RENEWABLE ENERGY BENEFITS LEVERAGING LOCAL CAPACITY FOR ONSHORE WIND

INTRODUCTION
Developing a renewable energy sector brings immense opportunities to fuel economic growth,
create new employment opportunities and enhance human health and welfare. Many countries
increasingly consider the socio-economic benefits of renewable energy development as a key driver to
support its deployment (IRENA, 2016a). Analysis by the International Renewable Energy Agency (IRENA) shows that an accelerated deployment of renewable energy and energy efficiency, as needed to meet the goals laid out in the Paris Agreement, would increase global GDP by 0.8% in 2050 and support around 26 million jobs in the global renewable energy sector by 2050 (IRENA, 2017a). In recent years, job creation has been an important co-benefit of accelerated renewable energy deployment. IRENA estimates that the sector employed 9.8 million people in 2016 (IRENA, 2017b). Employment opportunities are created throughout the value chain for renewable energy deployment, from project planning to manufacturing, installing, operating and main-taining, as well as decommissioning.

VALUE CREATION IN THE WIND ENERGY SECTOR
Among environmental concerns and with the growing demand for energy, the deployment of renewable energy is increasingly being driven by the potential it presents to develop a domestic renewable energy industry, offering opportunities for job creation and income generation. Analysing the potential for local value creation from wind energy deployment establishes whether economic benefits such as income generation and job creation can be realised in the country where the projects are located, and whether certain segments of the value chain should depend on the importation of products and/or services. The extent to which value can be created domestically will depend largely on the the size of its renewable energy market, stage of renewable energy and industrial development, establishment of other related sectors, dynamics of regional and global markets for components and services, the availability of skills and the general business environment of the country. This chapter explore the potential opportunities for
value creation from the development of onshore wind. It starts by an overview of the trends in the adoption of wind energy, followed by an estimate of the investments and jobs created in the sector,
and a breakdown of the value chain into the different segments that present opportunities for value creation.

Trends and cost of onshore wind The installed capacity of onshore wind energy has risen steadily for nearly two decades, increasing from about 17 gigawatts (GW) in 2007 to 450 GW in 2016 (IRENA, 2017d) (see Figure 1.1), resulting in ample socio-economic benefits.

IRENA estimates that achieving the energy transition in the G20 countries would require
cumulative investments in the wind energy sector of about USD 3.3 trillion by 2030 and USD 6.3 trillion by 2050 (IRENA, 2017a). Such investments can create value, and result in socioeconomic benefits including income generation and job creation (see Figure 1.2).

The wind industry has undergone considerable progress in technological maturity. Onshore wind power is now cost-competitive with other technologies such as new coal- or gas-fired plants in several countries. In Egypt and Morocco, recent wind auctions have resulted in bids as low as USD 40 and USD 30 per megawatt hour (MWh), and in Latin America, technology-neutral auctions have resulted in even lower prices for wind, demonstrating its competitiveness against conventional technologies (IRENA, 2017e). As a result, many countries are developing wind energy as the technology of choice in terms of cost competitiveness and opportunities for domesticvalue creation. However, an assessment of the main requirements to develop a wind industry is needed to assess the feasibility of sourcing equipment and services locally. Analysing the activities and requirements of a wind project requires an understanding of the different components of an onshore wind farm. Moreover, an understanding of the distribution of the total costs of the project can provide insights on the activities with the highest potential for value creation.

Components of a wind farm
Wind power technology transforms the kinetic energy of the wind into mechanical power: the
wind turns the turbine blades that, via a drive shaft, provide the mechanical energy to power the generator in the turbine. The main components of a wind farm include the wind turbine (see Figure 1.3), the elements needed for the infrastructure (foundations) and the equipment for the connection to the grid (transformers, substation, cables and inverters) (ABDI, 2014).

REQUIREMENTS FOR ONSHORE WIND ENERGY DEVELOPMENT
The different stages of the development of wind energy projects are commonly divided into several activities, based on their characteristics (e.g. economic evaluation, administrative activities, procurement process, engineering tasks, construction works). Table 2.1 provides a breakdown of the core activities carried out, from the selection of an appropriate project site at the planning stage to site clearance at the decommissioning stage.

Value chain of onshore wind
The wind energy value chain is commonly divided into several segments/phases comprising related
activities, pertaining to core and supporting activities. The core activities that are specific to renewable energy development include project planning, procurement of raw materials and intermediary products, manufacturing of components, transport of equipment, project installation, grid connection, operation and maintenance and decommissioning. Other activities from the various sectors that support deployment include consulting, financing, education, research and development, policy making and administrative activities1 (see Figure 2.1).

For a country deploying wind energy, the potential to generate income and create jobs will depend
on the extent to which the local industry along the different segments of the value chain can leverage existing economic activities, and create new ones. The analysis in this study focuses on the
core segments of the value chain: project planning, procurement, manufacturing, transport, installation
and grid connection, operation and maintenance (O&M) and decommissioning. In designing policies
to support value creation from the development of a domestic wind industry, a deeper understanding of
the requirements in terms of labour, skills, materials and equipment is needed.

In terms of weight composition of each of the main components, the nacelle, including the gearbox
and frame, is mostly made of steel and iron and casting material (around 56% and 35% of total weight respectively). The rotor including the blades is mostly composed of fiberglass, casting material, and steel and iron (almost 40%, 30% and 22% of total weight respectively). As for the tower, it is mostly made of steel and iron (see Figure 2.5).

Logistics. One of the biggest challenges facing the industry is transporting bulky parts, sometimes
over long distances. Issues faced can include traffic congestion, road damage, the need for complex
coordination and high costs. A single turbine can have blades 80 meters long weighing 33 tonnes each;
it can require up to eight truckloads to transport it by land (one for the nacelle, one for the hub, three
for the blades and three for the tower sections). For instance, one 150 MW wind farm in the United States required 689 truckloads, 140 railcars and 8 vessels (CN, 2009). Transport costs increase with the size of the turbines and the wind farm as well as with the distance travelled.

Monitoring and control system manufacturing
Wind blades are typically made of glass and carbon fibre materials, filled with epoxy resin. Manufacturing the blades includes procuring the material, placing the glass and carbon fibre in a
mold for shaping, building the blade structure with a curing process and trimming and polishing the
blade. Wind turbine manufacturers may purchase the blades from local partner manufacturers in lieu
of importing blades from headquarters.

needed is shown in Figure 2.7. Almost 70 percent of the labour needed consists of truck drivers and
crane operators, who may require certified skills in some countries, but can generally be hired locally.

Installation and grid connection
It takes approximately 12 to 20 months to install and connect a wind farm, including the construction
of infrastructure to permit physical access to the site to facilitate the transport of equipment
and components and wind farm construction. During this phase, the land is prepared, turbine
foundations are built, key wind turbine components (i.e. nacelle, rotor, blades and tower) are assembled
and turbines are mounted. In economic terms, the laying of the foundation is critical since it represents
between 6% and 16% of total cost, depending on the soil characteristics and the weight of the wind
turbine, among other aspects. In some cases, the wind turbine manufacturer is able to offer complete installation within a turnkey project. In others, the project developer carries out these activities by subcontracting the different works, buying the equipment, and coordinating with the various contractors.

Source: IRENA

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