More than 23 gigawatts of new wind energy capacity is forecast to be built in the U.S. over the next two years, but supply chain bottlenecks could lead to project cancellations and postponements, a new study by consulting firm Wood Mackenzie Power and Renewables found.

Dan Shreve, head of global wind research at Wood Mackenzie Power & Renewables, said that increased demand for transportation capacity due to growth in partial repowering activity, logistics requirements and competition from other industrial sectors could "severely hamper" the transportation segment’s ability to ship components.

The expected supply chain crunch could impact nearly one in four wind energy projects between 2019-2021. Source: NRELThe supply chain constraints may boost deployment risks for all wind energy players, and increase the likelihood of higher costs, missed deadlines, lost production and fewer federal tax breaks if projects can’t be commissioned in time.

A development boom is being driven in large part by the expected end of federal Production Tax Credits in 2021.

The report said that if these supply chain constraint issues are not addressed, nearly one in four of the wind energy capacity installations expected in 2019-2020 could be delayed or canceled.

Turbine installations could decline by 1.1 GW of capacity (366 megawatts in 2019 and 720 megawatts in 2020), representing a potential loss of more than $800 million in turbine sales. Tax credit impacts could represent lost revenue of up to $1.3 billion over the 10-year tax credit period.

Shreve said that although demand upticks have put pressure on transportation capacity in the past, the total level of effort required from logistics providers will be "substantially higher" than during past peaks.

New turbine technology means that components are larger and heavier, thus increasing requirements for highway escorts, reducing transportation equipment cycle times and increasing demand for larger construction cranes.

The report said that "aggressive increases in equipment transportation turnaround times" along with efforts to spread out demand to increase equipment use during off-peak periods will likely be required.

The report was commissioned by the Wind Energy Logistics Group, which is made up of 16 companies from across the wind energy supply chain.

The consulting firm outlined five strategies that may help to ease the expected supply chain crunch:

• Shift installation schedules and transport deliveries to minimize quarterly peaks
• Establish forward storage sites to pre-position component inventories near wind farms
• Prepare transload and wind farm sites to accept early deliveries
• Prioritize shipments to the most efficient sites and wind farms
• Communicate these findings and develop action plans now