The wind business is flourishing, and more RoRo cargo and more ship calls mean that the Port of Esbjerg has also delivered a satisfactory profit for 2018, explained Chairman of the Board Flemming N. Enevoldsen at the Port of Esbjerg's annual meeting. At the same time, the prospects for the port's three business areas seem generally promising – and a number of speakers believed the potential in the North Sea is far from realised yet.
"If in Denmark we succeed in seizing the opportunity, the wind hub of the North Sea may prove to be the green equivalent of the Norwegian oil adventure. The potential is enormous."
These were the words of the CEO of Energinet Thomas Egebo at the Port of Esbjerg's annual meeting at Musikhuset on 20 March. This announcement was met with smiles of expectation in the hall. Not least because it was thoroughly reinforced with facts.
Before that, Chairman of the Board Flemming N. Enevoldsen also presented financial statements for 2018 that he described as 'satisfactory'.
"The Board of Directors reviewed the financial statements this morning and it was approved by a satisfied Board. The profit confirms that the Port of Esbjerg is a thoroughly healthy business. That is a good basis for ensuring continued development and progress at the port," said Flemming N. Enevoldsen.
Turnover for the anniversary year amounted to EUR 30.83 million, which is largely unchanged compared to 2017, while earnings declined slightly to EUR 9.56 million. This was due particularly to the depreciation of investments made in conjunction with constructing the East Port and the new multi terminals.
Flemming N. Enevoldsen welcomed the guests to the annual meeting 2019. Bright prospects for the port's business areas
The RoRo cargo in 2018 was the highest in five years, and 1,210 MW offshore wind power was shipped, which is the second-highest level in the past five years. The Port of Esbjerg is expecting growth in both areas in the years ahead.
"The construction of the largest offshore wind farm in the history of Denmark off the west coast of Jutland and the large pipeline in the rest of Europe and the world means the prospects for our wind business are bright," Flemming N. Enevoldsen said, adding:
"Looking at RoRo and maritime traffic, the trend is for more and more cargo to be moved from road to sea. This is a natural consequence of the congestion crisis on European roads. And thanks to our size, location and direct rail and motorway links, the Port of Esbjerg is clearly a natural part of the solution," said Flemming N. Enevoldsen.
He also spoke of the unstable oil market but highlighted the redevelopment of the Tyra field as a ray of hope for the oil and gas industry in Esbjerg:
"The EUR 2.8 billion project will create thousands of jobs and many tasks for the port's resident companies, and will safeguard Danish natural gas production for the next 25 years. That is pleasing."
Investing in the future
Since 2000, the Port of Esbjerg has invested a good EUR 228 million in expanding and modernising the port, and the high investment level continued in 2018, when the Port of Esbjerg invested a further EUR 8.98 million.
At the end of 2019, the environmental impact assessment (EIA) under way for a potential port expansion of up to 1 million square metres is expected to be completed. According to the Chairman of the Board, the timing is perfect:
"Other parameters being equal, the development within wind power and RoRo will increase demand for port areas. And we must be ready to move fast to ensure we have enough space to accommodate our customers' needs, also in the future."
The audience paid attention as the financial statements for 2018 were presented.
New CEO: Unique range of business areas
According to Flemming N. Enevoldsen, the Port of Esbjerg is a business that is in good shape ready for the newly appointed CEO, Dennis Jul Pedersen, to take over. And the new CEO stepped onto the podium with a positive announcement and a humble approach to the job. After following the port from a distance over the past 12 years from executive positions in the offshore industry, most recently as CEO of NSG Wind, Dennis Jul Pedersen is impressed.
"The complexity of the tasks and range of business areas here in Esbjerg are unique," he said, underlining that the three main business areas generate good synergy.
"These are strengths I have not seen elsewhere in the world," he said.
Dennis Jul Pedersen will build on this foundation. He mentioned the experience gained from the Tyra field, which can be used in other parts of the world, and that the port houses one of the 21 shipyards that the EU has endorsed for recycling ships.
"At the same time, tasks as diverse as refurbishing marine engines and repairing drilling rigs are performed. Other examples of the circular economy are fish waste for biogas plants and the reuse of sand from dredging the entrance. And that is just the beginning," said Dennis Jul Pedersen.
