The Needy Green: Renewables Pressure the Supply Chain
It seems the grass is greener on the other side of…time. Aggressive sustainability tactics may be the future of the supply chain industry, as many green energy measures are picking up momentum, and revolutionizing the industry’s energy buying tendencies in possibly drastic ways.
Typically, renewables have not found success outside of federal incentives. Supply Chain companies, for the most part, do not take the measures to invest in green energy because thus far the investment costs have not demonstrated quantifiable improvement in relation to traditional fuels.
However the rising cost of gas has supply chain managers willing to take new measures to reduce the fiscal toll oil has on the transportation of their goods. In addition, global environmental concerns have created a flurry of demands including new regulations, shareholder pressures and public opinions which could push the entire supply chain industry to adopt greener measures.
Overall the lower prices of natural gas are an attractive alternative to burdensome oil costs, but some measures need to be taken on the part of renewable companies to better accommodate the pricing needs of supply chain managers.
Out of all the renewable sectors, wind projects will need to reduce costs the most—experts predict a whopping 35 percent—in order to compete with emerging natural gas options. And renewable energy developers will need to think about keeping costs low from the get-go, establishing only projects and sites that deliver the lowest bottom line—ultimately cutting down their overhead and passing the savings along to their future costumers.
Renewable energy expert Barbara Sands explains how cheap and affordable natural gases are in comparison to oil,, “"Natural gas prices would need to almost triple from the current levels of less than $3.00/MMBtu for renewables to begin to be competitive on a total cost per MWh basis," she says.
On the manufacturing end, the supply chain industry is going to start judging equipment manufacturers who do not improve their performances and reduce the cost of producing their equipment. Nothing motivates like narrowed eyebrows. This means manufacturers too, should jump onboard—or ship, or train, or plane—in utilizing green energy fuels.
Overall, supply chain managers of all types need to start budgeting renewables into their financial plans, as their increased attention and use of these markets will only encourage the affordability and practicality of these revolutionary options.