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Five ways to build the energy supply chains of the future

Energy and logistics must work together to tackle the new demands of clean energy supply chains. Here’s how we think the two industries can do just that. 

The shift to clean energy is underway. For the energy sector, a complex and challenging journey lies ahead with many obstacles and opportunities. Partnering with logistics providers will be a critical piece of this puzzle. Put simply, the two industries must work hand in hand to develop energy supply chains that can handle growing demand and new technical requirements. Here are five ways that energy and logistics firms can team up to build the energy supply chains of the future.

1. Work end to end to create robust energy supply chains

The shift to clean energy will see energy generation move from large, centralized plants running on fossil fuels to smaller, decentralized renewable energy systems. Replacing fossil fuel plants with renewables systems of the same capacity can drive a 1,000x increase in logistics volumes. And delivering wind turbines and solar panels can be much more complex. Inherently, this revolution will create a number of discrete logistical problems. Rather than addressing these issues one at a time as they arise, energy companies will need to adopt an end-to-end approach, especially when adding new technologies, markets, and regions.

Gone are the days when each link of the energy supply chain could work in isolation. Instead, stakeholders must now examine the entire lifecycle of energy infrastructure from its delivery to performing service and maintenance and handling end-of-life assets. What’s the best way to do this? Put a single organization in charge of coordinating renewable energy supply chains and logistics activities. Adopting end-to-end thinking will also help energy companies evaluate the case for regionalization, which will ultimately pave the way for faster, more flexible, and lower-cost supply chains.

2. Focus on visibility and digitalization

Tomorrow’s energy companies must invest in smart digital platforms and tools to pinpoint the status and location of thousands of critical components. Making energy supply chains visible from end to end will not just optimize the use of logistics assets. It will also allow any potential delays and issues to be spotted at an earlier stage and improve the accuracy of predicted arrival times. Advanced technology, such as smart connected sensors, drones, and digital twins will be critical for tracking parts, carrying out inspections, and simulating real-world assets.

3. Identify transferrable skills from adjacent industries

We don’t need to reinvent the wheel. Clean energy supply chains can peek over the shoulder of other industries to find solutions to be replicated. For instance, the oil and gas sector is only too familiar with many of the logistical challenges that offshore wind turbines face. Energy companies can easily adapt lessons learned by offshore oil and gas platforms when serving wind energy supply chains. And there are crossovers with maritime logistics, too, with factories located in the vicinity of ports – just like those making many wind farm parts.

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4. Pursue sustainable logistics solutions

Energy companies have a significant role to play in supporting the development of sustainable logistics solutions as well. In the near term, logistics services providers can work with the energy industry to make operational changes, such as optimizing routes and the use of transportation assets. This will, in turn, cut costs and supply chain emissions. Over time, energy and logistics companies can put their heads together to develop early use cases for the next generation of renewable energy technologies, such as synthetic fuel and electric aviation.

5. Collaboration is essential

What’s clear is that cooperation and collaboration are essential every step of the way: creating robust and resilient energy supply chains will require multiple stakeholders to sit down at the table together. Technology manufacturers must talk to energy companies and logistics providers to come up with the best solutions even before designers sketch the first draft of the next models. After all, design decisions – for instance, when making the next generation of wind turbines – can impact logistics costs relating to the assets needed to transport parts and pose challenges on the journey, such as tunnels and bridges.  

Joining forces for the future of energy supply chains

The shift to net-zero will usher in dramatic changes to the way we design, build, operate and maintain energy supply chains. The logistics industry will be a key enabler in this shift to renewable energy. Given the issues that are already evident in global supply chains, it’s imperative that energy companies and their logistics partners join forces today to address logistical challenges as and before they emerge.

Logistics of the Energy Revolution

Logistics has an ever-growing role to play, both enabling and supporting the energy revolution.

A key feature of this will be the need of advanced logistics capabilities, competencies, skills and experience at unprecedented scale in the energy sector.

Published: April 2023

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