Accelerating Growth & Competitive Advantage In Wind Energy Through Digitalisation

Governments are striving to meet their commitments to the 2015 Paris Agreement on Climate Change taking steps to reduce greenhouse gas emissions and...

<small>ACCELERATING GROWTH & COMPETITIVE ADVANTAGE IN WIND ENERGY THROUGH DIGITALISATION

<br>Discussion Paper <br>In Partnership With

THE APPETITE FOR RENEWABLE ENERGY

PRESENTS A SIGNIFICANT OPPORTUNITY FOR WIND POWER

THE APPETITE FOR RENEWABLE ENERGY PRESENTS A SIGNIFICANT OPPORTUNITY FOR WIND POWER

Governments are striving to meet their commitments to the 2015 Paris Agreement on Climate Change taking steps to reduce greenhouse gas emissions and limit global warming to less than 20C. Significant progress is already being made.

According to a Forbes article, in the first half of 2020, for the first time, EU member states generated more power from renewable sources than fossil fuels and across the world strong commitments are being made to renewable energy initiatives including Wind, Solar, Battery Storage, Fuel Cell and other renewable energy sources.

Industry is also taking steps to drive towards a Carbon Neutral position, through their own initiatives to reduce their carbon footprint as well as offsetting this using sustainable power sources. It is projected that through demand, the Wind Generated Power capacity will grow almost fourfold by 2030.

However, desire alone will neither ensure nor accelerate the growth of the Wind Energy Market. With most parts of the world experiencing an energy surplus, Wind Turbine Manufacturers and Wind Farm Operators have to ensure they are competitive, not just with traditional power generation, but with other sustainable sources.

The need to compete is driving continuous transformation across every part of this industry and in the coming pages we will explore some of the macro and micro factors driving change and the role that L&T Technology Services is playing in supporting the Wind Power industry.

BY 2030 TOTAL INSTALLED WIND CAPACITY IS ESTIMATED TO BE 2,015 GW

IN 2018 TOTAL
INSTALLED WIND
CAPACITY WAS 565 GW

Source: IRENA – Future of Wind

COMPETITIVE ADVANTAGE IS

DEPENDANT ON COST EFFICIENCY

COMPETITIVE ADVANTAGE IS DEPENDANT ON COST EFFICIENCY

The fundamental factor in the accelerated growth of Wind Energy is the ability of the industry to continually drive down the cost per kWh. With the removal of many subsidies, it will be those Wind Turbine manufacturers who are able to accelerate cost reduction that will gain the competitive advantage and become the partner of choice for Wind Farm operators. The cost differential has to be considered from two perspectives.

CLOSING THE GAP ON TRADITIONAL METHODS

Whereas Governments and Industry are striving to utilise renewable energy sources, this does not come at any cost. The switch to renewable sources will only be accelerated if these sources are close in comparative terms to the cost of traditional non-renewable sources.

COMPETITIVE WITHIN RENEWABLE SOURCES

Advancing solar technology is driving down the cost of this energy source alongside continued innovation and development of other renewable sources; the adoption of wind power is dependent on it being competitive and complementary to other renewable sources.

To achieve the cost points projected for 2030 of between $0.03-0.09 kWh and then continue to hit a projected cost point of between $0.02-0.07 kWh in 2050, will require greater efficiencies across the full lifecycle of wind power generation.

2010

$0.08kWh for Onshore$0.16kWh for Offshore

2018

$0.06kWh for Onshore$0.13kWh for Offshore

2030

$0.03-0.05kWh for Onshore $0.05-0.09kWh for Offshore

Source: IRENA – Future of Wind

THE CRITICAL FACTORS

IN DRIVING DOWN COMPETITIVE COSTS

THE CRITICAL FACTORS IN DRIVING DOWN COMPETITIVE COSTS

In order to hit projected price points and ensure that Wind Power is not only desirable, but offers commercial advantages requires that the industry addresses critical factors across the end-to-end value chain.

Speed and quality of innovation is key to advance the efficiency of this power source, while driving down costs across manufacturing and services to gain competitive advantage.

Reducing your time to market for Innovative Technology is key; not only achieving the desired efficiencies of the next generation of Wind Turbines, but ensuring quality, economical manufacture and improved maintainability

Shortening the test cycle and approval process is critical and requires the adoption of virtualised testing and effective digital simulation across every stage of the product lifecycle.

Creating an efficient manufacturing process that is able to generate the required economies of scale, drives down costs across the full supply chain and ensures the quality and reliability of your complete product.

Enabling highly efficient and effective after-sale services that adds-value in ensuring the reliability of in-life equipment and optimises its performance to produce the power output required in line with demand.

The success of the Wind Energy Industry is dependent on the speed at which it can learn from longer established sectors and quickly adopt best practice across every aspect of the product development and manufacture lifecycle.

THE KEY TO SUCCESS

IS MODULARISATION, DIGITALISATION & HYBRIDISATION

THE KEY TO SUCCESS IS MODULARISATION,DIGITALISATION & HYBRIDISATION

We believe there are two macro-factors that will define the evolution of the WindEnergy industry and these are modularisation and digitalisation.

