Together with a fast-paced innovation tempo, the industry of renewables - meaning the collection of industries that produce renewable electricity - is characterized by overall complexity. Due to the convoluted elements that need to be in place for renewable electricity to be produced, distributed and delivered, its supply chain (often catered for by specialized logistics providers) is mirrored in the difficulty, with stark differences depending on the energy source involved. The beauty and the importance of this is that supply chains supporting the production and the distribution of renewables are not just made for moving things from A to B - they are made to establish a grid for a more sustainable future.

As defined by the United Nations, renewables are “derived from natural sources that are replenished at a higher rate than they are consumed”, and today these can be: solar, wind, geothermal (using heat from the Earth’s interior), hydro and biomass. Since its inception, which can be found as far as 200 BC in Europe with people using the power of water and wind to manoeuvre flour mills, science, technology and innovation shaping the renewables industry have come so far. Since then, this industry has witnessed a fast technological transformation, shaping new geographical landscapes, shifting international politics, and altering the idea people had about what electricity is and where it can be sourced from. For a business involved in renewables, the first step is identifying the right location for the renewables production. After that, the wheel of bureaucracy starts, which in this sector can take years, and then there is the need to figure out how to build a specific supply chain in terms of infostructure, to build plants and establish a reliable power grid, making sure it results as cost-efficient, and effective as possible.

The supply chain of solar

Even if not equally available all over the world, where possible this renewable source is very dependable and in terms of production, is by far the most mature and scaled. Even though it is easier to transport photovoltaic (PV) cells (e.g. compared to wind towers, etc.) PVs are not as durable as they degrade quite quickly, making it therefore not as efficient in terms of electricity generation. Today, from a cost perspective (with the presence of an established retail market) setting up solar panels, both on a large scale and at a private level on a home roof, is quite convenient. Currently, the focus of this industry is building efficiency and growth, and it can be seen in the amount of recent investment in solar power with more companies realising there is great potential in renewable resources, e.g., Saudi Arabia invested about $266 billion last year. For manufacturing, even though the technology is widespread globally, East Asia is the main hub with China at the forefront. From sourcing to producing and exporting, China is becoming the undisputed main player, mastering production scales at a cost point for PV cells and panels, with the country’s solar electric power generation capacity growing “by a staggering 55.2 percent in 2023”, translating to over 216 gigawatts (GW) of solar power built during the year. This interest is naturally placing some pressure and constraints on related supply chains and logistics that for solar power is mostly containerized. A whole system is to be established and sustained, moving PV cells and panels efficiently through special cargo out-of-gauge operations. What is evident is that timing is of the essence here, as it involves orchestration to build solar farms at scale in remote locations, which can take time and involve integrated supply chains from ocean and inland transportation, special customs duties, etc.

Brown and black solar panel house

The supply chain of wind power renewables

Wind power is the kind of renewable electricity source that requires a complex special cargo supply chain, starting from the movement of the necessary raw materials (e.g., steel, and other metals) which is often restricted by political and economic disruptions. The pace at which the industry and the technology have developed is vastly outstripping logistics. With big investments flowing into offshore plants, there is a need for logistics infrastructure to advance and transform wind power sourcing into a well-oiled machine. Partnerships between logistics providers and wind electricity companies are coming together out of necessity to respond to demand and to fuel innovation. Adding to the complexity, due to climate change, areas where wind was plentiful and manageable are now showing different weather patterns making it difficult for companies to rely on those locations and forcing them to invest in moving areas and/or in the necessary technology for re-powering and restoring. Because of this, the role of logistics within this industry it's so important. “There's the need to build vicinities and synergy between providers through integrated logistics connecting inbound and outbound logistics” claims Sussie Bager, Area Head of Nordic key clients at Maersk. Within the wind energy industry, logistic providers can support on three steps: generation, transmission and support of the substations. Different governmental and private players are specialised in each of these three steps, while logistics providers support across all. Strong project logistic work is necessary here as timing is key for projects involving special cargo. This is because the minimum mistakes can have immense cost, and if parts are not moved in the right way, at the right time, a company can be set back by the millions in just one day.

The supply chain of geothermal and hydroelectric power

Geothermal power doesn’t require an intense supply chain flow as it is relatively easier to set up. Once a suitable geothermal location is found, the right spot in the ground is identified and generators need to be built above it, connecting it to the source underground. The high temperature of the earth then heats the water going through a strategically placed piping system and it is the force of that boiling that drives the turbine, effectively producing power. Recently, new countries are coming into play investing in geothermal, e.g., Kenya setting the ambition to produce electricity using geothermalpower, inspiring other neighbouring countries in East Africa to do so. The supply chain setting around geothermal electricity focuses mostly on project logistics to move the necessary material and then for installation and maintenance. In the case of hydroelectric power, the setting is quite similar where the construction of dams and turbines is crucial, however, this type of installation is to be chosen very carefully as retaining or changing the course of a waterway can greatly affect the environment and the human communities around it. The supply chain and logistics setting around hydro electricity production is quite simple with very few moving parts, requiring for a strong project logistics provider. Unfortunately, like many others, today this sector is highly affected by climate change, in particular droughts and other significant changes in sea levels, impacting related logistics as well.

What's in sight for the future of renewables?

It is clear that climate change is impacting renewable electricity production, making its planning, procurement and supply chains tremendously less predictable and reliable. For instance, the continuous rise of sea levels is going to be problematic for the existing infrastructure, requiring changes to the whole grid and demanding new designs for future plants. On the other hand, the supply chain of renewables has the potential to change the economic landscape of the world, with power shifting according to the changes in climate. On a positive note, this is an industry that could boost sustainability. Apart from choosing to extract power from natural sources that can be replenished, renewable electricity is also necessary to produce e-fuels, of which demand (and the need for related logistics) will rather soon spike. For renewables, the industry is dictating the terms of its logistics and equally, in turn, logistics is innovating the industry. It is extremely important to include a logistics provider early on as this is a sector where detailed planning is needed due to the complexity of location scouting, regulations, permits, the cost of building the infostructure, etc. “Unfortunately, the big players in the renewables sector have been learning at the speed of pain for over thirty years. The need to be proactive and preventative is now obvious, starting a new chapter in terms of cooperation between developers, governments, renewables manufacturers and logistics providers in a positive way” says Robin Townley, Business Product Owner for Global Project Logistics at Maersk. Simplified, integrated supply chains can boost renewable electricity production. If a true partnership based on collaboration is established early on, a strong supply chain that enables growth can not only move power efficiently but also support a sector that is essential for our future on this planet.

Integration pictogram

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