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How Renewable Energy in Supply Chain Could Lead to Whole Savings

image credit: Photo by Thomas Richter on Unsplash

Renewable energy is becoming more cost-effective than ever. With the growing accessibility of renewable power sources, businesses will do good to join the movement and save on their energy bills. These benefits apply to both general operations and product manufacturing — the entire supply chain matters.

Many organizations have become interested in greening their supply chains for increased sustainability and better savings. Modifying even one part of the chain can make a significant difference across the entire line in terms of efficiency, costs and waste management. Restructuring power usage is one of the easier ways to do this because of its seamless integration.

A report from CDP revealed suppliers could save up to 1 gigaton in emissions by switching to renewables. They would receive worthwhile savings and take a significant stand to preserve environmental resources. Now is the best time to transform how supply chain management runs.

Benefits of Renewable Energy

Using solar energy offers many advantages — both on a commercial and environmental scale. Solar power itself is a strong contender for energy savings, and manufacturing solar cells creates 90% fewer pollutants than fuel-based energy. Solar PV installation is simple to do and produces a sturdy, reliable result. The sun is a major dependable energy source compared to oil. Solar systems can store electricity even on overcast days, allowing operations to continue without interruption.

Geothermal, wind and ocean energy are also claiming their spots as viable contenders to replace oil-based power. Businesses apply geothermal resources to their supply chains in one of two ways — shallow or deep. The core functions of geothermal energy in supply chain management are district heating and electricity supply. Most of this power comes from ground-source heat pumps.

Ocean energy is still a new concept to many, but with the support of new power-harnessing technologies, it shows promise. Tidal demos in Europe have displayed a capacity of 40%, and they can also supply a significant amount of energy to the power grid. Ocean energy functions similarly to hydropower, but it exists on a larger scale and requires fine-tuned control to utilize.

Manufacturers scale wind turbines up or down to accommodate energy needs. This practice is a convenient solution for smaller companies that lack the square footage to host these massive machines. Implementing wind energy requires a thorough assessment, as this power source is less flexible than other renewables. However, wind power reduced 201 million metric tons of carbon dioxide in 2018, making it an invaluable option among renewables.

A Renewable Supply Chain

Companies like Microsoft, L'Oreal and Walmart have shifted to renewable energy by collaborating with sustainable suppliers. Over 70% of the businesses in the CDP survey are actively engaging their suppliers on renewable electricity, and 56% of them receive 11% of their power from renewables. Many have chosen to focus on specific environmental causes other than energy management, such as deforestation and water conservation. 

Water security is a pressing concern for suppliers, as many supply chains require freshwater sources at various levels to ensure product manufacturing. A lack of clean water also affects hydropower systems. Adopting renewable power doesn't stop at energy management — every point within the supply chain feels the effects. If there's no clean water or unpolluted air to use for turbines, renewables can't operate at their fullest. Greening the supply chain is often a holistic movement — it requires cooperation on every level.

How to Achieve Clean Energy

Replacing current energy systems with renewables is straightforward, especially with the added tax benefits. These incentives supply businesses with the money they need to install renewable energy sources, ensuring considerable profit gains from the start. Solar PV is low maintenance and doesn't require extensive upkeep — a panel can be left up for years before it needs resealing. 

Companies will need energy assessments to ensure a proper fit before adopting any new power sources. How much a business can save depends on the organization itself. Its size, current operating costs and location of the renewable resources all factor into a successful integration.

Is integrating clean energy into the supply chain realistic, and at what levels would it serve best? Businesses should consider this and take the necessary steps to make all parts of the chain sustainable. The entire process has to shift to produce the greatest results.

Improving Supply Chains for Increased Profits

The future of renewable energy is clear: Companies can increase their bottom lines by choosing more efficient power sources over resource-intensive fuel-based systems. Aiming for better business practices is about more than saving money. It also focuses on effectively serving customers and reducing one's environmental impact

Emily Folk's picture

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