The ability to follow in the path of other industries like automotive and aerospace in modularising design and driving efficiencies across the value chain through a digital thread that spans the entire product lifecycle and leverages digital twins.

MODULARISATION

Modularisation delivers two significant advantages; it enables economies of scale across every part of the product lifecycle by utilising common components across different wind turbine designs and it moves the industry to a position where in-life equipment could potentially be upgraded to take advantage of new innovation.

DIGITALISATION

By creating a digital thread that connects all elements of the value chain, streamlining every step to both drive down costs, and accelerating speed to market. Through creating digital twins at each stage of product development and manufacture enables for the virtualisation of testing which is critical to support modularisation and effective feedback loops.

ACCELERATING INNOVATION

THROUGH MODULARISATION

ACCELERATING INNOVATION THROUGH MODULARISATION

The Wind Energy sector has grown rapidly and many of the leading players have scaled through merger and acquisition.

This inherently creates a fragmented R&D capability and potential silos which can slow down your innovation and escalate costs. At a time where funding is less readily available and there is growing pressure to accelerate innovation and streamline costs, embracing modularisation is key.

MODULARISATION

Modularisation enables economies of scale across the product lifecycle by utilising common components for varying turbine designs, so that current equipment can respond more quickly to new innovations. This can be achieved through the repetition effect, to reduce unit costs and increase the quality of what is being made.

Modularisation of product structures offers customers choice, while also allowing them to reuse sub-solutions across different products to improve time-to-market and maintain consistent product quality. By introducing these measures, organisations can achieve cost savings of up to 25 per cent in development, logistics and production, along with a 25 to 30 per cent reduction in time spent on getting a solution market.

HOW CAN WE HELP

• Provide a blueprint for Modularisation

•Ensure you have the right tool chain in place for conceptualisation, design, development & testing

CREATING A DIGITAL PRODUCT LIFECYLE

Along with modularisation, we believe the other key technological approaches to drive speed and quality of innovation are: the use of digital twins, adoption of digital product lifecycle management (PLM) and establishing a single digital thread.

DIGITALISATION

Costs can be driven down even further through digitalisation, enabling you to address the connection of all value chain elements to streamline processes and accelerate speed to market. Digital orchestration is key to enabling this, creating a thread from design to manufacturing, or even design to serviceability, to streamline the process and improve efficiencies and not to undermine the need for enhanced customer experience in current times.

Continually evolving your approach to innovation requires a complex network of continuous improvement with no strand mutually exclusive. Sometimes the connection between design, testing, manufacturing and after-market service is concurrent, sometimes it’s sequential. Regardless of how it happens, what is required is a holistic approach that moves you forward.

For example, to optimise the use of AI and analytics to create a digital twin for testing, you will need an effective PLM solution in place to ensure that concept, design and testing phases are receiving consistent and continuous feedback and analysis. For this to happen, a common single point of data, and a digital thread, is required to inform accuracy across this decision-making process, thereby making initiatives like the Digital Twin a much broader conversation rather than just for a specific lifecycle stage.

HOW CAN WE HELP

• Review & Advise on your Product Development Lifecyle
• Assist you with adopting Digital Product Lifecycle Management
• Help you create the Digital Thread across your complete product innovation chain

Creating a Digital Thread that spans Product Development, Manufacture and After-Sale Services is key in driving greater efficiencies and accelerating both innovation and speed to market.

<Small>STREAMLINING MANUFACTURING

STREAMLINING MANUFACTURING

As the Wind Industry scales there is a need for a transformational approach to manufacturing, streamlining and automating processes and driving greater efficiencies across the end to end supply chain.

The Wind sector needs to adopt Industry 4.0 approaches to manufacture, embracing smart digitalisation solutions to virtualise production, ensure quality and optimise costs.

CONTINUING THE DIGITAL THREAD

The digital thread created through your R&D process needs to flow through to the manufacturing process. The Digital Twins created in the development phase are extended to enable the manufacturing process to be tested, validated and optimised and the relevant systems to manage supply chain, inventory and assembly are seamlessly integrated.

ADOPTING INDUSTRY 4.NOW

The key to streamlining your manufacturing is to remove the paper and automate processes wherever possible. This involves learning the lessons from other industries, such as automotive or aerospace, which have the scale of the wind sector, and applying the relevant smart systems to optimise workflow, plant efficiency and to manage quality through every step of the process.

SUPPLY CHAIN MANAGEMENT

With both scale and the extended partnerships created through modularisation, there is a need for you to drive efficiencies through every aspect of the supply chain. This involves just-in-time cost optimisation, meticulous procurement management and the close digital integration of systems not only internally, but also to external parties.

HOW CAN WE HELP

• Create a Blueprint for Smart Industry 4.0

• Deliver more business value by migrating your PLM to the Cloud

• Review & Optimisation of Manufacturing Process

• Assist in putting in place the right systems for Manufacturing, Procurement Management & Quality Management

• OEED Improvement, Predictive Maintenance, Energy Management of Plants

• Assist in creating the Digital Thread across the manufacture and assembly process

TRANSPORT, HANDLING & INSTALLATION

Services will play an increasingly important role in the profitability of Wind Turbine manufacturers.

