Tech Talk | Energy models for Europe’s ports

Various energy business models are available for ports for electrification and decarbonisation to enable them to play a pivotal role in the energy transition and move towards net zero.

As self-contained, largely industrial entities with heavy energy usage they provide a base and testing ground for low carbon technologies and decarbonisation.

But they also are crucial interconnections between their hinterlands and the wider world for the transit of goods and products such as fuels.

As such several of the ports in Europe, as elsewhere have initiated clean energy strategies and solutions, but many are still grappling with hurdles, typically those observed in other sectors including securing funding for electrification to delays in electricity grid capacity expansion and difficulties in defining viable business models.

With this in mind, a study was undertaken for the European Commission by consultants DNV, Trinomics and LBST with the primary objective to offer insights and guidance to decarbonise European ports.

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Clean energy business models

The study delineated five clean energy business model categories, with each one subsequently matched for detailed analysis to a specific model(s) at one of five ports identified as front runners – Gothenburg (Sweden), Kristiansand (Norway), Marseille (France), Rotterdam (the Netherlands) and Valencia (Spain).

These are onshore power supply with a focus on the onshore connections and adjustments needed to the energy infrastructure, the decarbonisation of port operations including energy efficiency measures, the role of ports as ‘energy hubs’ with a focus on onsite renewable energy production, the introduction of new business models with a focus on opportunities related to the energy transition outside traditional port activities, and smart grids with a focus on integration of renewable energy sources and flexibility of the energy system and its management.

The study found that the replicability of these business models in most cases is conditioned by the availability of energy infrastructure in each individual port and access to electricity supply via the grid and/or own onsite generation.

The onshore power supply systems stand out as the most demand-driven electrification project and concurrently are the preferred choice for berthing decarbonisation.

Medium-sized ports like Gothenburg or Marseille are estimated to have annual onshore electricity demand ranging from 55 to 61GWh between 2030 and 2050, while smaller ports like Kristiansand from 22 to 23GWh, potentially doubling or tripling their current requirements.

Meanwhile, the larger ports like those of Valencia and Rotterdam are forecast respectively to demand around 150GWh and nearly 300GWh by 2050.

With the exception of Kristiansand, in all other cases, this poses challenges to grids and electricity supply.

Port barriers and challenges

A significant barrier is the need for electricity grid capacity upgrades to provide sufficient power for large ships and the local port grid due to electrification, particularly in remote areas with limited infrastructure.

Overcoming this barrier requires the reinforcement and extension of the electricity grids, enabling a reliable power supply for ports and shipping companies. Local electricity production, such as solar and wind energy, can be part of the solution, although high investment costs and intermittent production may pose challenges.

Another major barrier is the energy infrastructure investment costs, e.g. for building new substations and transformers and adding transmission lines, onshore power supply and electrification equipment, such as electric cranes.

Limited funding or budget constraints can make it harder to allocate resources for such developments but combining business models such as onshore power supply, electrification, onsite energy generation, etc. and strategic planning for the long term can increase the funding options.

Another issue set to become more evident as more electrification and clean fuel technologies are implemented by ports and other industries is the lack of a skilled workforce and increasing competition for these workers.

Port training programmes to facilitate the transfer of knowledge and skills and new vocational education programmes must be taken now to prevent the knowledge and skills gap.

For clean fuels, the availability of space, including safety distances, can be an important barrier affecting local renewable hydrogen production and storage. For example, hydrogen needs considerable space to store at the surface in gaseous form, or considerable energy to liquefy.

The second most prominent barrier for low carbon fuels, and more specifically hydrogen, is permitting. To resolve this barrier, the best action is the clarification and streamlining of legislative and regulatory frameworks at the EU and member state levels.

Business model implementation

The analysis found that all the considered types of clean energy business models can in practice provide positive net benefits, with the effects largely dependent on the specific characteristics of the port, its physical environment, the actual energy prices and emission costs, and local and national regulations.

A key finding is that suitable measures can enhance and accelerate onshore power supply implementation. In particular onshore power supply shows in general a positive business case when the environmental and social costs and benefits are also considered.

Promoting terminal electrification is another essential element on the path towards sustainable operations, generally having a short payback period and a substantial emissions reduction potential.

Ports that operate as energy hubs also can accelerate the energy transition by facilitating renewable energy generation and hydrogen generation and use, especially those with high land availability.

They also can be facilitators to interconnect energy networks and markets.

Another finding is that port authorities should support and facilitate the implementation of smart energy systems and they should consider cooperating with the local electricity DSOs and TSOs on planning for future capacity needs.

They also should consider cooperating to provide training to ensure availability of an adequately skilled workforce.

Jonathan Spencer Jones

Specialist writer
Smart Energy International

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