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Windtech International January February 2024 issue

 

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While the US wind energy installation outlook looks bright – more than 23GW in new capacity forecast over the next two years – looming unforeseen supply chain bottlenecks could lead to project cancellations and postponements, putting as much as US$ 2.1 billion of revenue at risk, a new study by Wood Mackenzie Power and Renewables found.
 
Between 2019-2020, they anticipate strong growth in wind energy installations as the industry rushes to meet deadlines for US Production Tax Credits (PTC). However, increased demand for transportation capacity due to growth in partial repowering activity, logistics requirements, and competition from other industrial sectors could severely hamper the transportation segment’s ability to ship components.
 
According to the analysis, if these supply chain constraint issues are not addressed, more than 23% of the wind energy capacity installations expected in 2019-2020 could be delayed or cancelled. Moreover, turbine installations could decline by 1.1GW capacity – 366MW in 2019, 720MW in 2020 – representing a loss of more than US$800 million in turbine sales. PTC impacts, while more complex to estimate, could represent lost revenue of up to US$1.3 billion over the 10-year tax credit period.
 
The report, commissioned by the Wind Energy Logistics Group  – an organisation made up of participants from 16 key companies across the wind energy supply chain, including major equipment manufacturers, transport and logistics companies, and wind energy developers and installers – outlines the following collaborative actions that can help close the gap:
  • Shift installation schedules and transport deliveries to minimise quarterly peaks;
  • Establish forward storage sites to pre-position component inventories near wind farms;
  • Prepare transload and wind farm sites to accept early deliveries;
  • Prioritise shipments to the most efficient sites and wind farms;
  • Communicate these findings and develop action plans now.
 
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