The point of Arrival of e-harbours: Findings, Lessons learned and Recommendations

Things that e-harbours found: our top 10

  1. For large harbours, finding flexibility is the key
  • The e-harbours project was funded on the premise that harbour regions – with their enormous demand for energy – would have substantial amounts of untapped ‘flexibility’ within their energy systems; flexibility that could be captured and exploited by smart solutions. Because of the wide variety of energy consumers in harbour regions, who use energy for different purposes at different times (and perhaps have the capacity to defer when they use energy or even store energy when there is excess production), there is the opportunity to shift – enough – energy demand at certain times so that it better matches the supply of intermittent renewables.
  • Some of these initial assumptions have proved to be correct. For example, flexibility is needed to maximise the benefits from the production of local renewable energy. Such flexibility is available in large quantities, especially at medium and large industrial plants and in the batteries of e-mobility devices. This flexibility is ready to be exploited. Our energy audits have demonstrated a large amount of flexible electricity capacity available at large industrial users, in the order of approx. 5-15% of total electricity costs.
  • Smart consumption enables flexibility, thus enhancing the security of the supply chain. Most of the EU-countries have enough short term flexibility, and partly, that is already exploited by large producers and consumers. These early adopters can make money and can inspire other end-users. We need to start enabling more suppliers of capacity to meet future demand for flexibility.

  1. Costs are the key driver for consumers
  • Adding more renewables (without changing the energy system) will increase differences between supply and demand, putting a strain on security of supply. Smart energy systems will help stabilize the grid, and make costly investments in grid capacity superfluous.

  • But consumers do not realise how precarious their power supply is. They currently have their energy demands met and there is energy available when they need it. So, there is little economic or public pressure to introduce smart energy initiatives or optimise energy supply and demand. It is ‘somebody else’s business’.
  • Harbour businesses and stakeholders are motivated to make money or reduce costs. There must be a financial incentive to invest in smart energy systems. Our case studies show that capturing flexibility or increasing the uptake of local renewable resources can reduce energy costs by up to 20% in large harbours. For e-mobility applications electrical storage potentially can bring even higher rewards. That is the incentive to embrace smart energy (in theory).
  1. The potential to find flexibility and deliver smart energy varies

  • Some of our initial assumptions were wrong. ‘Classic’ models of energy flexibility suggest that there will be substantial amounts of energy to be captured by linking industrial plants which need to ‘dump’ excess energy (e.g. from refrigeration processes) to those which require large amount of energy for heating. While we found some flexibility in cold stores, for example, we found much more in large industrial production facilities such as chemical plants or sludge processing.
  • Scale is also critical. We expected to find the same potential to capture flexibility and exploit smart energy solutions in harbours of all sizes. However, for flexibility we find that economies of scale are vital and there is likely to be little or no commercial flexibility in small harbours.

Our wish list: topics for future research in large harbours

  • Start pilots on (virtual) taxing and fair pricing of network costs, balancing, and reserve capacity. Seek a larger scale: complete harbour areas. Think of Metropolitan areas such as Amsterdam, Hamburg, Antwerp & Malmö. Renewable sources and energy management as a starting point, fossil sources used only as a backup.

  • Encourage exploitation of industrial residual heat, combined with ‘power to heat or refrigerate’.

  • Focus on maximizing usage from green peak-production in ‘heat’ or ‘refrigeration’,
    Do not neglect the niche: research possibilities of process interventions (e.g. fish label)

  • Focus on avoiding peak demand. Do not neglect the niche: research possibilities of local fossil backup production (e.g. diesel cranes or hospitals).

  1. E-mobility is a key element of a future smart system concept
  • Because of the numbers of vehicles and vessels operating within a defined harbour hinterland, electric mobility is one of our four pillars of smart energy and energy optimisation. Electric cars, boats and vessels, HGV’s , specialised harbour vehicles, buses, cranes and reefers offer great potential as part of smart energy systems.

  • Our partners in Zaanstad and Malmo have shown how this can be done at a small scale with electric cars. Our partners in Amsterdam have demonstrated that electric boats have a role to play. Our links with other European projects have shown that there are potentials, from hybrid ferries (Scotland) to powering heavy harbour vehicles through induction or overhead power charging (e.g. Siemens).
  • The challenge is to scale up and get these pilots into the mainstream. Vehicle technology is improving but the high cost of e-mobility and battery load cycle limitations remain barriers that have to be overcome. Scale is also an issue.
  1. The theory (and technology) works but the business cases do not

