Perfect storm of supply chain and labour pressures threatens wind project viability, new report warns

New research surveying 650 wind energy component manufacturers and wind-farm operators across 13 countries reveals that the sector is navigating increasingly tight profit margins and rising operational expenditure (OpEx). As a result, projects are facing delays and, in extreme cases, cancellations across key markets.  

Supply chain disruptions were revealed as a key challenge to the industry on a global scale, with 77% of total respondents reporting that disruptions have directly damaged project profitability in the past 18 months. This is most prominently seen in the UK, where the figure rises to 90%.  

“Unfortunately, we’ve already seen the knock-on effect of these pressures materialise in high-profile cancellations like Hornsea 4 and Ørsted’s Ocean Wind projects,” said Sherif Megeed, Group Executive Vice President, Jotun Performance Coatings at Jotun. 

“Geopolitical instability is forcing operators to fundamentally restructure their supply chains, and this is presenting a substantial threat to the industry’s ability to deliver on wider decarbonisation goals. Nearly two-thirds of survey respondents agreed that current supply chain constraints are directly threatening their ability to deliver on national and regional energy security goals, however, there is little consensus on how to mitigate these challenges.” 

The findings vary by market. In Germany and Denmark, supplier consolidation was the preferred response (38% and 32% respectively), reflecting a more centralised approach to managing risk, whereas simplified application of coatings to reduce labour hours was the top response in Taiwan (36%) and Spain (32%). 

The report, which also features insights from a series of interviews with global industry experts, highlights a sizable debate around the growing skills gap in the industry and harnessing legacy experience from the offshore oil & gas sector to fill these gaps. Although 80% of survey respondents said that their projects are impacted by the shortage of skilled labour, only half (52%) of offshore operators think the wind industry should aggressively recruit from the more established sector. 

As a result of these logistical and workforce challenges, the research reveals that the wind industry is evolving its focus to design assets to be virtually maintenance-free, helping to ensure long-term profitability. Two in three (67%) say that reducing the frequency of maintenance shutdowns is their primary strategy for maximising energy output. 

Jakob S. Diget, Global R&D Manager for Energy at Jotun, said, “Maintenance can be one of the highest costs to an operational wind farm, particularly for offshore, which is considered a harsher and more expensive environment. While these challenges are significant, our research also reveals a hidden challenge facing the onshore market, as projects grow larger and operators face scaled maintenance challenges. Maintenance should not be neglected onshore, despite being less challenging than offshore environments.” 

The survey revealed that unplanned spend, particularly for coatings, is impacting onshore more than offshore-focused respondents. More than half (55%) of onshore respondents reported that unplanned coating degradation in harsh environments has impacted their initial budgets, compared with 39% in offshore. 

Jakob S. Diget continued, “Regardless of whether a project is onshore or offshore, improving maintenance operations is critical to ensure the profitability of wind projects.”  

“By choosing the right coatings and technology, we have seen savings of up to seven coating application days, and 65% less time spent on coating works per offshore foundation. Faster application, fewer bottlenecks and less rework, in combination with longer and more reliable coating lifetimes, help customers reduce project risk at a time when every delay and unplanned maintenance event affects the economy and the sustainability of the industry.”

For further information or to get the full report, please contact:

Heine Stangeby
Global Communications Specialist, Jotun Performance Coatings
heine.stangeby@jotun.no