An efficient logistics partner can not only secure competitive pricing for equipment at every stage of the project execution, but also suggest the most-efficient routing options
As India is waking up to the goal agreed upon under the Paris climate agreement – making renewable sources take up 40 per cent of power-generation capacity by 2030 – several engineering, procurement and construction (EPC) players in sectors such as solar and wind have started setting up projects in the hinterland. Equipment transportation in the renewable sector, especially solar, has emerged as a specialised service. The development is extremely encouraging for companies providing end-to-end logistics solutions because of the critical touch points involved in the entire journey of the shipment.
The need of the hour is to introduce super-specialised services, which can cover the factory-to-foundation chain. As renewable power producers are focusing on cutting costs, the logistics companies catering to this segment should concentrate on efficiency gains.
It makes good business sense for the logistics players to foray into this space since renewables, at a global scale, are poised to power ahead as world economies are rooting for a less carbon or carbon-free economy, following the Paris Climate Accord.
India, perhaps, has one of the largest renewable capacity expansion programmes running, with green energy sources projected to grow exponentially – to double the installed capacity of large wind power mills and a 15-fold increase in solar power generation – in the near-term. A draft note prepared by the Central Electricity Authority (CEA) projects that 57 per cent of the total power generation should come from renewable sources by 2027.
A major trigger for the soaring appeal for renewables, other than climate change concerns, is the sharp drop in project costs leading to competitive prices for grid-quality power generated by wind and solar plants. Technological disruptions have brought the cost of generation of renewables to near-parity with highly depreciated conventional sources. This has turned the tide in favour of renewables with investors flocking the sector. A pro-business policy infrastructure provided the much needed impetus.
As expected, the market-driven policies have turned the sector hyper-competitive, with firms scrambling to make efficiency gains throughout the project life-cycle. Logistics and associated costs are at the core of cost reduction and making efficiency gains. This has enhanced the relevance of renewable energy logistics from origin to destination. Solar panels, for instance, are sensitive in nature and mostly imported from China by countries all over the world. Transit requires special knowledge, skills and expertise. Companies handling these shipments need to have a fully-integrated data-driven approach to track the movement of equipment and inventory at each and every transit point. The increased visibility of the supply chain helps spot and cut hidden costs.
Crucial factors like custom clearance, transportation to the site, vehicles and route mapping can be cumbersome. Some of these sites are at rough terrains with extreme temperatures. An efficient logistics partner can not only secure competitive pricing for equipment at every stage of the project execution, but also suggest the most-efficient routing options. They know the specific requirements involved in handling delicate, high-tech products delivered at point and provide a single point of contact giving project developers the much needed peace of mind. They also have the domain knowledge for efficient handling of cargo at all stages of the project; from factory gate, through warehousing and delivering it at the project site.
On its part, the government could make the way forward easier for renewable energy logistics providers by fine-tuning the National Logistics Policy and rolling-out a single grid approach to integrate different modes of transport — rail, road, shipping, and aviation. This will optimise logistics cost and ensure efficiency gains.
There are lots of positive developments taking place in the renewable energy sector in India. The demand for such energy is also on the rise. It’s time for logistics companies to leverage these opportunities by enhancing resources and building relevant capabilities.
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About Siddhartha Choudhary
Siddhartha Choudhary is the head of Integrated Logistics Solutions at Allcargo Logistics. He has 15 years of experience in logistics and supply chain across the domains of in-land as well as ocean logistics.
Source: energy.economictimes.indiatimes