Your ability to increase margins through cost reduction of installation and maintenance and add value through proactive monitoring and optimisation will be key to your success. All of these aspects have to be designed into the product and be an integral element of product lifecycle management.

TRANSPORT & LOGISTICS

The installation and commissioning of a Wind Turbine requires meticulous planning with any aspect overlooked potentially causing a costly delay. Modelling the process against different scenarios and conditions is essential to ensure the right transportation is used, the appropriate heavy plant is commissioned, and all components are in the right place at the right time.

INSTALLATION MANAGEMENT

The inherently remote and often hostile location of wind turbines poses significant risk to installation. Being able to simulate environments and use Augmented Reality to test procedures and train engineers safely is paramount to minimise risk and ensure smooth installation. Modelling every eventuality is key in order to have effective contingency plans in place.

CONTENT MANAGEMENT

Content is critical to support assembly, commissioning and after-sale service. Ensuring you have a content strategy in place from the point of design, is essential. This strategy should focus on delivering the information people need in relevant formats that are easy to consume such as manuals, videos and virtual reality simulations.

HOW CAN WE HELP

• Review & Optimisation of your installation processes

• Logistical management of installation process

• Create and support a content strategy from conceptualisation through to after sale services

• Develop simulation and testing frameworks

PROFITABLE AFTER-SALES SERVICE

Services will play an increasingly important role in the profitability of Wind Turbine manufacturers.

Your ability to continually drive down the cost of maintenance of in-life equipment is essential. Also developing value-adding services to generate profitable revenue around pro-active monitoring and optimisation of your turbines.

REMOTE DIAGNOSTICS & MAINTENANCE

Through the utilisation of digital twins and simulating stress-testing in different environments, you are able to accurately understand the in-life operation of the Wind Turbine. Predictive models allow you to understand which elements require maintenance and enable remote diagnostic tests to monitor performance and identify issues before they impact production.

PROACTIVE MONITORING & OPTIMISATION

The ability to leverage IOT sensors across every component of the wind turbine enables proactive monitoring. However, for this to add value you need to have in place the systems that can receive all of the data points, correlate and analyse these and deliver actionable insights. Assisting your customers in optimising the operational efficiency of their wind turbines will be key to adding value.

CUSTOMER MANAGEMENT & ECOMMERCE

Differentiating through service will drive loyalty and this requires a focus on customer management and ensuring it is easy for your customers to do business with you. This requires understanding your customers and personalising your service through CRM and extending the digital experience through integrating systems and providing an effective ecommerce channel.

HOW CAN WE HELP

• Developing Value-Add Service Propositions

• Leveraging IOT, Simulation & Analytics to Develop Proactive Monitoring

• Develop In-Life Optimisation Modelling

• Creating a CRM & eCommerce Framework

THE VALUE WE BRING

& HOW WE CAN HELP YOUR ORGANISATION

WHO WE ARE & THE VALUE WE BRING

L&T Technology Services Limited (LTTS) is a listed subsidiary of Larsen & Toubro Limited focused on Engineering and R&D (ER&D) services. We offer consultancy, design, development and testing services across the product and process development lifecycle. Headquartered in India, we have over 16,000 employees spread across 17 global design centers and 62 innovation labs as of December 31, 2020. We bring deep understanding of the critical challenges faced by the Wind Energy Sector and add a wealth of experience of how to address these challenges through our work with 69 of the Fortune 500 and 53 of the world’s leading ER&D companies.

PTC enables global manufacturers and customers to realize double-digit impact through technology, designed for all the ways they work. Our field-proven solutions enable our customers to accelerate product and service innovation, improve operational efficiency, and increase workforce productivity. With PTC, and its partner network, you can capitalize on the promise of today’s new technology to drive digital transformation. At PTC we don’t just imagine a better world, we help create it.

Roland Berger is the only leading global consultancy of German heritage and European origin. It is our European background that makes the difference. We have a deep understanding of diverse cultures and markets. We combine European roots with pragmatism and entrepreneurial spirit. Our results turn visions into reality. This is how we create real value for our clients.

HOW WE CAN HELP YOUR ORGANISATION ACCELERATE INNOVATION

Through helping you develop a blueprint for modularisation and creating the digital thread across every aspect of design from concept to development.

STREAMLINING MANUFACTURING - Guiding you through the change required to adopt Industry 4.0 best practice and learning lessons from advanced sectors such as automotive and aerospace.

TRANSPORT, HANDLING & INSTALLATION - Enable you to increase margin through cost reduction of installation and maintenance. Optimising the logistical management of transportation and installation processes, and developing the content strategy, simulation and testing frameworks to reduce risk.

PROFITABLE AFTER-SALES SERVICE - By ensuring quality is designed into your product as well as creating services that add significant value yet can be delivered efficiently and profitably