Wind supply chain is under transformation
Wind turbine supply chain is currently under transformation driven by declining margins across the value chain. Turbine OEMs are facing pricing pressure from asset owners and competition which is getting passed onto supply chain players. For example, out of the top 5 western turbine OEMs who account for >75% of installations, only one was profitable in 2020.
Despite the challenges, turbine OEMs need to invest in next generation of turbine platforms to ensure that the cost of energy from wind is competitive against solar/natural gas. To address the issue, Turbine OEMs are looking for strategic Tier 1 partners with strong financial and technical capabilities, who can share R&D and global footprint CAPEX with the OEMs.
Need for partner with strong technical capabilities
In this decade, turbine OEMs are expected to scale up their turbines towards 8 MW in onshore and 20 MW in offshore. This will require products which are modular, scalable, and digitally enabled to support variety of turbine platforms. Further, fundamental innovations e.g. at material level will be required to manage complexity and sustainability goals of turbine OEMs.
Need for partner with a strategic footprint
Turbine OEMs are looking for global partners who can help them localize supply chain in new geographies. India is emerging as an export hub for turbine OEMs driven by need to diversify beyond China and gain potential cost advantages through Tier 2, Tier 3 supplier localization. Additionally, turbine OEMs will need localization partners towards 2030 in offshore wind geographies covering US, Taiwan, Vietnam and Far East, as the volumes scale up.
Supply chain players are at a crossroads
Considering that the wind installations are now consolidated among top 4-5 turbine OEMs, their volumes will get directed to a few system suppliers, driving further consolidation within supply chain. This puts supply chain players at a crossroads where they need to make strategic choices regarding their position in future landscape of wind supply chain.
Additionally, the margin pressures are expected to continue in near term driving need to expand into high value segments. There are potential options exist- 1) Expand into wind services wherein profitability (>20% EBITDA) is much higher compared to product segment (<10% EBIDTA). There are opportunities in turbine lifetime extension, retrofit and upgrades, digital asset management. 2) Expand into high growth sectors adjacent to wind. These include renewable hybrids, energy storage (short and long duration), green hydrogen, electrification and grid infra.
MEC+ can catalyse growth of supply chain players
Wind supply chain players need four strategic tools to win in the market:
a. Technology Innovation Roadmap
b. Geographical Footprint Roadmap
c. Services and Digital Roadmap
d. New sector growth Roadmap
MEC+ has deep expertise in the wind supply chain and supports companies in crafting their growth strategy towards 2025 and 2030 across all four dimensions.
Our offerings in India include:
STRATEGY AND SALES PLANNING
- Account plans – per country and Bid support
- Demand Validity and investment case for expansion/reduction
- Investor Identification and pitches
- PMO support for product management and planning
- Organisational skill planning
- Technology and product outlook to meet customer needs/ Extension of technology into new areas in wind
- Improving value proposition to customer
- Commercial potential of new projects/technologies
- R&D setup
- Modularisation and IP driven strategy for technology investment
COST OPTIMISATION AND FOOTPRINT
- Landed cost analysis across various geographies
- Supply chain optimisation
- Financial model for setting up different production concepts
- Identification of relevant sites and targets to kick off production
- Regulatory and tariff clarity
- Tools benchmarking
India market entry for wind supply chain player
Facilitating entry into new sectors beyond wind energy
“Well done. This is spot on and approved! Thank you for yet another job well done.”
VP, Wind Supply Chain Player
“And the process I experienced was very pleasant with you having a “can-do-attitude” and a service-oriented mindset. I will use MEC+ again, on small day-to-day enquiries as well as larger projects.”
VP, Wind Supply Chain Player
“This is perfect! You are always responsive and dependable. Highly appreciated! Thanks a lot!”
CXO, Wind Supply Chain Player
“MEC+ is a trusted knowledge partner.”