Offshore and onshore wind play an important role in this renewables energy mix and recent figures prove that to be the case – in one three-month period, wind power contributed 18.5 per cent to UK electricity generation and in a three-day period recorded soon after, the country was powered solely by renewable energy.
Wind power sits alongside others, such as biomass, hydroelectric, solar and geothermal, and, with the sector in relative infancy, evolution is a given.
Understanding the nature of this innovative and changing sector will put any business on the front-foot when it comes to ensuring it can diversify its offer to achieve market success.
There will be many out there who have the ability and vision to make their existing businesses the ‘perfect fit’ to serve this sector but are perhaps unaware of what may be required to make that happen.
The renewables projects we see today have a ‘cradle-to-the-grave’ life cycle with different needs for each of the four stages of their existence. Taking the different types of energy generation into consideration, let us guide you through that cycle and identify some of the supply chain and other associated opportunities.
Large multi-national companies are leading the renewable energy charge, winning permissions from the relevant authorities including The Crown Estate to ‘develop’ the seabed, and green and brownfield sites.
With that comes the need for consultations and the specialist surveying of the location. Any such work involves the specialists themselves, who will all require accommodation and facilities close to the development sites of larger scale projects.
Stage 1 work will often take place before further permissions are even sought, as will details around tariffs, accreditations and project finance that may involve partnership agreements and joint ventures.
Renewables projects will require detailed planning requirements, including change of use, extensive community consultations and often complex environmental impact assessments.
Here is where the supply chain will be vast and varied and offers the perfect opportunity for organisations to review their operations and look at what they can offer.
Storage, factory space, warehousing, components and skilled people, who could be sourced by training and recruitment agencies, will be required. In short, the ‘nuts and bolts’ must be delivered efficiently, correctly and on-time. Expensive penalties and reputational damage could result through lack of delivery.
Getting the energy generated from source to sub-station involves extensive ground works with cable easement at the top of the list. Planning consents and agreements to access private land, archaeological surveys, and the construction and laying of the cables all present opportunities for companies and professional service firms. This filters down into the wider infrastructure with hotels, restaurants and transport/private hire firms benefitting.
All energy generation equipment and plants, from wind turbines to anaerobic digestion, require O&M – ranging from routine maintenance to unexpected repairs.
For example, on a wind turbine work required includes or involves rotor blades, gearboxes or generators. Breakdown problems could lead to a non-functional turbine or a reduction in energy generation and so quality of repair and maintenance to prevent incidents, along with speed of service, is paramount.
Is there an opportunity here for joint ventures between companies, which are equipped with skilled staff and the right components, to be a part of the supply chain?
There will also be existing businesses with transferrable skills that may consider they are large enough to go it alone or can expand.
The de-commissioning of large offshore wind farms surrounding the UK is more than one decade away and as yet there has been little detailed analysis.
However some of the UK’s onshore facilities are more mature and this matter is likely to be front of mind within this particular sector. Is it now time for businesses to be investigating how they can play their part?
Re-powering is a major consideration in renewables, with re-financing and new joint ventures vital for the future. For example, with the first-wave of EIS (Enterprise Investment Scheme)-funded anaerobic digestion plants, now reaching the end of their three-year term, those involved are considering future business models. With this comes decisions concerning re-financing and ownership which will determine how the life of these plants will continue.
Contracts, service level agreements and procurement procedures must be properly drawn up by professionals with the knowledge to look at the detail – relevant to your sector. That is of particular concern if you are part of a supply chain dealing with a large multi-national company.
The correct financial arrangements with public and/or private sector funders must be put into place. It would also be wise to seek the advice of a specialist tax adviser too, who will investigate any incentives that may exist for businesses and prospective partners.
Joint ventures will work well if they are properly organised and managed from the outset. Companies may need to collaborate to offer the best fit into a large offshore or onshore renewables supply chain, but a failure to manage the joint project effectively or a lack of clarity over contracts will put both parties at risk. Water-tight service level agreements are vital.
Safety and competency is paramount across the industry, making the upskilling, recruitment and retention of good quality staff essential. Ensuring the correct safety and training certificates are in place for offshore and onshore work is a prime example. It is wise to identify any opportunities to upskill an existing workforce while considering things like the Apprentice Levy and how it may help a business with its staff development.
New policies and procedures may be needed if a business is diversifying or upskilling its staff. Any expansion to service the renewables sector may require changes to contracts, or a need for self-employed contractors. Brexit brings with it changes to the employment of workers from EU countries and legal advice is recommended.
Expansion more often than not leads to new or extended premises – often leased or rented. Contracts must be precise and correct, and planning permissions may be required, along with variations of terms and conditions.
Submit an enquiry and one of our team of experts will be in touch as soon as possible to discuss your needs.
Or call the energy & renewables team on 01522 515936