Focal firm stakeholders

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power electricity (Steiner-Dicks, 2015). The off-grid wind power significantly improves the living standard in these small communities. There are still challenges in terms of raising funds for such development. But more and more investors, energy companies and governments start to see the benefits to scale up wind infrastructures, such as in South Africa (Steiner-Dicks, 2015).

To conclude, in improving social well-being in the wind energy industry, the industry’s business operation has much impact on ensuring access to affordable and clean energy for all.

In other words, the wind energy industry in the social dimension fulfills the stakeholders beyond the supplier chain’s interest in sustaining social well-being by providing global citizens access to electricity.

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Figure 15: Life cycle of the wind power plant. (Source: Vestas, 2019).

Vestas’ effort on eco-efficiency is evident in the quantities of avoided CO₂ emission for the product lifecycle and its entire fleet increased year by year in Figure 16. It can also be seen in Figure 17 where the total consumption of resources exhibits a decreasing trend while the renewable resources utilization is increasing. In other words, Vestas’ efforts on eco-efficiency improvement have paid off, as less energy is consumed in production, which indicates a cost reduction.

Figure 16: Product avoided CO₂. (the authors’ own creation based on Vestas, 2020b)

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Figure 17: Utilization of resources. (the authors’ own creation based on Vestas, 2020b)

5.3.2. Supply chain stakeholders

Away from the traditional linear approach of creating and delivering a product or service that is disposed of at the end of its life, the circular economy represents an opportunity for businesses to regenerate and recycle the resources. Circle economy does not only look into the environmental impact from focal firm’s turbine but also the environmental impact and resources used by all relevant upstream and downstream processes within the energy chain (Ellen MacArthur Foundation, 2013).

Wind energy Life cycle assessment (LCA) are usually divided into five phases: Construction, On-site erection and assembling, Transport, operation, and Dismantling including removal and recycle (WindFacts, n.d.). As aforementioned, end-of-life recycling has the second most environmental impact (Razdan & Garrett, 2019). At the dismantling stage, the easy solution is to dispose of the turbines in a landfill as it might be less costly than to transport the turbines to the limited recycle facilities (CleanTechnica, 2020). The policy maker could support the construction of recycling infrastructures or provide regulation or incentive to drive the

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alternative solutions to incentivize the company to do recycling.

It is vital that the suppliers in wind turbine also commit to reuse the materials or reduce the waste and devote in using regenerate natural resources (SupplyChain, 2021). Vestas currently are engaging with 10 suppliers, who cover 20 percent of the material spend, in carbon footprint and circularity initiatives. Vestas set its expectation for the suppliers to commit to carbon emission initiatives and waste reduction targets. In that respect, Vestas supports its main suppliers in developing strategies to reduce the emissions and rewards the suppliers who reach the target with sustainability partnership. Vestas collaborates with its suppliers in developing sustainable materials or solutions to increase the recyclability of wind turbines (Vestas, 2020b).

In 2020, Vestas aimed to create a value chain that generates no waste materials by implementing a circular economy strategy in the value chain (Vestas, 2020b). Vestas wind turbines are about 85 percent recyclable but presenting challenges in making rotors recyclable.

In 2020, Vestas declares its commitment to zero waste turbine by 2040 in order to improve rotor recyclability and eliminate waste across the supply chain (Vestas, 2020b). In this respect, Vestas joins the DecomBlades project and works collaboratively with other major wind OEMs, recycling companies and knowledge partners, such as Siemens Gemesa, Ørsted, FLSMIDTH, and DTU, to identify sustainable recycling routes for end-of-life turbine blades and support the development of material for recycling routes (Vestas, 2020b).

Vestas also supports SusWIND project aiming in finding feasible ways of recycling composite materials by cooperating with leading stakeholders in the composites and energy sector.

Moreover, working closely with universities and suppliers to develop technology and materials to increase the recyclability of turbine rotors (Vestas, 2020b).

Vestas has launched a venture capital unit Vestas Venture in late 2020 to invest in startups in

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four sectors to create sustainable products and low carbon value chain: long-duration storage and other grid flexibility technology, "power-to-X" technologies, wind energy technologies, and sustainability and advanced materials (Parnell, 2020). Vestas Venture in January 2021 marked their first official investment in wood technology start-up Modvion, which develops and produces wind turbine towers made from laminated veneer lumber. The wood turbine tower expects to reduce carbon emissions by 80 percent compared to the conventional steel tower (Cision, 2021).

