Logistics in India - Opportunities & Challenges

Jignesh Patel, Vice-Chairman, HTOA
Jignesh Patel, Vice-Chairman, HTOA

India is firmly chasing its aspiration of doubling the installed wind power capacity by 2022. The ministry of new and renewable energy (MNRE) had revised the guidelines for onshore wind power projects a few months ago, which is expected to add to the momentum.

India ranks 5th in the world with an installed capacity of 80.46 GW (as on June 30, 2019) with a target of 175 GW by 2022. which is indicative of the untapped potential for not only equipment suppliers but also for the EPC companies and the logistics sector. The Indian Wind Energy Association has estimated that with the current level of technology, the ‘on-shore’ potential for utilization of wind energy for electricity generation is of the order of 102 GW.

Transportation and logistics impact wind project costs, turbine engineering
Transportation is a critical part of the logistics and cost structure of a wind project, and one of the reasons why most countries prefer moving to domestic manufacturing. The costs associated with transportation and logistics of large, heavy components of wind turbines, make it desirable for turbine and component manufacturers to set up shop as close as possible to the ultimate point of turbine delivery to enhance their price competitiveness. Transportation and logistics also is one of the main reasons why the ancillary supplier industry loves to work as a cluster close to the turbine manufacturing facilities.

Increasing size of components (blades, nacelles, tower sections) leading to more collaborative working

Longer blades, heavier nacelles, and tower sections of greater diameter require advanced planning on a project-by-project basis, and close co-ordination between transportation and logistics providers, turbine manufacturers, and the end-customers. Transportation and third-party logistics providers worldwide work closely with manufacturers to ensure that efficient and cost-effective solutions are made available. This is creating a collaborative network whereby efficiencies on both sides are seeing the bar being raised every day.

Blade

Challenges of transportation of wind turbines
Transportation and logistics for wind energy projects is a complicated process due to the massive size of the turbines, blades measuring 63 m long, generators and nacelles. Moving a 100,000 kg generator or a 63-meter blade is no easy feat, irrespective of the distance it has to travel. Transporting such massive pieces of equipment requires coordination with local transportation authorities and permits to transport oversized loads from different states.

Another challenge is finding drivers who have the qualification to pilot vehicles that can transport wind energy equipment. When importing or exporting wind energy parts and machinery, strict coordination between suppliers, project managers, freight forwarders and local authorities is imperative so that parts don’t sit at ports, wasting time and money.

Road Infrastructure
India’s patchy and incomplete road network is proving a challenge for the developers of wind farms, which is threatening the nation’s vision and plans for green energy. Even under the best conditions, moving the enormous towers and blades used in wind farms requires intricate planning and high expense. Individual blades on even modest turbines can exceed more than 100 ft each, while transporting the equipment and cranes needed for assembly can sometimes require roads to be widened or straightened.

In a bid to be a $3 trillion economy in which only 65% of roads are paved, is a huge challenge according to Bloomberg Intelligence. By comparison, wind developers in China have a much easier task, with almost 95% of its roads being paved.

Additional costs
Transportation adds nearly 8% to a project’s cost in India, according to the Wind Independent Power Producers Association. The cost per installation of 1 megawatt of wind is nearly Rs.6.5 crore, as per Bloomberg New Energy Finance estimates.

Right-of-way cost has gone up so tremendously that one spends Rs.50 lakh per megawatt just for the transport of equipment. Most wind turbines are typically comprised of a tower, two or three blades and a nacelle, which holds the turbine machinery. The blades and towers come in a variety of sizes, though most in use on land today generally range from 2 to 3 MW. Blade lengths can be 40m to as much as 57m, or slightly longer than an Olympic-sized swimming pool. The blades on the biggest wind turbines, which are built for offshore floating farms, can be as long as 80m.

Logistics in India

Opportunities outweigh challenges
In India, developers have been opting for 2-MW turbines with rotor diameters ranging from 80m to 114m. Transport trucks, sometimes requiring a 25-m turning radius, can often find themselves stuck on highways or squeezing through small towns marked by residential areas on either side of narrow roads.

Every project faces extra costs to fix roads, build bridges or make turns easier to navigate. If the access to project site is good, it is possible to see a reduction of nearly 5% in the total project cost, leading to lower tariffs.

The poor quality or absence of rural roads is another big challenge that transporters face. The shortage is so acute that ReNew Power Ventures, an independent power producer with a portfolio of wind projects in India across several states, took the opportunity to build many roads in rural areas since its inception in 2012 to support its projects.

The Sheer number of opportunities from increase in capacity from 80.46 GW as of June 2019 to a target of 175 GW by 2022 for logistics players is so huge that they should discuss and deliberate for innovation of new solutions and strategies and also collaborate with various equipment manufacturers for a cost effective solution which will give a win win opportunity to the equipment manufacturers and the logistics players.

Lifting & Specialized Transport, October-December 2019

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