Harnessing the wind
This article first appeared in the June 2011 issue of Port Strategy and is reproduced with their kind permission. www.portstrategy.com
While the majority of ports worldwide have publicly recognised the importance of “greening” the port industry, integrating sustainability and clean energy into current operations without jeopardising profitability remains a major challenge for port operators.
Ports have been adopting various measures to reduce their environmental impact, such as utilising alternative fuels for their equipment, providing onshore power supply to vessels (also known as cold ironing) and utilising renewable sources for energy production.
Although wind power often takes a back seat to hotter topics such as cold ironing, utilising wind power, both onshore and offshore, for electricity generation can be a cost-effective way to reduce a port’s environmental impact. Wind generation technology is relatively advanced and noticeably cheaper compared with other forms of renewable energy.
In fact, onshore wind is one of the cheapest forms of renewable energy available and ports have increasingly focused their efforts on redeploying and redeveloping their assets to take advantage of the opportunities provided by offshore wind farms. This cost advantage should increase as fossil fuel prices rise and wind turbines become cheaper to manufacture.
Although installing wind turbines onshore involves an initial capital investment, the intention of the technology is to recoup the capital expenditure over time allowing the port to become self-reliant for its energy generation.
Much of the development required within the ports can be financed by the wind farm developers, and so the cost to port operators is often far less. As banks are more willing to lend finance to projects with a regular guaranteed income, it is possible that port operators may be able to use long term arrangements with developers (secured under power purchase agreements) as security to raise funds to upgrade and maintain other parts of the port or terminal.
While onshore wind supply can increase the green profile of a port and reduce its electricity costs, participating in the development of offshore wind farms provides ports with various revenue generating opportunities. Offshore wind farms provide ports with an opportunity to generate revenue by providing both onshore services such as providing land for substations, as well as providing offshore marine services such as towage and pilotage services from the shore to the wind farm.
In addition the nature of many ports and terminals lend to easier development appeal as the ports attempt to “green” themselves up.
There are a number stages and activities in which a port operator may have a crucial role in order to ensure the efficient delivery of offshore wind generation.
Firstly, for manufacture and construction, ports are well placed to provide an industrial hub for wind turbine manufacturers and their entire supply chain.
For example, port operators can provide land and facilities for the manufacture and storage of wind turbines and the construction of substations. Such an arrangement would be advantageous to the developer as building components for manufacture and storage close to the developing wind farm can reduce transport costs.
The wind turbines can be assembled on site within the port limits, and then can be towed to the offshore field. The most commonly used installation process to date involves delivery of towers, blades and nacelles at a construction site near to the wind farm; a terminal facility therefore provides and ideal location. The turbine can then be pre-assembled before being towed by a jack-up barge to the wind farm site.
Secondly, the assembled turbines will require shipping from land to sea for installation, and specialist vessels would be needed for this. These specialist vessels will need to berth and make regular use of a terminal. Further, port operators often provide or have access to marine services including pilotage and towage. Such services can be utilised in the movement of turbines, cabling and other equipment offshore.
Thirdly, port operating companies are essential to service the offshore wind farms and ensure that the turbines are kept in good repair. The average life of a wind turbine is calculated to be about 25 years, and regular maintenance and servicing is essential throughout its life.
Port operators can also provide housing for maintenance crews, and can provide the vessels necessary to respond to wind farm faults, as well as providing storage and repair facilities.
As the wind farms expand and are built further away from the coast, the use of helicopters and offshore accommodation is likely to become more commonplace for maintenance operations; port operators will be able to provide the necessary support.
The growth in the development of wind farms has created opportunities for UK ports, many of which are already taking advantage of the benefits that offshore wind farms can provide.
Benefiting from one of the most geographically diverse and substantial wind resources in Europe, the UK is currently the world’s leading generator of offshore wind power. Given that wind generation technology is relatively advanced and noticeably cheaper compared with other forms of renewable energy, offshore wind generation is one of the few projects for the generation of green energy that is fast becoming a reality in the UK.
There are fourteen offshore wind farms currently operational in the UK, six under construction and nine approved. This number is set to increase as the UK government has committed to the development of a significant number of offshore wind farms in order to help meet its UK target of sourcing 15% of its energy needs from renewable sources by 2020.
It is estimated that eventually there could be as many as 7,000 offshore wind turbines serving the UK with offshore wind, potentially making a contribution of up to 40GW to UK electricity generation capacity, which could amount to one third of UK electricity consumption
The UK government has made areas of its seabed available for the development of offshore wind farms in three rounds. Round 1 began in April 2001 and the bid and award programme for Round 3 concluded at the end of 2009. Round 3 offshore wind energy generation aims to deliver a quarter of the UK electricity needs by 2020. Delivery of this capacity will require a massive investment in onshore and offshore energy infrastructure and supply chains, and port operators will play a crucial role in development of these areas.
The growth in the development of wind farms has created opportunities for UK ports, many of which are already taking advantage of the benefits that offshore wind farms can provide. The Department of Energy and Climate Change estimates that approximately 1% of the total installed cost of an offshore wind farm is incurred in port related costs. This means that offshore wind farms provide a potential market for UK ports worth in excess of £150m per year, totalling up to £800m up to 2020. When operational and maintenance charges are added to this, the market could be worth up to £1bn.