5.3.3. Stakeholders beyond the supply chain

Under the pressures from the stakeholders, the focal company cannot avoid responding to environmental issues. During the production process of wind turbines, water consumption for manufacturing steel and cement for wind turbines is relatively low, thus minimal impact on water pollution. Based on the study conducted by National Wind Coordinating Committee (NWCC) in 2010, NWCC concluded that the impact of wind turbines on wildlife such as birds and bats is low and not a threat to species pollutions (UCS, 2013). It can further reduce the impact on wildlife and habitat by developing advanced wind turbine technology and better siting of wind turbines. The offshore wind turbines might also affect the marine wildlife and also require better siting.

In terms of resource depletion risk, compared to a coal-fired plant, overall resource depletion risk of green energy is low, but there is some increased level of mineral resource depletion (Lieberei et al., 2017). This raises the awareness of the security of mineral supply. Developing alternative technologies to mitigate the supply risk is a key activity for wind turbine companies.

For instance, wind turbines consumed a few scarce mineral commodities, such as rare-earth elements needed for the manufacturing of permanent magnets for wind turbine generators (USGS, n.d.). Vestas's turbines using conventional drivetrains consume 10 times amount less

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rare-earth elements than the direct-drive turbines and contribute to below 0.1 percent of the life cycle (Vestas, 2020b).

The reduction of greenhouse gases emission ranks high on international political and scientific agendas (Jonas et al., 2019). The countries around the globe are committed to lowering their emissions to minimize the greenhouse effect. More and more people care for the environment and try to make a change in their daily consumption by buying more green products and support renewables. Renewables are catching the green trend that induces more countries to choose to develop renewables energy to respond to climate change.

Wind power is one of the sustainable energy sources and no greenhouse gas emission is associated with wind turbine operations. But there are emissions in the life-cycle of a wind turbine. Based on IPCC special report on renewable energy sources and climate change mitigation in 2011, the wind turbine life-cycle global warming emissions are estimated between 0.02 and 0.04 pounds of carbon dioxide equivalent per kilowatt-hour compared to between 0.6 and 2 pounds emitted by natural gas generated electricity and between 1.4 and 3.6 pounds for coal generated electricity (UCS, 2013). Hence, wind generated electricity is preferred due to its low impact on the greenhouse effect.

Due to the advanced wind technology, the installation costs have lowered markedly resulting in the levelized cost of electricity of wind energy declining rapidly in recent years. Specifically, the cost of onshore wind turbines has fallen by 37% in the past decade (Acciona, n.d.).

Consequently, the low environmental impact and cost advantages of wind energy helped the energy transition in many countries to gradually replace the dependences on fossil fuels with wind resource and scale up renewables by investing in wind farms, wind projects and the issuing of green bonds. In this regard, a country like Vietnam with an annual 13% increase in electricity consumption (Le, 2019), its government supports renewables source and approved

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7 GW in new wind projects for construction in 2020 with a forward looking with reach 12GW in 2025 (Ha, 2020). In Dec 2020, Vestas captured two 50 MW projects from Phu Dien JSC in Vietnam and brought Vestas’ total order intake in Vietnam over 1GW in 2020. The contract also secures a 20-year long-term service agreement (NS ENERGY, 2020). In its China market, Vestas's past 1GW order intake and with long-term service agreement in 2020 as well (Ruengchinda, 2020). Likewise, Vestas has also pulled in orders from Japan, Taiwan, and the UK in 2020 that demonstrate the demands for renewables and the attractive market Vestas is in (Vestas, 2020a). The growing governmental wind projects in these countries indicates government’s effort in creating cleaner energy source. The market demand has made impressive gains in the energy sector.

It is imperative for Vestas to have easy entry and growth in the markets, where governments are satisfying their electricity with renewables and media are promoting green energy. The wind energy sector in this context is claimed to have positively contributed to the global energy situation. The sustainable development in the energy sector has helped to ensure Vestas’s current and future revenue for at least the next 5 years. The interest of stakeholders beyond the supply chain in wind energy has helped companies like Vestas to attain a higher growth rate.