COP26 goals for greener wind supply chains are achievable, but the odds must shift in favor of developers – Guest column



The following is a guest column by Kirsty Curry, senior consultant at K2 Management.


The RenewableUK Global Offshore Wind (GOW) event in London, hosted by RenewableUK in September, heralded the return of in-person events to the industry, and for the first time in over 18 months, the halls were buzzing with customers, colleagues and suppliers. ready to do business face to face again.

Alok Sharma, President of COP26, was the keynote speaker for GOW. He rightly encouraged the industry to help “Support the broader efforts of COP26”, something that, of course, everyone who works in wind power is very motivated to do.

Kirsty curry, K2 management

But there was one thing Mr. Sharma said that caught my attention in particular. He encouraged the industry to start “Stimulate action on all of your supply chains, encourage your suppliers to commit to net zero and work with them to reduce emissions” and “Use your purchasing power to drive change in the global economy, just as you use your inventiveness and insight to drive the clean energy transition across the world”.

His emphasis on business-to-business collaboration and working together to increase our renewable energy capacity while reducing the sector’s carbon footprint is one that we as an industry should welcome. A common goal of zero emissions calls for a common effort to achieve it.

However, there is an argument to be made that market conditions for renewable energy currently dictate that most companies in the sector have little purchasing power clout.

Red tape hinders progress

One of the main challenges that companies in the wind industry face is the bureaucracy that they have to eliminate in order to complete a project. Currently, developers are faced with a tangled list of permits and tenders to start their project. The contemporary maritime licensing and offshore planning regime falls short of today’s scaling ambitions, acting as an obstacle at all levels. From planning permissions from local councils to regulations and approvals from central government, there are a number of regulatory obligations that continually block development.

This in turn erodes the purchasing power of developers as they constantly face consent delays, which means they are unable to deliver effective lead times to vendors. A lack of certainty about the timescale makes it difficult to engage suppliers in projects after tendering processes have been completed. And with few vendors in the market, it removes the developer sourcing initiative and gives vendors the edge. The opportunities, then, to use purchasing power to reduce emissions along the supply chain become narrow.

UK supply chain challenges

The challenge of immense demand from project developers, coupled with a limited supply base, is keenly felt in the UK. Manufacturers of the wind industry are almost entirely located abroad. And given the demand to develop wind projects in territories around the world, the purchasing power does not belong to the developers, operators or producers of electricity.

We need more competition between a greater number of OEMs in order to give more power to the different market players. Lack of competition creates a market that cannot grow at a rate that matches its potential, because if a business cannot afford the prices or deadlines dictated to it, the project will not get off the ground.

Looking forward

In essence, for Mr Sharma’s laudable vision to be realized, the UK needs to tackle two key areas. First, the barriers to authorization need to be streamlined and simplified to facilitate the pace of development required in the wind industry. This will not only continually attract investment in a booming industry, but also provide greater certainty for developers, which in turn will help them make better and greener deals with their suppliers.

Second, the conditions that encourage companies to base their supply chain operations in the UK need to be tightened, and large OEMs need to be encouraged to establish manufacturing bases in the UK. We have seen glimmers of that, with the recent announcements of the Siemens Gamesa blade plant in Hull, but more can be done if the UK government’s ambitious goal of 100% electricity from renewable sources is to be met. And more, if we are all going to work towards a greener wind energy supply chain.


REMARK: The opinions, beliefs and views expressed in guest articles do not necessarily reflect the opinions of OffshoreWIND.biz.

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