Renewable Energy Benefits:

Leveraging Local Industries

12th Meeting of the IRENA Council

November 2nd 2016

Renewable Energy Benefits:

Leveraging Local IndustriesOnshore Wind

2013

2015

2014

2016

2014

3

Activities and tasks for wind deployment

4

Project planning

Site selection Feasibility studies

Engineering design

Project development

2 580 human-days of labour for the planning of a 50 MW wind farm

70% labour

requirements

Equipment: resource assessment instruments, simulators, computers, software, CAD tools

Information: soil characteristics and the climatic features, policies and regulations

Legal, energy regulation, real

estate, and taxation experts

Financial analysts

Logistic experts

Engineers

Environment & geotech

Health & Safety

5

Manufacturing and Procurement

Onshore wind turbine cost breakdown

Component% of total investment of

wind farm

Wind Turbine 64% – 85%

Tower 16% - 18%

Rotor Blades 13% - 15%

Rotor Hubs 0.8% - 0.9%

Rotor Bearings 0.7% - 0.8%

Main Shaft 1.2% - 1.3%

Main Frames 1.7% - 1.9%

Gearbox 7.8% - 9.7%

Generator 2.1% - 2.3%

Yaw System 0.76% - 0.84%

Pitch System 1.6% - 1.8%

Power Converter 3.0% - 3.4%

Transformer 2.2% - 2.4%

Break System 0.8% - 0.9%

Nacelle Housing 0.8% - 0.9%

Others 7.7% - 8.5%

6

Manufacturing and Procurement

19 000 human-days to manufacture main components of 50 MW

Nacelle Blades Tower Monitor and control system

50% labour

requirements

Factory workers

Health and safety

Logistics

Quality control

Marketing and sales

EngineersAdmin Management

600

14010

2.5

1

Concrete Steel Fiberglass Plastic Copper Aluminum

7

Manufacturing and Procurement

Materials to manufacture and install a wind farm (tonnes/MW)

8

Manufacturing and Procurement

Materials to manufacture main components of a 3 MW turbine (tonnes)

Nacelle Blades Tower

Steel Aluminum Copper Fiberglass Concrete

6.7

1.2

75175

3.6

1.1

53.7

9

Transport

Manufacturing blades and towers close to project sites to minimize transport costs in the US

10

Transport

Truck drivers

Crane operators

Admin

Logistic experts

Regulation experts

Technical personnel to

supervise loading

875 human-days to transport main components of a 50 MW wind farm over 300 miles

USD 750 000 to transport main components of a 50 MW wind farm over 300 miles

11

Installation and grid connection

Site preparation and civil works

Assembling equipment

Cabling and grid connection

Commissioning

34 500 human-days required for the installation and grid connection of a 50 MW wind farm

50% labour

requirements

Equipment: found in the construction sector

Construction workers and

technical personnel

Professionals managing

cranes, trucks, etc.

Engineers and construction

foremen

H&S

EnvitonmentLogistics Quality control

12

Operation and maintenance

Onshore wind O&M cost breakdown

Component USD/MW/year % of total O&M cost

Wind turbine

maintenance20 100 – 24 500 47.6% - 49.3%

Electrical installation

maintenance1 100 – 1 300 2.6%

Insurances 7 500 – 9 800 18.9% - 18.4%

Land rental 4 000 – 6 000 11.7% - 9.8%

Management and

administration8 100 – 9 900 19.2% - 19.9%

Total 40 800 – 51 500 100%

2 665 human-days per year required for the O&M of a 50 MW wind farm

Management

Engineers

OperatorsCivil workers, technicians

Legal and regulation

EnvironmentAdmin

H&S

Telecomm

13

Decommissioning

8 400 human-days needed for the decommissioning of a 50 MW wind farm

Planning the decommissioning

Dismantling the project

Disposing/recycling the equipment

Clearing the site

74% labour

requirements

Engineers Environmental experts

Logistic experts

Technical personnel and civil workers

Lorry drivers and crane operators

Health and safety experts

Equipment: found in the construction sector

Renewable Energy Benefits:

Leveraging Local IndustriesSolar PV

2013

2015

2014

2016

2014

15

Activities and tasks for solar PV deployment

16

Cost breakdown of solar PV plant

Inverters 10%

Modules30%

Balance of System (BoS) 60 %

Detailed breakdown of solar PV BoS costs by country, 2015

(2015 USD/kW)

Source: IRENA (2016), The Power to Change

17

Project planning

Site selection Feasibility studies

Engineering design

Project development

2 120 human-days needed for the planning of a 50 MW PV plant

60% labour

requirements

Equipment: resource assessment instruments, simulators, computers, software, CAD tools

Information: climatic features, policies and regulations

Legal, energy regulation, real

estate, and taxation experts

Financial analysts

Logistic experts

Environment

Health & Safety

Engineers

18

Manufacturing and Procurement

14 000 human-days to manufacture main components of 10 MW

Solar cells Modules Inverters Structures and trackers

50% labour

requirements

Factory workers

Health and safety

Logistics

Quality control

Marketing and sales

Engineers

Admin & Management

Standardisation experts

19

Manufacturing and Procurement

0

50

100

150

200

250

Glass Steel Concrete Aluminium Silicon Copper Plastic

Materials to manufacture and install 1 MW of PV (tonnes/MW)

ton

nes

/MW

20

Transport

Truck drivers

Loading staff

Admin

Logistic experts

Shipping experts Quality

control

70 human-days to transport main components per 1 MW of solar PV over 100 miles

Cost of freight shipping can be estimated at average of USD 0.10 - 0.20 per tonne-mile

21

Installation and grid connection

Site preparation and civil works

Assembling equipment

Cabling and grid connection

Commissioning

40 000 human-days required for the installation and grid connection of a 50 MW PV plant

50% labour

requirements

Equipment can be found in the construction sector

Construction workers and

technical personnel

Engineers and construction

foremen

H&S

EnvironmentQuality control

22

Operation and maintenance

Onshore wind O&M cost breakdown

Component USD/MW/year % of total O&M cost

Maintenance 10 000 – 22 00041% - 52%

Land rental 8 000 – 12 00028% - 33%

Insurance 4 000 – 6 400 15% - 16%

Management and administration

2 500 – 3 0007% -10%

Total 24 500 – 43 400 100%

1 600 human-days per year needed for the O&M of 10 PV plants in one country

Management

Engineers

Operators

Civil workers, technicians

Legal and regulation

Environment AdminH&S

23

Decommissioning

Planning the decommissioning

Dismantling the project

Disposing/recycling the equipment

Clearing the site

60% labour

requirements

Engineers

Environmental experts Logistic

experts

Technical personnel and civil workers

Truck drivers & operators

H&S

Equipment: found in the construction sector

5 150 human-days needed for the decommissioning of a 50 MW PV plant

24

Recommendations

Research and

innovation

Strengthening firm-

level capabilities

Value is created along all the segments of the value chain

•Project development, site preparation and civil works offer opportunities

•Manufacturing locally can be driven by other factors

Strategy should be aligned with country overall objective

•Aligned with urgency of deployment and other support instruments

•Considering level of competition in the local, regional and global markets

Localisation should leverage on existing industries

•Existing resources such as skills, materials and equipment should be utilised

• Information needed should be made available to project developers

Mix of policies needed for an enabling environment

•Set targets and stable deployment policies ensure long-term demand

•Policies and measures to provide skills and strengthen local firms (quality standards and specifications, codes and trainings)

Thank you!