A recessionary outlook for the global economy, sanctions on Russia and the follow-on impacts as the world emerges from the COVID-19 pandemic continue to reverberate through the power and renewables sector. Geopolitical fragmentation and trade tensions pose a monumental challenge to solar, wind, battery storage and utility supply chains at a time when energy security and the net-zero transition become more intertwined than ever before.
Current global macroeconomic factors such as trade tensions and energy security due to the war between Russia and Ukraine, the cost-of-living crisis in Europe, and market pressures on commodity prices are affecting how renewable supply chains are operating.
Amid incessant market volatility, we support solar supply chain decision-making through data-driven CAPEX and OPEX forecasting. This report provides proprietary low, medium, and high forecast scenarios for key categories of solar spend. Our solar forecasts are accompanied by an updated outlook for key commodity indices and freight rates.
PowerAdvocate is integrating with our sister company Wood Mackenzie to become its Supply Chain Cost Management Practice. We leverage proprietary data from our >$6.5T energy spend factbase and 10k+ cost models and benchmarks to provide actionable insights on hundreds of critical spend categories across all verticals within Energy & Natural Resources which aid in supplier negotiations and budget planning.
2022 marks an opportunity for Power, Utilities and Renewables’ operators to overcome cost challenges presented amid last year's turbulent market through appropriate CAPEX and OPEX forecasting. In our January report, we identify and provide cost forecasts for key CAPEX categories including transformers, switchgears and solar modules; and OPEX categories including different construction and maintenance services.
In October, executives from over 30 utility firms joined us at our 2021 Power & Utilities Executive Forum to share their perspective on a growing number of complex, compounding challenges, from the energy transition to supply chain risk management.
In this brief report, we highlight 3 key themes & strategies shared by utility executives to deliver higher levels of enterprise-wide value through the supply chain, focusing on: pushing key ESG objectives; navigating market volatility to deliver savings and market competitiveness; Defining new processes for identifying and managing novel supply chain risks.
Our EMEA Oil & Gas Upstream Market Report provides granular historical and granular cost trends for key categories of spend.
In our November 2021 report, we expect deflation of -2.4% in CAPEX costs and inflation of 3.3% in OPEX costs over the next 12 months.
Notable cost trends include sharp reverses from recent bullish inflation with OCTG costs expected to fall by -29.6%, Subsea Equipment costs by -14.2% and Production Chemicals costs by -0.8% from September to December 2021.
PowerAdvocate is a global data analytics provider and consultancy. For over 20 years, we’ve been working with over 150 energy operators, establishing supply chain as a strategic value creator for cost and risk performance improvement.
Market intelligence is key in driving procurement decision making that optimises costs to future market movements, enhances cost competitiveness to peers and monitors and minimises risk across the global supply chain.
In this Thought Leadership Report, we share our proprietary analysis of the impact of power shortages in China on the global supply chain. The analysis was conducted by our in-house Market Intelligence Group of experienced energy specific analysts and economic forecasters.
As commodity prices decline, labour shortages and freight constraints relieve, we expect the aggressive market inflation of the last year to soften and reverse, translating in forecasted price decreases in the next twelve months. In our September report, we provide cost forecasts for key utility & solar specific CAPEX categories including switchgears, transformers, solar modules; and OPEX categories including vegetation management, inverter maintenance and engineering services.
Input costs for new wind construction projects are estimated to have increased by more than 31% since the beginning of 2020, driven predominantly by the rising price of metals and other raw materials used in major wind turbine components, including the tower, foundations, nacelles, rotor and transformers.
Steel prices have climbed by more than 200% as the demand continues to outweigh the supply.
You can find out more about how Capex and Opex trends will change as well as category level cost forecasts into 2022 in our latest report.
In the first post of our multi-part series, we discussed the market forces driving today's inflationary environment for energy and natural resources firms. Now, we dive deeper into one of the consequences of those market forces: longer equipment lead times. PowerAdvocate recently conducted a survey of dozens of top suppliers in the energy industry and found an average 50% increase in lead times for critical electrical infrastructure equipment since January of 2021.