Port of Esbjerg's new CEO Dennis Jul Pedersen says hello to his predecessor, Ole Ingrisch, who also attented the annual meeting.
The Danish equivalent of the Norwegian oil adventure
The next speaker was Thomas Egebo, CEO of Energinet. He focused mainly on the huge potential of the North Sea.
"There are opportunities for a huge export adventure," he said, comparing it to the success story our northern neighbours have enjoyed.
"The North Sea may be the starting point for a green equivalent to the Norwegian oil adventure through offshore wind," he said.
However, a range of challenges must be solved first. One of them is 'cross-border energy', said Thomas Egebo, highlighting that borderless collaboration is required spanning countries, sectors and energy chains.
"No one can singlehandedly manage the opportunities and challenges ahead of us. To realise the potential, we must team up to form an internationally strengthened alliance."
One opportunity is to establish a so-called 'Hub and spoke' vision – a kind of spider's web for electricity in the North Sea. This will save a good 30 per cent on construction costs. To date, new facilities have had to be built to transport the energy every time a new offshore wind farm is constructed. By taking the "Hub" approach and making an electricity web, the wind farms can be connected with fewer routes to the mainland.
Energinet is working with partners in both the Netherlands and Germany, setting goals to establish so-called energy islands in the North Sea. The project is called the North Sea Wind Power Hub. Here, energy from the offshore wind farms could be collected and sent on to recipients in a number of European countries.
"We are facing 'the second half' of the green transition. In order to succeed, we must have more and different resources in play. We believe that in the future, we will see power plants that ensure the energy assumes different forms and safeguard that North Sea energy can be used for fuel on roads or be converted into gas."
Today, 11 GW of offshore wind power comes from farms installed in the North Sea, and a new large 800 MW farm is on its way in the Danish zone. However, screening is being carried out for a further 10 GW in Danish waters alone. By comparison, the Danish consumption is about 6 GW.
"It is estimated that by 2040 there will be between 7 and 15 times as much energy from offshore wind compared with today. This could cover as much as 20 per cent of the total electricity consumption in the EU. So the new green export adventure I am talking about is based on these perspectives," said Thomas Egebo.
He believes that the project concerning energy islands is visionary and ambitious but also realistic.
"As it's based on existing technology, it's a matter of assembling the building blocks," he said, underlining that the North Sea's Danish areas have special, unique potential.
"In Denmark, our geographical position is like a 'silk road' for energy. Optimum wind conditions, shallow marine depths, good seabed conditions and a good port for shipping close by," he said, and his last sentence was rewarded with smiles and satisfied applause.
"In Denmark, our geographical position is like a 'silk road' for energy," said CEO of Energinet Thomas Egebo.
More potential in the North Sea
The scope in the North Sea was also a focal point for the final speaker Douglas Haldane, Vice President Joint Ventures & New Business at Total. Total is currently redeveloping the Tyra field to the tune of EUR 2.8 billion but he spotlighted many more opportunities.
"Total has come to Esbjerg to stay." Also after 2040, oil and gas will still be needed. We expect our production mix in 20 years' time to comprise 60 per cent gas and 20 per cent renewable energy," he said.
Total has come to Esbjerg to stay said Douglas Haldane, Vice President Joint Ventures & New Business. Esbjerg ready for Brexit
Last but not least, another extremely topical problem was also mentioned - Brexit. Chairman of the Board Flemming N. Enevoldsen pointed out that Brexit could mean more goods would be transported by ship in the future, e.g. between Denmark and England.
"There is a certain probability that a No Deal Brexit will increase the volume of goods in Esbjerg. Not because more goods will be exported to the UK, but because customs officials at the port terminals along the English Channel will be completely tied up in red tape, he said, explaining:
"If that is the case, Esbjerg is an obvious alternative because we have the capacity, areas, and ramps as well as the hinterland areas required for efficient operation."
The Chairman of the Board took the opportunity to express his gratitude for the excellent collaboration among the companies at the port, the authorities in the form of Skat (the tax authorities in Denmark) and the Danish Veterinary and Food Administration, and the Port of Esbjerg.
"Together, and in a very short space of time, we have found practical solutions for coping with the increased export of not least food to the UK – if the need arises. Naturally, we hope it will not because both exports and trade are at stake," said Flemming N. Enevoldsen.