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LOGISTICS OF THE ENERGY REVOLUTION: NEW BUSINESS STRATEGIES FOR NET ZERO CHANGE IN LOGISTICS

A key characteristic of renewable energy infrastructure is a structural shift from large, centralized power stations to a much greater number of smaller, decentralized renewable energy systems. That’s going to require energy companies to rethink their supply chains.

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Logistics in the New Energy Industry

Many of today’s big energy players expect to participate in the renewable revolution. International Energy Companies (IECs), in particular are shifting their focus as they diversify from fossil fuels to operating wind and solar assets, and distributing renewable energy.

One key outcome from these investments is a blurring of the boundaries between the energy and utility sector and the oil and gas sector. In this context, the role of logistics and supply chains is also changing fundamentally.

An energy system based upon renewable technologies will be significantly more diverse and significantly more geographically distributed than today’s fossil fuel based system. Once concentrated in a relatively small number of large plants, future power generation capacity will come from hundreds of thousands of wind turbines, both on-shore and off-shore, and millions of solar panels installed on rooftops and in dedicated solar parks. 

In 2021, for example, Germany had 13 oil refineries and around 100 natural gas power plants with a nominal total capacity of 32GW. The country’s 2021 onshore wind energy capacity comprised 28,230 wind turbines, with a nominal capacity of 55GW.

At the most basic level, a gigawatt of electricity generation capacity requires three or four gas power plants, or between 200 and 300 of the latest large onshore wind turbines. To assemble each of those turbines, their owners might need to transport ten very large “out of gauge” components, along with several containers of smaller parts. 

It isn’t just the volume of logistics support required that makes renewables different from fossil fuel energy. The nature of that support will be very different too. Emerging challenges include the need for new solutions to transport the very large blades used by future generations wind turbines and for new transport assets to support offshore wind developments.

In the solar sector, distribution networks will need to adapt to support new locations and installations of widely differing scales. Established energy players will need to establish collaborative supply chain relationships with new partners too, especially the manufacturers of renewable power generation equipment. 

If you enjoy reading this short blog, you will definitely enjoy reading the latest Logistics of the Energy Revolution White Paper.  Please see below to download your copy today. 

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.