  • We have identified business cases for smart energy which have yet to be exploited. There are three main issues why theory has not yet been translated into action:
  • No sense of urgency: In many businesses, current energy costs are low compared to the total cost of production or operation, too low for most users to start implementing smart energy systems. An energy share of 20% of total running costs can be considered as a threshold for action. Also, security of energy supply is still perceived very high, since there have been very few major blackouts or power quality issues yet, despite the grids often operating at their limits. As a consequence, there is no real sense of urgency among stakeholders (business, government, consumers) to exploit smart solutions.
  • Limited business potentials: There are currently only few options to earn money by exploiting flexibility. The value of flexibility is still quite low and the key policy drivers are currently negative. There are opportunities even now for early adopters to make money, but it has not yet become “common sense” to look at flexibility as an economic asset.
  • Internal issues: With much of the challenge being about changing the mind set of individuals within an organisation, addressing the organisational pillar is one of the key challenges for exploiting flexibility. Unclear or dispersed responsibilities or scepticism against innovations can prevent a good concept from being implemented, even if technical solutions are there.
  1. Existing regulatory and fiscal regimes are not helpful

  • On the topic of flexibility, there is no such thing as best practice that can be exchanged internationally. Energy markets, tariffs, subsidies, fiscal and regulatory regimes vary too much from country to country. So what works in The Netherlands might not work in Germany.
  • Energy markets misdirected by uncoordinated policies (taxes, levies, juridical barriers) can produce suboptimal results. We need standardisation and coordination of policy. Identifying and exploiting available flexibility also requires tailor made solutions. Local conditions require local analysis and local business cases, local expertise and local energy. Without standardisation, localism is the only approach.
  • Energy regulation should encourage – not discourage – opportunities to develop ‘private energy areas’, so that a number of local energy consumers can combine to create a virtual power plant.

  • In some countries (like The Netherlands), there is a trend towards higher taxes on energy tariffs at the expense of variable base pricing, reducing the difference between peak and off peak energy. The basic production price of energy is relatively low across Europe, but additional taxes and fees are rising sharply and now make up the larger part of the energy bill. In most countries, the consumer is best off when he can avoid taxes through local production, but present definition of local/private networks needs be reconsidered. New legislation and juridical frameworks would assist us to exploit flexibility.
  • Putting more money in renewable energy can still help to realize the energy goals of the European Union, but there is more to be gained. Create added value by investing in smart and flexible integration of renewables. Stimulate the development of markets for flexibility (like the capacity market), and make public funding available for smart energy investments.
  1. One size does not fit all

  • While a lot of flexibility can be found in big harbours, small harbours (like Scalloway and Fraserburgh ) , with only a handful of significant energy consumers and a limited range of industries at hand – can provide little or no commercial flexibility. But there are significant opportunities for promoting energy efficiency, raising awareness and promoting more local renewables. These are relatively low cost solutions for small harbours. And if every small harbour in Europe can reduce demand by a MW hour…
  • Many of these small harbours are situated in – often remote – regions where there is great potential for renewable energy. In Shetland and Orkney, the local grids are already operating at or close to capacity. For these port hinterlands, a grid that cannot absorb increasing volumes of renewables is a reality rather than a theory. These areas are a microcosm of the challenges that Europe as a whole will have to face in the future.

Our wish list: topics for future research in small harbours

  • Start an energy-awareness programme for small harbours.

  • Incentives for cooperation to overcome split incentives, or deviating processes.

  • Support local energy service companies in starting-up businesses on this topic. Think EU, act local.

  • Look for ways to increase the energy efficiency of fishing boats.

  1. Regenerating harbour areas provides opportunities
  • Harbours expand, diminish, flourish and – occasionally – fail. Historic harbours often have lots of land to regenerate and rejuvenate. Harbour municipalities are leading the way in terms of energy management, renewables and energy flexibility.

  • Embedding smart energy in regeneration and new development provides better opportunities than retrofitting, finding business cases in existing harbour operations. Smart energy based rejuvenation and regeneration can lead to a high quality of life for its inhabitants and potential inward investors, and leave municipalities in a strong economic position to compete in their ‘post-harbour’ eras.

  1. Despite the challenges, our message is getting across

  • We experienced a gradual raising of awareness among e-harbours industrial partners and other stakeholders on topics like renewable energy and smart energy systems. Harbour authorities, industrial partners, municipal colleagues and other stakeholders are genuinely interested in the issues and of the potential of smart energy optimisation in harbour regions, and of the potential to harness some of the business cases that we have identified.

  • But while industrial partners are interested in energy saving and flexibility, they will not modify their ‘core business’ to accommodate it. The message is clear. Profitability comes first, smart energy flexibility comes second.

  1. And occasionally you uncover something exciting.

  • Our partners in Hamburg and Belgium have found that reefers (refrigerated containers) can form a substantial and important source of future flexibility. Further work will be carried out with harbours stakeholders to develop smart energy solutions to capture the flexibility offered by these cold containers.
  • Another example – our partners from RGU carried out some analysis to develop an energy label for fish. In doing this work, they found it takes around 1 MW hour of energy to catch, process and distribute a tonne of haddock. In contrast, a tonne of Mackerel requires around 7% of this amount. Clearly, there is a potential for improvement here.

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