Atlantic Canada Opportunities Agency
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Atlantic Energy Gateway - Renewable Generation Supply Chain Opportunities in Atlantic Canada

Executive Summary

Introduction and Purpose

The Atlantic Canada Opportunities Agency (ACOA) is conducting the Atlantic Energy Gateway (AEG) study on renewable energy potential in the four Atlantic provinces. Concentric Energy Advisors, Inc. (Concentric) has been engaged to examine a range of issues associated with opportunities for Atlantic Canadian firms in the supply chain for various renewable generation technologies, including: onshore wind; offshore wind; tidal energy; biomass energy; and systems to power remote on- and off-grid communities.

This report explores the following questions related to each of these technologies:

  • What are the major supply chain constraints in Atlantic Canada today?
  • Which elements of the above supply chains are presently, or can evolve as, major challenges to further Atlantic Canadian business development/deployment?
  • What solutions/best practices might address these constraints?
  • Based on a review of capacity in Atlantic Canada, what are the best opportunities for firms in Atlantic Canada to access these supply chains in order to generate new sales?

While the definition of a “renewable energy supply chain” may include upstream activities such as research and development, resource studies, site preparation, environmental assessments, etc., for the purposes of this report, the definition of the supply chain is limited to those activities commencing with the manufacture of plant components (or in the case of biomass, the procurement of plant feedstock) and continuing through to the operation of generation facilities. The primary reason for this distinction is that geography offers little competitive advantage for local companies to provide these upstream functions.

Summary of Opportunities

The supply chain for onshore wind is currently robust, but still offers a number of service-related opportunities to Atlantic Canada, including crane services for installations, operations and maintenance (O&M), and logistics services.  Each of these services was noted in our interviews as being vulnerable to supply constraints.  In addition, blade manufacturing, especially for smaller, community-scale projects, also provides an opportunity for industrial expansion.

Supply chain development for offshore wind and tidal power, has, to date, been limited in the region due to the nascent state of these technologies.  However, should these technologies reach commercialization, the resulting supply chains, which have much in common, will offer significant opportunities to firms in Atlantic Canada. 

The tidal power industry is still in the demonstration phase, and Atlantic Canada is a leader when it comes to R&D, but similar efforts are also underway in Europe and the U.S. If these regions translate their projects into commercialization opportunities before Atlantic Canada does, then those regions would have a leg up in establishing supply chain strength in turbine manufacturing and purpose-built vessel design and construction.  Due to the more modest scale of global tidal resources compared to offshore wind, the industry may not support the manufacturing of such components in more than one location.

The construction of substructures, consisting mostly of steel and concrete, is not technically very challenging and there is local fabrication capacity to provide this function.  The high costs associated with transporting components manufactured abroad to a local deployment site provide an added incentive for local industry to provide these fabrication services.  Many of the subcomponents of tidal turbines are also made of steel and these, too, could be fabricated at local manufacturing facilities.

The lack of global supply chain developments to support the tidal industry also offers Atlantic Canada an opportunity to leverage its existing expertise in engineering, shipbuilding, and marine services to become a global leader in providing marine services. If technologies and services can be developed to overcome the harsh conditions evident in the Bay of Fundy, there is a global opportunity to market this expertise for use in tidal installations across the globe.  Unlike with offshore wind, where such technologies and services are already being developed to serve the European market, Atlantic Canada still has the opportunity to be a first-mover with tidal power.

Similarly, existing offshore oil & gas and marine service providers have the infrastructure and experience to become major contractors in marine renewable energy supply chains, offering deployment, installation, and O&M services.  While current business opportunities to serve offshore wind and tidal power are very limited, the region is well positioned – in both geography and industrial infrastructure – to contribute substantially to these supply chains as they mature.

A healthy biomass supply chain is already established in Atlantic Canada, but opportunity exists to expand this supply chain.  Increasing demand for biomass coupled with diminishing supplies of mill residue create the potential to make greater use of forest residue and low-grade timber, requiring expanded feedstock procurement equipment and service offerings.  Thermal energy applications, especially exports, present the greatest opportunity for growth, but electric generation appears to offer less potential. 

Potential supply chain opportunities also exist related to the development of systems to power on- and off-grid applications that displace diesel generation with renewable resources.  Local firms involved in wind/hydrogen demonstration projects may benefit from forming partnerships to develop a standardized control system that would allow for turnkey replication of these wind/hydrogen facilities.

The off-grid use of biomass for district heating and/or cogeneration was also analyzed, and may offer further supply chain opportunities through greater application in district heating and remote communities.

View related Atlantic Energy Gateway studies.