Transportation costs take the 'wind' out of clean energy

The irony of wind as a clean, renewable source of energy is that the modern tools used to exploit it are less than sustainable. Researchers at the University of Arkansas are evaluating means to make these tools more efficient and sustainable.

In a new study examining transportation management of the developing wind industry, researchers in the Sam M. Walton College of Business contend that expansion of component manufacturing in the Western Hemisphere and further use of collaborative transportation management, an innovative logistics concept, will streamline the supply chain, promote sustainable business and environmental processes and improve companies’ bottom lines.

“As many people know, wind-generated power has been used in Europe for quite some time,” said Terry Tremwel, research director of the Supply Chain Management Research Center in the Walton College. “But recently, the United States has led the way by installing more wind capacity annually than any other country on earth. As of the end of 2007, the United States was expected to have installed more than 15,000 megawatts of wind-energy capacity, which has the potential to replace approximately 30 million pounds of carbon emissions per hour at full-capacity production.”

Tremwel and recent graduate Suzanne Ozment studied the complex process of transporting extremely heavy and large components of modern wind machines, some of which stand hundreds of feet tall and have a blade-sweep diameter equal to the length of a football field. Considering the weight and size of machine components, the authors argued that greater reliance on collaborative logistics, including communication and coordination between manufacturers and various transportation groups, will facilitate efficient and sustainable operations and ensure greater profits. Tremwel and Ozment also emphasized the importance of expanding manufacturing locations in or closer to the United States, where many wind-power projects are happening. Expansion of manufacturing in the Western Hemisphere will reduce costs, streamline logistics and possibly promote wind-power projects in other North American and South American countries.

“Expanding manufacturing locations closer to the United States will shorten the supply chain,” Tremwel said. “It will provide less expensive turbines to the country with the fastest-growing wind energy capacity. It will also allow companies to develop projects in countries where wind energy has not yet become popular.”

Clean and plentiful, wind has always been viewed as a viable alternative to conventional energy sources, but harnessing it has not been economically favorable. In recent years, however, technological innovations, including better machine components and overall larger units, have reduced the price per kilowatt-hour to a point at which wind is competitive with coal. And industry expansion will likely continue. Rising costs of conventional energy systems, increased concerns about global warming and climate change and governmental support of alternative energy sources propel further growth.

Despite wind power’s economic potential and environmental benefits, however, there are obstacles to growth. Technology has outpaced logistics and transportation. Moving wind machines has become a significant problem because of the excessive and unusual weight, length and shape of components, which include a tower, an in-ground base, blades and a turbine. For example, turbines, which are typically shipped as three separate components – the drive train, a generator, and a hub – all of which go inside the “nacelle” or enclosure and are assembled on site, can weigh between 22 and 90 tons, with an average weight of about 65 tons. The space required to transport a typical turbine is more than 1,900 cubic yards, roughly 13 times the volume of an ordinary tractor-trailer. Towers and bases are also exceptionally heavy. Blades are relatively lightweight but unusually long, some longer than 120 yards.

For these reasons, logistics and transportation are complex and extremely expensive. Entire projects, which can occupy hundreds of truckloads and railcars and many ships, require communication and scheduling between manufacturers and several types of transportation companies, including shipping, rail and trucking. In some cases, transportation expenses can be as high as 25 percent of the total cost of the machine component.

Tremwel and Ozment said the above constraints demand greater use of collaborative transportation management, a logistics process in which manufacturers, logistics companies, including port operations, share information, coordinate and integrate logistical functions and collaboratively design solutions to various challenges within the supply chain. The goal is to streamline the supply chain and thus reduce waste, inefficiencies and costs.

The authors focus on the Port of Longview in Washington as an example of collaborative transportation management in practice. The port designed a system that addresses issues of water-to-terrestrial transport by purchasing cranes that can move turbines from the dock directly to rail cars, thus eliminating the need to use trucks in that stage of the transportation process. By integrating information from turbine manufacturers, the port formed strategic alliances with rail and oversize trucking companies. The whole operation is a collaborative effort among port, rail carrier, trucking and manufacturing personnel.

The authors also found that simple geography is another obstacle to growth of wind power in the United States and Western Hemisphere. Because most wind farms were based in Europe – after initial sites in California – many component manufacturers are in European and Asian countries, primarily Denmark, Spain and India. With the revival of activity in the United States, transporting components from these countries to the United States is inherently inefficient and not optimal in terms of time, costs and environmental impact.

Tremwel and Ozment reported their findings in “Transportation Management in the Wind Industry: Problems and Solutions Facing the Shipment of Oversized Products in the Supply Chain,” which may be viewed by visiting the research center’s Web site at http://scmr.uark.edu/ .