With their eye only on deadlines wind companies have made a basic project management mistake, in pushing forward with a Wind Rush, to build out as many projects as possible, to collect tax credits, issues with supply chain, transportation and logistics were not considered.
More than $2.1 billion in turbine sales and PTC payments are in jeopardy.
January 09, 2019 | Mike Munsell | Greentech Media [Excerpt]
Unforeseen supply chain bottlenecks could lead to project cancellations and postponements. This could put as much as $2.1 billion of revenue at risk, according to a new study by Wood Mackenzie Power & Renewables.
“Between 2019 and 2020, we anticipate strong growth in wind energy installations as the industry rushes to meet deadlines for U.S. Production Tax Credits (PTCs),” said Dan Shreve, head of global wind research at Wood Mackenzie Power & Renewables. “However, increased demand for transportation capacity due to growth in partial repowering activity, logistics requirements, and competition from other industrial sectors could severely hamper the transportation segment’s ability to ship components.”
“These supply chain constraints will escalate deployment risks for all wind energy participants — increasing the likelihood of higher costs, missed deadlines, lost production, and fewer PTCs if projects can’t be commissioned in time.”
According to the analysis, if these supply chain constraint issues are not addressed, more than 23 percent of the wind energy capacity installations expected in 2019-2020 could be delayed or canceled.