Oct 30, 2015

The power of dismantling language barriers in the energy industry

Adam Groff
3 min
A dominant trend among energy companies in the United States is moving facilities overseas in order to reduce labor and production costs.With the ben...

A dominant trend among energy companies in the United States is moving facilities overseas in order to reduce labor and production costs.With the benefits of re-shoring outweighing outsourcing, many companies are beginning to reconsider their offshore locations.Here are just a few reasons energy companies are coming home and what the move means to American consumers:

Re-shoring defined

As mentioned above, energy companies across America built energy production facilities overseas for a number of reasons. Cheaper labor costs and more affordable resources were the main reasons for these energy producers to relocate their companies to other countries.

However, there has been a recent push for energy companies to move their facilities back to the United States.

Referred to as re-shoring, the energy industry and companies of all kinds are moving their outsourced services and employees back to their original domestic locations. Although the move back to the states is financially beneficial for energy companies, re-shoring benefits consumers as well. Here's how:

Eliminating language barriers

A notable problem for U.S. companies that have relocated overseas is the language barriers involved with setting up shop in another country. Language barriers with overseas business partners and employees can slow the entire production process for energy companies.

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The challenges of effectively communicating with foreign audiences is one of the major reasons energy producers are re-shoring. By moving to the United States, energy companies can once again reduce the language barrier, which is beneficial to American consumers.

Foreign labor costs on the rise

Many U.S. energy companies outsource their work to countries such as China and Mexico.

At one time, this meant lower labor costs when compared to the United States. However, foreign labor costs are on the rise in a number of outsourced countries.

As a result, energy companies are re-shoring and taking advantage of the comparable labor costs in America. This lowers overall energy production costs and allows energy companies to pass the savings on to consumers.

Importing fees increasing

With the rise in fuel costs, docking fees, and other miscellaneous overseas transport fees, energy companies and other industries are quickly rethinking their foreign locations.

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By re-shoring to the United States, companies of all kinds are able to take importing fees, fuel costs, and fuel surcharges out of the equation. This drastically reduces overhead production costs, which helps reduce prices for domestic consumers.

Power of ‘Made in America’

U.S. consumers are setting their sights on domestic products and services. Not only is the "Made and Produced in America" stamp associated with quality, it's also synonymous with great customer service.

When energy companies and businesses of all kinds re-shore their facilities, they can once again promote their products as "Made in America".

This helps increase sales and reassures American consumers that they will receive quality service. Exceptional service and increased sales also helps keep U.S. companies in America, which is at the heart of re-shoring. When it comes to the benefits of re-shoring, it's plain to see why so many companies are coming back to America.

About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including foreign and domestic business.

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Apr 23, 2021

Drax advances biomass strategy with Pinnacle acquisition

Dominic Ellis
2 min
Drax is advancing biomass following Pinnacle acquisition it reported in a trading update

Drax' recently completed acquisition of Pinnacle more than doubles its sustainable biomass production capacity and significantly reduces its cost of production, it reported in a trading update.

The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.

The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).

Drax CEO Will Gardiner said its Q1 performance had been "robust", supported by the sale of Drax Generation Enterprise, which holds four CCGT power stations, to VPI Generation.

This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.

In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.

The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.

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