Offshore wind supply chain to exceed demand for the next decade

January 14, 2012 - LONDON In relation to the renewable energy industry is news that the utility giant RWE has announced its plans to invest €5bn in both the UK and Poland. There is also to be an additional €1bn investment in offshore wind developments in the German North Sea.

The news confirms Germany’s commitment to switch off all 17 nuclear reactors in the next 10 years as a reaction to the Fukushima disaster from 2011 proving once again that the renewable energy sector and more specifically the offshore wind industry is rapidly turning into a profitable business.Many companies are already hoping to get their share of the significant investment RWE is planning to make in the renewables sector by winning key long term contracts with the company in 2012 and beyond. Given the shutdown of the German Nuclear industry, many manufacturers in the country who now supply parts or services to nuclear plant developers and operators will soon be short of business, and looking for new opportunities such as that which the RWE investment represents.

Furthermore, other industries such as the oil and gas or aviation industry are also looking to enter the offshore wind market and according to the EWEA ‘’the supply of offshore wind turbines will meet and exceed demand for the next decade, leading to healthy levels of competition within Europe with the potential for export to emerging North American markets’’.

With new players constantly entering the offshore wind market, the competition for the procurement managers’ attention will become increasingly harder to achieve leaving the least adapted companies out of business. With more businesses offering supply chain products and services in 2012, knowing exactly what procurement managers are looking for will be a critical factor for companies’ survival in the market.

To address these issues, the 2nd Annual Offshore Wind Supply Chain Conference taking place in London this February 28-29 is bringing leading contract and procurement managers from Europe’s main utilities to discuss their selection criteria for choosing supply chain partners for the next round offshore wind projects. RWE is presented by Mr. Bjoern Przygodda, Head of Procurement, Offshore and Mr. Thierry Aelens, Head of Projects & Operations, Offshore who will be giving some vital insight about the RWE offshore experience and the main factors they will be looking for in their current and future business partners across Europe.

With more than 150 C level executives attending the event last year and even more expected to join this year, the 2nd annual offshore supply chain conference is the largest, most important business to business gathering entirely dedicated to offshore wind supply chain industry matters in UK and Europe. source: www.renewableenergyworld.com

Moving Jobs Offshore Becoming 'Harder to Justify'

Economic conditions, natural resources and technological innovation are making it harder for manufacturers to "justify moving jobs offshore," according to a new report by Reynders, McVeigh Capital Management.

Three drivers are responsible for "breathing life back into manufacturing," according to "Workforce Rising: Why U.S. Manufacturing is Poised for a Comeback," authored by Charlton Reynders and Patrick McVeigh.Offshoring to Homeshoring
Companies are turning from offshoring to homeshoring as the cost advantages of moving production to China and other locations become less significant. The wage gap between China and the U.S is shrinking, the report notes. Wages in China are rising at a predicted 15% to 20% annually while U.S. wage rates are growing at only 2%.

Higher oil prices have pushed transportation costs dramatically higher, the report notes. "By reallocating resources to the U.S., companies can reduce the distance to the point of sale and eventually benefit from more accessible, cheaper fuel in domestic natural gas," the report states.

Industries are adopting a more holistic view of production, according to the study, by using Total Cost of Ownership (TCO). TCO includes in cost evaluation "the burden of controlling quality and delivery, transportation, oil consumption, inspection of labor, inventory carrying, and freight and packaging." Companies that use TCO "find it is cheaper and more predictable to keep manufacturing close to home," the report states.

Resources Spur Momentum
Water stress is a global issue and the U.S. is well-positioned to address it. The report notes that the U.S. has the largest reserves of water on the planet. Moreover, there is "significant growth in domestic companies focused on conservation and desalination technology - both of which will be critical to augmenting the fresh water supply."

Natural gas, much of it coming from shale formations, could generate domestic supplies for 120 years. The report states this would not only help with transportation costs but also may give "U.S. manufacturing a competitive refooting, which will in turn stoke industrial demand." The report cites an estimate by PricewaterhousCoopers that natural gas investments could create 1 million U.S. manufacturing jobs in the coming 15 years.

Technology & Innovation
3D printing, also known as additive manufacturing, could "transform entire industries," the report notes. It may streamline manufacturing and make it more efficient by "vastly" reducing production liens and wasted material. The report argues that 3D printing could unleash a wave of innovation, with "millions of innovators in millions of garages - each with a 3D printer on hand."

While the report does not foresee a "quick fix" for U.S. manufacturing, it argues that manufacturing will return as "China struggles with growing infrastructure and the emergence of its middle class; as industries built around U.S.-based resources solidify; and as innovation brings production to new levels of efficiency."source: www.industryweek.com