks.
Emerging innovations in dry-type, 3D core transformers make it possible for municipalities and companies to invest in smart grid technologies. Wildfires like those that recently wreaked havoc in California resulted in part from antiquated and poorly managed transformers and power lines. Maintenance is not to be taken lightly. The cost can be measured in lost lives, damaged ecosystems, and economic and financial devastation.
Material goods and energy supply chain companies can’t compete realistically in regions prone to widespread power outages and poor economic, infrastructural and environmental stewardship. Nations that value their economic competitiveness should prioritize modernizing their infrastructure.
In the meanwhile, there’s evidence that shareholders are more willing to seek countries and economic regions making aggressive pushes toward renewable energy and more resilient public infrastructure. Doing so is good business, and it helps these companies impress their customer and client bases by making purposeful strides toward accountability and sustainability.
Demand for fossil fuels may not peak until almost 2030, but after a certain point, it will be like squeezing blood from a stone. Companies must appreciate this fact to remain stable, competitive and in good standing in an increasingly green-focused world.
3. Go All-in on Electric
One of the reasons for the positive return on investment for renewables in the supply chain is because it insulates participating companies from the increasingly violent fluctuations of supply, demand, and regulatory status in the oil and gas market.
It’s necessary to understand the ROI of other emerging technologies, too. Consider battery-powered cars and trucks, which may soon be the backbone of the supply chain industry. Even companies specializing in the maintenance of water, natural gas, oil or other energy infrastructure will appreciate the cost benefits of sending out technicians in electric work trucks.
According to the U.S. Department of Transportation (DOT), around 80% of American freight makes a journey of 250 miles or less. This presents freight and supply chain companies with an exciting opportunity to revolutionize the last mile of consumer and commercial deliveries using clean energy.
Companies like Rivian, Tesla and Daimler Trucks are setting increasingly aggressive delivery timelines for their all-electric vans, semi-trucks and other delivery vehicles. Some of these had delivery dates in 2020, although the pandemic may have caused delays.
Still, Rivian and some of its rivals are looking to have 100,000 of its vehicles operating in company fleets by 2023. If DOT data says the vast majority of deliveries happen within 250 miles, that makes it a job ideal for the still relatively limited range of electric vehicle batteries.
Electric vehicles are just the beginning. A truly green and sustainable national energy grid, comprised of many smart and resilient microgrids, means all homes and buildings should be electrified and turned into nodes in this expanding, two-way energy infrastructure.
A manufacturing plant or distribution center with solar panels can provide its energy requirements and may even produce enough to sell back or store it for the night time shift. Either way, the result is cleaner and cheaper energy for all and business locations that are much more economical to heat, cool and keep illuminated.
Companies involved in energy distribution must seize this moment in history and learn from positive examples in the industry. When European energy company Total realized solar was the way of the future, it purchased SunPower and turned it into a clean energy powerhouse in Europe.
The industry is filled with coil, oil and gas company success stories, like Shell, BP and Equinor, successfully diversifying their energy portfolios with green energy to reap near-term rewards while phasing out dirty fuels in the longer term. Taking the long view can be immediately rewarding, it turns out.
An Industry in Positive Transition
There are other ways for a company to make the adoption of green energy in the supply chain a more streamlined experience, but these are some of the most important fundamentals. If technology accessibility and cost are significant factors, the growing markets for carbon offsets can help smaller companies make a difference and set an example just the same.
Bio: Emily Newton is a journalist with over four years covering the environmental sector. As Editor-in-Chief of Revolutionized, she also covers the many ways technology is changing our world.