The Energy Transition: How Logistics Providers Are Supporting OEMs in Moving the Mission Forward - Ascent Global Logistics

The Energy Transition: How Logistics Providers Are Supporting OEMs in Moving the Mission Forward

09/20/2022
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After years of aggressive political agendas and OEM lobbying, the only certainty is that the future of the energy landscape is more uncertain than ever.  

Many narratives in the energy industry are making it challenging to establish which technologies will prevail or are feasible enough to implement in a rapidly changing consumer marketplace. Many ask themselves, “will it be hydrogen, carbon capture and other renewable natural gas products?” Perhaps “large-scale offshore wind?” or smaller scale, more accessible nuclear solutions with less red tape? Furthermore, how can OEMs keep these technologies from becoming a “race to the bottom?”  

The answer will remain unknown until consumers create demand through their purchase of certain products, such as electric vehicles, or regulators mandate governments worldwide to stand behind and support certain technologies to ensure compliance with the decarbonization goals already set in motion via numerous global accords.

This has become a challenging time for large OEMs and Utilities as they face bridging this period with a combination of legacy solutions and strategic investment in developing new technologies that are both agile and responsive to consumer preference. Logistics providers will also play a massive role in this evolution by delivering fuels and transporting assets or developing new solutions that make these technologies more feasible to implement.

OEMs have focused on solutions that are either less disruptive to society or less expensive to transport by removing the final mile. Larger-scale offshore wind turbines are a good example of how moving project cargo can be simplified by altering the geography of an installation location – making for a more financially feasible implementation. To drive down the total landed cost to Utilities, OEMs are turning to asset-based providers, such as Ascent, and ports directly instead of conventional freight forwarder relationships. Why? Because they can quickly assist in creating tangible solutions and respond to regulators’ concerns which could otherwise prohibit the transportation of such massive cargo in the first place.

Power generation technologies have a much longer implementation window than consumer-centric products such as electric vehicles. Industry response, for example, has not been much more than dual-fuel (natural gas/hydrogen-compatible turbines). Conventional combustion technology and fossil fuels will almost certainly be a part of this equation for decades to come and challenge the need for renewables as the segment lumbers through transformation to become more efficient. It is also important to note that because the oil and gas industry is so unpredictable, some industry-specific fuels (i.e., aviation fuel) could remain the primary source as opposed to electrification or hydrogen. Why? Because as consumer demand for fossil fuels tapers off, aviation fuel will become more affordable and, at present, the combustion solution is far easier to address than the energy storage solution in an aircraft.

How do we approach ongoing and future delivery of power to the consumer when the grid is as old, unreliable and unstable as it is? Doing so requires addressing generation, transmission and distribution simultaneously. This is an unprecedented task, made much more difficult by the consumers’ ability to influence demand in areas such as electrified mobility. Unlike the portability and efficiency delivered by fossil fuels, a monumental infrastructure is required to accommodate the challenges posed by consumers’ ability to commute and shift demand miles away from predictable locations such as a home, place of work or retail outlet, let alone a generating station.

Large-scale electrification of the mobility sector has raised questions about the stability and adaptability of the grid today and how to deliver the seemingly “impossible-to-predict” demand effectively. Analytics, machine learning and other predictive technologies play a role in re-baselining consumer behavior for the energy industry. However, the element of surprise (in the form of consumer/customer choice) can derail any long-term investment and otherwise render a technology obsolete or so inconvenient that users abandon it on short notice. With that in mind, it is worth noting that we have seen a preference building among customers for solutions such as PEAK, Ascent’s proprietary competitive freight marketplace. Why? Because in much the same way that customers operate within their own industries, we are able to instantly deliver the market price for a change in logistics strategy based on real-time offers from the market. This is a true advantage over conventional freight forwarder solutions, which cannot and do not guarantee capacity.

For years, the centralization of the workforce created a very predictable peak demand for power in both the workplace and the household. It gave rise to efficient local distribution solutions and new renewable energy sources such as solar, whose generating abilities opposed demand but were easily solved by efficient storage solutions. It wasn’t until after the recent pandemic and the creation of perpetual peak demand from the household that consumer demand started to turn on its head. The creation of this new efficient energy storage market segment was bred from an early inability to meet consumer demand during peak periods via renewable energy products. Airline carriers such as USA Jet and others across the logistics industry have worked to become part of the solution by qualifying for the certifications required to move large volumes of lithium-ion batteries and other hazardous materials. Efforts such as this ensure that energy storage solutions can be maintained or redeployed quickly, and as a result, the related technology remains relevant. That said, it is important to note that while it is possible to redeploy that technology to where it is needed most with today’s solutions, easily changing the transmission and distribution infrastructure is a separate and significant challenge.

The struggle of the energy transition is real. However, the mission is clear for those of us serving OEMs and utilities that require support for outages and critical infrastructure maintenance during this transitional period. We must be committed to changing how we work while also scaling our products and solutions to make these technologies just as competitive as those used to support new/innovative technology in other industries, such as automotive.

To learn how Ascent can source the best transportation at the lowest rates while adopting better practices to responsibly improve our planet’s health, visit https://landing.ascentlogistics.com/move-renewable-energy-products/.

About Ascent Logistics

Ascent is a thought leader in this space and an active proponent of advancing the energy transition via a strategic and systematic approach designed for the long term. Whatever role you or your business play in the global supply chain, we encourage you to reach out to our team to learn more about our stance relative to this ongoing transition and our ongoing efforts to ensure its success moving ahead. 

Phil Nowak is Director of the Power & Energy sector at Ascent

He leverages his extensive experience across global logistics, infrastructure, equipment manufacturing and supply chain management to assist customers by helping to build and implement solutions designed to shape the future of energy sector logistics. Phil lives and works out of Toronto Canada and can be contacted at: 905.409.8750 or [email protected].

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