The renewable energy sector is on the cusp of a major period of growth. The global challenge of climate change, as well as the need for a secure energy supply, makes renewable energy projects an important part of the energy portfolio going forward.
There are lots of renewable energy opportunities available due to the speed and scale of the sector’s expansion. But, the relative immaturity of renewables also presents a number of challenges. While many point towards low electricity prices and an overreliance on government subsidies to have held back renewables, others highlight ways the sector needs to improve.
The oil and gas industry has decades of experience in constructing and safely running huge and complex sites. To be able to do this requires a solid procurement and supply chain management system to be in place, as well as reputable accreditation and certification.
Oil and gas also provides new renewable energy projects with a wealth of experience, knowledge and insight. Tapping into this resource is essential if the renewables sector is going to overcome the challenges it faces and unlock its full potential.
Health and safety (H&S) is one area that renewables can learn a lot from the oil and gas sector. Offshore oil projects have a lot of similarities to offshore wind, notably in the hazardous conditions they operate in and the need for lots of lifting and diving manoeuvres.
The one thing that renewables doesn’t have, however, is an agreed approach to the certification of personnel and equipment. Offshore oil projects are made up of certified, accredited workers being monitored by onsite H&S teams. A lack of sector-wide H&S governance is making it harder for renewable buyers to ensure the safety and competence of their supply chains and their operations.
Renewables remains exposed to a constantly shifting mass of government policy. The Trump administration, for example, recently imposed tariffs on the import of solar cells and modules. This could cause a painful rise in the cost of operating a solar farm project. A reliance on government support is not wholly negative though, and does present a range of renewable energy opportunities for observant suppliers. For instance, China spent $44 billion on international takeovers of solar and wind projects, representing a significant shift in the country’s energy policy.
Going forward, renewables companies need to make sure their operations are efficient and their costs competitive. Taking a lesson from oil and gas, good strategies for combating uncertainty are increasing innovation and reducing costs through better supply chain collaboration.
Youth and experience
A key problem that this young and rapidly expanding sector faces is that growth is outstripping capability in core operational areas. In particular, some renewable buyers are still building up their core skills when it comes to supply chain management and procurement. Creating effective in-house procurement teams and supplier networks is not a simple task.
Oil and gas have been doing exactly that for decades. This allows many buyers to pick from a pool of local suppliers who have all been certified. This creates flexible, agile supply chains that can act proactively instead of simply being reactive.
For both buyers and suppliers looking to benefit from renewable energy opportunities, market visibility is important for creating supply chains that work. This is where we come in. Achilles Live is the perfect opportunity for oil and gas companies to meet with leading renewables and utilities organisations in a face to face setting. We give buyers the most effective way to select suppliers for renewable energy tenders. In a maturing and important sector like renewables, we help companies upskill, share knowledge and collaborate with their peers.
In short, we can help renewables companies learn the right lessons, and turn them into insight that makes for better supply chains, and better growth.
The renewable energy sector is on the verge of a period of huge growth, but it shouldn’t view itself in isolation. In order to effectively overcome the challenges they face, renewables firms will need to learn from and work with the oil and gas industry.
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