By: Zulfa Rasheed, Co-founder, Cleanenergy4Africa

This article is an overview about the renewable energy supply chain elements. The aim is to highlight aspects of renewable energy supply chain according to the customer-supplier flows. Renewable Energy is a free sustainable source of energy [1]. It is a new industry compared to other conventional energy sources. Despite the increase in the number of studies and research on this field; it still has uncertainty and lack of sufficient information which is reflected in more complexity in designing and optimizing the supply chain. The use of different approaches to understanding complex Renewable Energy Supply Chain (RESC) systems has created a need to develop an integrated framework to reduce uncertainty [2].

CURRENT KNOWLEDGE ABOUT RESC

What we think we know for sure about renewable energy is the environmentally friendly effect. But this perspective is looking at the source not the technology. We are still not in a position to account for an absolute positive environmental effect as a result of renewable energy because there is usage of non-renewable energy in producing renewable energy.

On the other hand, the public has been prepared by media, education and other means to accept renewable energy as the future replacement of current energy sources but, nevertheless, most commercial challenges and institutional barriers (and sometimes political) are yet to be resolved to pave the path for successful renewable energy growth.

Management Perspective

The management perspective in renewable energy concerns with the activities engaged in fulfillment of the energy demand in a cost-efficient manner. The management role is to drive raw materials through series of operations to the customer as a product or a service.

The cost of renewable energy is seldom lower than non-renewable energy. For example, the cost of energy generation from biomass is generally higher than using fossil fuels. This is due to the need to build and operate more complex networks of harvesting, transportation, and processing operations [3]. In addition, there are some environmental impacts associated with all energy sources (renewable and non-renewable alike) as shown in Table 1 .  However, the long-term impact of using renewable energy can make it more profitable than non-renewable energy; for example the case of a destructive environmental effect from non-renewable energy can lead to more problems, thus more future costs. 

Energy source	Potential environmental impact
Fossil fuels	Global warming, ozone depletion, acid rain, air pollution
Hydrogen	Thermal and chemical changes in the atmosphere
Wind	Soil erosion, bird deaths, visual pollution
Solar	Landscape change, soil erosion, destruction of wildlife habitat
Geothermal	Accelerated cooling of Earth’s core
Wave/tidal	Reduced water circulation
Biofuel	Methane emissions, affecting soil productivity
Nuclear	Radiation leakage and contamination

ELEMENTS OF RENEWABLE ENERGY SUPPLY CHAINS 

As in many typical supply chains, the elements of RESC include physical, information, and financial flows [2] which affect the performance of the supply chain. The flows in a supply chain refer to management of continuous flows between the supplier and the customer in every stage to achieve the desired result. The three flows represent material, information and money. Below is a brief overview of each flow:

Physical Flow

Physical flows are the part of the supply chain that are associated with materials, manufacturing process, logistics and products. This flow stream affects the management performance of supply chain such as transportation of material.   

Information Flow

Any physical transformation in the supply chain requires a flow of information. The activities associated with valuable information flow will result in “improved supply chain relationships to achieve a sustainable competitive advantage” [4].

Financial Flow

The financial stream can flow to RESC from different stakeholders and some of the business fund can come from non-profit environmental organizations. The financial flow can result from the supply chain management activities or it can control the supply chain functions. 

RESC PERFORMANCE

Whatever we know about the RESC, achieving a balance between the three flows (physical, information and financial) is a challenge. Taking the efficiency and effectiveness of the manufacturing process for example -which is a part of the physical flow- is controlled by logistics. So, we need to take into consideration, whenever we assess RESC efficiency, it is essential to note that the flow elements can be bidirectional (between the supplier and the beneficiary), covering goods, services, and information.

FURTHER STUDY

This overview has provided a general road map towards understanding RESC elements swaying strongly to the managerial side. Further study can explore the listed flow elements in depth, test them, discuss them with experts and compare them to practical situations to see how relevant they are to be generalized in a general RESC.

This article is a summary, the original work provided a mind map gathering aspects of renewable energy supply chain according to the elements of green energy. For more details please contact the author [email protected].

REFERENCES 

[1] H. Weeet al, “Renewable energy supply chains, performance, application barriers, and strategies for further development,” Renewable and Sustainable Energy Reviews, vol. 16, (8), pp. 5451-5465, 2012.

[2] M. Ricardo Saavedra M., Cristiano Hora de O. Fontes, Francisco Gaudêncio M. Freires, “Sustainable and renewable energy supply chain: A system dynamics overview, Renewable and Sustainable Energy Reviews”, Vol. 82, (1), pp 247-259, 2018.

[3] H. L. Lam, P. S. Varbanov and J. J. Klemeš, “Optimisation of regional energy supply chains utilising renewables: P-graph approach,” Computers and Chemical Engineering, vol. 34, (5), pp. 782-792, 2010.

[4] F. Cucchiella and I. D’Adamo, “Issue on supply chain of renewable energy,” Energy Conversion and Management, vol. 76, pp. 774-780, 2013.