European ports: the green energy hubs of the future
2022 was a pivotal year for Europe’s energy transition. The energy crisis has had a multiplier effect on clean and renewable electricity rates as witnessed by renewables’ record share of the EU energy mix. Last year, for the first time, wind and solar accounted for 22% of EU electricity, outweighing gas (20%) and coal (16%) – according to a new study.
While moving in the right direction to meet Europe’s decarbonisation and energy independence targets, however, electrification rates must speed up. Meeting net zero by mid-century requires all sectors of the economy to be electrified, especially those traditionally reliant on fossil fuels. Transport is one such sector, accounting for a quarter of EU emissions.
Ports can play a key role in the electrification of the European fleet, whether on the road, via sea or by air. Their strategic location near sources of renewable energy, such as offshore wind and solar, together with their proximity to existing infrastructure for storage and energy distribution makes them the ideal site to become green energy hubs.
As shown in our report Ports: Green gateways to Europe, these hubs-to-be often act as bridges among different industrial sectors. This creates a huge potential for the electrification of shipping and port activities as well as maritime, road, rail, and even air transport.
Our Secretary General, Kristian Ruby has recently discussed the key to unlocking ports’ untapped potential in a high-level meeting hosted by the Swedish Presidency on accelerating the electrification of transport in Europe.
Electrify everything that can be electrified…
There are many solutions to turn ports into green energy gateways. Clean and renewable power is their common denominator.
First, several port-related activities can be decarbonised via direct electrification. These include electric cranes and logistical vehicles for bunkering logistics and freight handling, as well as powering offices and buildings, cold storage, and service vessels, such as pilot boats and tugboats, with renewable energy.
A significant actor in such activities is the European industry. Ports can contribute to electrifying industrial processes by acting as the nodes for huge quantities of renewable capacity. This would in turn increase industrial energy efficiency and potentially halve their fossil fuels use thereby improving the local electricity grid and supporting utility services and other electricity production facilities.
Docked Ships offer another possibility for carbon-free electrification, known as cold ironing. This means replacing running engines and diesel generators used for onboard activities with clean power from shore to reduce local air pollution, cut emissions, and improve the noise. Cold ironing is already a reality in the ports of Copenhagen, Stockholm, Helsinki, and Aarhus. A joint initiative between these Nordic ports is now showing how onshore green electricity can effectively power berthed vessels.
When located near offshore wind farms, ports can also function as natural conduits for the integration of offshore wind into the power system. If wind capacity exceeds the distribution grid’s host capacity, ports can help balance the grid by enabling renewable power to be exported to nearby industry clusters, or for electric roads, rivers, and short-distance sea transport. This not only facilitates renewable integration but offers a cost-efficient alternative to storage while avoiding curtailment.
These synergies can only be attained with the proper infrastructure to support them. This is why increasing investments in distribution grids and storage is crucial to boosting the massive capacity upgrade required to enable energy system integration.
….and when direct electrification is not possible…
Direct electrification is the cleanest and most energy-efficient carrier available today. Yet not all sectors can be directly electrified. Green hydrogen is a valid alternative, as both an energy carrier and feedstock, to decarbonise hard-to-abate sectors.
Some ports are natural hubs for connecting offshore wind and can therefore exploit their privileged access to abundant renewable electricity to produce green hydrogen through electrolysis. When used as feedstock, hydrogen can provide carbon-free fuels to replace oil and emitting fuels in difficult-to-decarbonise sectors such as aviation and intercontinental shipping. This is why it’s safe to assume that hydrogen can become economically competitive in ports sooner than in other locations.
Europe’s Green Gateways
Unleashing the potential for ports to become the energy hub of the future requires a concerted effort and collaboration between the private sector, research institutions, and government agencies.
Policymakers should streamline the regulatory process and provide incentives for the development of renewable energy projects at ports and the integration of offshore wind. This includes funding for research and development of new technologies, as well as tax breaks or other financial incentives for companies that invest in renewable energy at ports.
The EU’s gradual phase-out of internal combustion engines by 2035 and the proposal to extend its Emission trading System to the maritime and aviation sectors signal positive developments in this direction.
Clear incentives are key to guiding increased private investment. Investors should prioritise a combination of renewable energy, infrastructure, and sustainable transport solutions that adjust to the specificities and ad-hoc needs of each port. Enabling integrated ad-hoc approaches requires further research – including expert groups and feasibility studies – to navigate the plurality of technology options and design the most efficient long-term decarbonisation strategy for each context.
With all hands on deck, industry and government can realise this vision, so let's make it happen.
