Renewables Manufacturing: Reshoring is Making Waves

By Sofia Sauvageot, wind segment leader, GE’s Power Conversion

Production is coming back to Europe. Having once looked to cut costs by moving operations to emerging nations with lower labor rates, many manufacturing businesses are now returning to the region. A combination of rising labor costs around the globe, the inherent difficulties of overseeing production across geographies and the increased cost and time of getting goods to Western markets has seen a string of major companies reshoring to Europe in past years.

This trend stretches across many sectors and disciplines, and it’s making waves in the world of renewables manufacturing. The reality is that when it comes to serving European customers, there are significant advantages to having renewables manufacturing capabilities close to the power plant, and in this piece, we look at a few of the biggest.

Accelerated innovation

It’s easier to support collaboration and foster new ideas with suppliers located close to your plant. Initial criteria will likely be defined by the local engineering team, so experience with how things work locally should mean that a more open, effective exchange of ideas can take place – whether that’s having insight into the availability of vital raw materials or supply chain timings and processes. By contrast, working out innovations and practicalities with a supplier far away will often result in additional complications from navigating time zones, transport costs and interactions between dispersed team members.

The need for speed in innovation and development is more important than ever. We’re seeing commercial lifetimes of products become shorter and shorter thanks to how rapidly technology is improving and changing. The wind industry is a prime example: in the 1980s a typical wind turbine would have a capacity of roughly 50 kilowatts, whereas today, higher capacity units of up to 10 megawatts are in development. Such an accelerated development cycle delivers a commercial pressure to keep innovating. The ability to quickly bring new offerings to the market has become a big factor in defining an organization’s competitiveness.

A reduced carbon footprint

Needless to say, having a manufacturing site close to the plant reduces logistics costs and its CO2 footprint. Europe is particularly advanced in this area for a couple of reasons. Firstly, legislation sets the bar high in terms of green offerings, with companies forced to declare the CO2 footprint of wind turbines. Secondly, European manufacturing is comparatively efficient. The region has traditionally had high labor costs and thus, has forced manufacturers to focus investment on lean manufacturing processes – using automation to maximize production with minimum labor resource and as small a carbon footprint as possible.

Efficiency, reliability and sustainability

Sitting alongside the benefits of innovation and reduced carbon footprints are the daily driving factors of efficient, reliable operations. Locally situated suppliers, for example, also lead to a less-complex transportation cycle that delivers greater certainty (regarding on-time delivery) and flexibility (when it comes to inventory management). What’s more, given the fluctuations in labor rates across the globe, reshoring to Europe can be considered a sustainable move longer term, thanks to the comparative consistency of costs. As regions such as Asia continue to develop, for example, they will likely be exhausted as “cheap” options for organizations in five years’ time.

The next wave of manufacturing

This trend of reshoring manufacturing to Europe is driving innovation in the region, forcing companies to deliver optimized manufacturing models and invest in the latest tools to compensate for local labor costs and secure competitive advantage. GE Energy Connections’ Power Conversion, for example, has new “Brilliant Factories” in Nancy, France, and Berlin, Germany, where factories are taking one step ahead, using advanced digital software or hybrid technology to achieve manufacturing optimization while saving energy.

Nancy factory

Digital technology enables equipment and software to “talk to each other” over the internet in real time, share information and help operators make more informed decisions that will help ensure product quality and avoid unplanned plant shutdowns. The Nancy factory places “digital” at the heart of renewables manufacturing for the near future—fully digitalized shop floors, where each machine component will have a digital identity card and be digitally traced, means that data will be monitored and recorded in real time, providing immediate access to component status. The data of machine performance, meanwhile, will provide a holistic view of the production, allowing workers to make more informed decisions. It also helps to dramatically reduce waste and optimize parameters (electricity current, temperature, etc.) to boost production.

Elsewhere, on the testing floor, it will be possible to simulate future field environments and monitor closely the behavior of manufactured machines to ensure the machine’s readiness and reliability once deployed in the field. In addition to innovation, the speed of production is also increasing. GE is building a one-piece production flow that’s semi-automated, which will be able to deliver one generator every eight hours, a significant 85 percent increase in production output from the current manufacturing capability!

Berlin factory

The Berlin factory is more focussed on pioneering energy efficiency. With Germany’s ambitious renewables targets in the contextual background, the factory is built around a synchronization of conventional and renewable energy to minimize fluctuations.

The Hybrid Power Plant uses traditional photovoltaics with GE’s flexible Jenbacher combined heat and power (CHP) technology and an innovative battery solution. The rooftop solar installation helps produce solar-generated electricity during the day, while the Jenbacher engine will help provide energy during the night. In contrast with traditional energy generating solutions where vast amounts of heat energy is wasted, CHP captures and recycles the usable heat that is produced in the process.

By using an intelligent energy storage system, surplus power in batteries offers the possibility to feed the energy back to the plant network, further cutting down the energy bill.

Alongside these innovations, further optimization efforts have been made to focus on efficiency improvements to the heating and air circulation systems as well as digitalizing existing infrastructure (for example, a sensor-based LED lighting system), which has helped the plant to achieve an annual savings of 885 metric tons of CO2 or US$101,000 in costs in 2015.

It’s an exciting time for manufacturing: continued breakthroughs of cost-effective, streamlined development processes are resulting in a greater ability to innovate and deliver than ever before. Renewables manufacturing is back in Europe, and it means healthy and sustainable growth for the industry.

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Image caption:
Renewables Manufacturing – GE’s Power Conversion Nancy Factory. © GE