The renewable energy market has strong demand for growth. Technology solutions make production more efficient. Increased electrification of infrastructure and competitive levelized cost of energy are making investments in the sector more compelling. However, disruptions in labor, supply chains, and the economy have led to higher costs and delays throughout the renewable energy space.
Overcoming these challenges starts with building a firm foundation of the things developers and builders can control, and using that to anchor the organization as they grapple with the complexity of each new project.
Renewable energy experts gathered at a Procore-hosted Renewable Energy Forum to discuss industry challenges and ways to overcome them. In order to meet the ambitious goals being set by and for the industry, it will require both working hard and working smart.
Deloitte’s US and Global Renewable Energy Leader, Marlene Motyka, explained that, according to a recently published study by Deloitte, the renewables industry will need to double or triple its building capacity and maintain that every year in order to meet the 100% clean electricity standard before 2050.
The trouble is that the industry, like many, faces enormous headwinds: raw material shortages, shipping delays and expenses, a lack of skilled labor and on-the-ground expertise — even cyber attacks are becoming a serious source of concern.
So where does one even start?
Process, People, Performance
There are three general pillars around which leadership should be looking for innovation and improvement: process, people, and performance.
The Inflation Reduction Act is a huge source of opportunity and savings for many companies, but Motyka emphasized that robust data management processes are necessary for anyone who wants to take part.
“Upfront, having the right processes and the ability to track the details and having them at the time you’re building and engaging in your contracts, is going to be critical,” Motyka said. “Because after the fact, you’re never going to be able to make up for it.”
But don’t just do it for the tax credit, added Faith Glass-Wilson, Director of Continuous Improvement at solar development giant AES Clean Energy.
Having the right processes is also “showing the business can do what the business needs to do,” explained Glass-Wilson. “That can boil down to things like reporting infrastructure, data infrastructure, metrics, dashboards, and management of constraints to really focus on increased throughput.”
Taking standards seriously
Sometimes that infrastructure needs to be created, and sometimes it needs to be enforced.
“While many companies have set a code of conduct for their suppliers, that requires them to adhere to environmental standards, ensure DEI in their supply chains and safeguard employee health and safety, and maintain ethical labor practices… compliance is not universal,” said Motyka. “Creating meaningful ESG process within the supply chain requires engagement across the journey — really working with your suppliers hand in hand to implement some of these ESG targets.”
Jenny Bredt, VP of Operational Excellence at RES, the world’s largest independent renewable energy company, pointed out the benefits of tech upgrades to increase efficiencies and ensure humans are focused on value-add activities and systems are doing the non value-add activities.
“Taking that administrative burden off of people by putting everything into one concise system… I can’t even quantify the improvement it made. It’s a behavior and a cultural thing,” said Bredt.
This is because ultimately it’s people who are doing the boots on the ground work to build our projects — robots haven’t taken over yet, Bredt noted. Renewables aren’t the only industry facing a labor crisis. It’s also the companies they rely on — shippers, manufacturers and trades.
Improving operations through insights
The panelists all remarked on the importance of not trying to “eat the elephant in one bite,” as Glass-Wilson put it. With improved processes come better data on how your people are doing, their pain points and opportunities for improvement.
Bredt described an active site with 76% third-party craft turnover and incomplete replacement. Even with so much attention around renewables, it’s hard to convince people today to spend months in the middle of nowhere doing the hard work of installing panels, turbines and associated grid infrastructure.
“You have to have thick skin and a really strong stomach. This is not going to be for the faint of heart,” Bredt explained. “But that’s also the challenge that I think draws people to this industry.”
Understanding that draw and what separates the renewables sector from others is important if you’re going to attract talent in a competitive and complex labor market.
“Renewables, at least in the U.S., are still fairly young,” said Glass-Wilson, resulting in a relatively small talent pool. But instead of this being a constraint it could be thought of as an opportunity to diversify.
“Manufacturing, lab sciences, military, higher ed… we want to bring that expertise into the renewable industry. And we want to make sure we’re building out a culture and an expertise and a skill set that’s going to lay the foundation for this to have long term success,” added Glass-Wilson.
Leadership has to lead and communicate
A talent pipeline is crucial, but not only do you need to seek diverse backgrounds and talents, you have to integrate and maintain them as you scale. All the more reason for your company and leadership to make its goals and methods as clear as possible to everyone involved.
“If you don’t communicate clear objectives, and where you want your company to be, everybody can get caught up in the confusion elsewhere,” Bredt said. “There has to be something for your team and your business and your employees to go back to and root themselves in to see that path through.”
Assessing performance on those objectives is critical, and not just for quarterly reports.
“Really define what success is for you,” said Glass-Wilson. “Having that clear understanding is going to enable you to have KPIs. You need to be able to measure if you’re doing that. If you’re kind of aimless, it’s going to be really easy to be overwhelmed with this industry. You’ve got to make sure there’s clear vision and clear execution on these goals.”
Find confidence in culture
For companies in a space like renewables, with so many constantly shifting variables, success starts with finding confidence in your own work. As noted above and during the panel discussion, this means building a team that can do the work, but also a culture that puts that work in context.
Improving internal processes help add and hone that context, making employees feel more informed and effective, as well as tracking higher-level performance. With clearly defined, quantifiable goals, a company can say with confidence how far they have moved towards them — whether it’s by a single step or a long mile, being sure is the important part.
Renewables are a rapidly evolving industry. Each project carries its own challenges as developers and builders expand the boundaries of what’s possible. Successful players will implement ways to reduce the noise and equip their teams for success.
Procore’s Construction Management solution is used by leading renewable energy providers. If you would like more information on how Procore keeps developers, general contractors and specialty contractors on complex projects on track in a dynamic environment, please visit our website or contact us for a demo.
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