The renewable energy industry is undergoing extraordinary growth across the globe, driven by international commitments to combat climate change and adopt sustainable energy solutions. Countries around the world are investing heavily in renewables, with various regions implementing ambitious policies and programmes to reduce carbon emissions and transition to cleaner energy sources.

These efforts are driving up the demand for renewable energy projects – such as wind, solar and battery storage. Yet the supply side of the equation may not be equipped to keep pace. Supply chain issues represent an existential threat to the timely achievement of these targets.

This blog is the beginning of a series where we explore the hurdles that you, as renewable energy project owners and developers, face and offers tips to maximise the value of your asset. Whilst this blog focuses on the renewable energy landscape in the U.S., the lessons learned are globally applicable.

Understanding supply chain challenges

An efficient and reliable supply chain is the backbone of successful renewable energy project delivery. Balancing that tension between the drive for the lowest cost and the need for optionality is more of an art than a science and, if managed poorly, can lead to significant project setbacks.

Geo-political exposure

A significant portion of the U.S. renewable energy supply chain currently depends on foreign manufacturers, especially for major components like solar panels, wind turbines, inverters and batteries.

For example, China supplies solar PV and BESS equipment directly to most global markets, and the U.S. imports two-thirds of its PV modules from Southeast Asia. This reliance creates multiple supply chain vulnerabilities for projects, including:

• Global political conflicts
• Trade restrictions
• Supply disruptions
• Quality concerns
• Economic dependence

Mitigating these risks requires diversifying supply sources and developing more localised and resilient supply networks.

Domestic politics

Local and international political climates play a crucial role in supply chain stability. Changes in trade policies, tariffs and regulatory environments can impact the availability and cost of critical materials.

Key political factors that can influence renewable energy supply chains include:

• Policy changes
• Regulatory hurdles
• Infrastructure development
• Labour laws and workforce policies

Navigating domestic political landscapes is not a one-time task. It necessitates continuous monitoring and engagement with policymakers to advocate for supportive and stable regulatory environments. Project owners and developers in North America often find this advocacy support through active participation in industry associations, such as American Clean Power, the Canadian Renewable Energy Association, and the Solar Energy Industries Association.

Building resilience into your supply chain strategy is crucial to ensure it can withstand unforeseen changes in political climates, even with advocacy to influence domestic political factors.

Material shortages and shipping delays

The global supply chain has been strained by material shortages and shipping delays, exacerbated by the COVID-19 pandemic. Disruptions like these can cause delays in project timelines and result in cost overruns, creating pressure on project owners to seek alternative solutions. If these alternatives exist, they are often cost-prohibitive unless they have been adequately planned for in advance.

Global supply chains are inherently susceptible to disruptions from material shortages and logistical challenges. Examples include:

• Pandemic restrictions
• Natural disasters
• Transportation bottlenecks
• Demand surges

Addressing these challenges involves more than just acknowledging them. It requires a comprehensive approach, including developing robust contingency plans, diversification of supply sources, and investment in advanced logistics management systems. This comprehensive approach is essential to enhance supply chain resilience during disruptions.

Supply chain challenges represent material risk exposure for renewable energy projects, affecting operational and financial results, timelines, costs and feasibility. Delays due to supply chain challenges can lead to increased costs and may even jeopardise the project’s feasibility altogether.

Four strategies to optimise your supply chain

Meeting supply chain challenges requires a multifaceted and proactive approach. The following strategies endeavor to optimise your supply chain and help ensure a successful project.

1. Combine local market knowledge with global approaches

A thorough understanding of local markets is essential for managing supply chain challenges, as regional differences and the importance of relationships should never be underestimated.

Simultaneously, harnessing global experience enhances one’s ability to innovate and optimise project delivery and operation. Success in technology supply chains like wind, solar, and storage is not just about purchasing equipment but also forming strategic, long-term relationships with global suppliers.

These relationships allow for the exploration of both commercial and technical innovations, enabling the delivery of first-of-a-kind projects and mitigating cost increases due to global events. The combination of local knowledge and global experience fosters transparency, drives proactive solutions, and unlocks the innovation needed for supply chain optimisation.

2. Invest in local supply chains

Strengthening local supply networks is another key strategy. In addition to global supplier relationships, project owners can reduce transportation costs, avoid delays, and support local economies by sourcing materials and components from local suppliers. This approach also builds resilience against international supply chain disruptions.

During the construction of a 26-turbine wind farm in Alberta, Canada, RES collaborated with the local supply chain to address material and labour needs. As a result, an estimated 150 jobs were provided to local Alberta contractors and suppliers.

3. Build strong supplier relationships

Creating and maintaining resilient partnerships with suppliers is critical to sustainably de-risking the supply chain. Long-term relationships with trusted suppliers can lead to better communication, more favourable terms, and greater flexibility in times of crisis. Collaborative relationships also encourage innovation and problem-solving when or before challenges arise.

For instance, a RES project team recently had the responsibility of revamping and upgrading key components in four active solar parks. Leveraging RES’ worldwide purchasing influence and supplier connections, the team successfully acquired all the necessary parts for the project, despite major supply chain disruptions.

4. Utilise advanced technologies

Implementing advanced supply chain management technologies can provide greater visibility and control over the supply chain. Furthermore, as asset owners and managers deal with a rising volume of data from different sources, it’s crucial to leverage new innovations and tools to thoroughly analyse this data, standardise and automate processes, and obtain a comprehensive, unbiased view. This will improve asset performance and minimize downtime or repairs that introduce supply chain exposure during operation.  

Tools like predictive analytics, AI-driven forecasting, and blockchain can help project owners anticipate disruptions, optimise inventory management, and streamline logistics before they impact project timelines and costs. For example, a large wind farm operator in Washington used RES’ Anemo Analytics to identify critical optimisation opportunities that enabled them to make adjustments that improved turbine performance and efficiency, resulting in reduced turbine failures and less dependence on the supply chain.

Staying agile in a dynamic industry

Supply chain challenges are inherent in the renewable energy landscape, but they don’t have to be insurmountable. By understanding the risks, planning strategically, and leveraging technology, renewable energy project owners and developers can navigate these challenges and ensure the long-term success of their projects.

As the industry grows, staying agile and resilient in the face of supply chain disruptions will be vital to sustaining the necessary momentum while protecting your asset.

Interested in learning how RES can help you maximise the value of your renewable energy project? Connect with us today!