Why ports have a future as green energy hubs

Ports as OSW manufacturing, marshalling and installation hubs

Offshore wind (OSW) is, and will continue to be, key to decarbonising the global energy system. Ports play two essential roles in making this happen.

First, as marshalling and installation (M&I) hubs, large ports store and pre-assemble turbine components before loading them onto installation vessels. These ports need significant space, heavy-duty quaysides, and deep-water access. Re-powering and decommissioning will become increasingly important for such ports too. Their second role is equally vital: serving as operations bases for maintenance activities, hosting the service vessels, spare parts, and crews that keep our offshore wind farms running efficiently. O&M ports are typically smaller than M&I ports and there is therefore potential for a wider range of ports to play a role.

The sector is growing rapidly, with global deployment of offshore wind expected to grow from 73 GW to reach 258 GW by 2030 (according to 2024 4C Offshore: Market Overview Report). The scale of change required to deliver this is immense and will only be met through the development of new greenfield ports in addition to huge expansions of existing ports. For the UK alone, estimates show that over £50 billion in construction capital expenditure is needed to deliver the OSW pipeline to 2030.

With investments of this scale, ports, local leaders and governments need to be strategic and look for potential synergies, which can increase the value that can be generated from their investment. This is something we explored through our work with the Offshore Renewable Energy Catapult, where we identified the infrastructure requirements and the associated business and investment cases for manufacturing and installation of floating offshore wind (FLOW) in the UK.

Our work highlighted that it may be desirable to develop regional port clusters which house both manufacturing at the same site as marshalling and installation facilities. This strengthens the case for port investment through stable, long-term leasing arrangements from manufacturers whilst boosting the wider port cluster offering. The broader development of the ecosystem would also encourage mature supply chains to become established, bringing further social and economic benefits.

These manufacturing facilities would require significant grid connections which could support wider electrification of energy users, enabling ports to commercialise this opportunity for other local transport and industrial users (more on this below).

Similarly, as port activities expand with the introduction of M&I and manufacturing facilities, local road and rail connections may need to be improved. By co-locating other hubs of activity including wider industry and other employment hubs, utilisation of these assets can be increased, unlocking social and economic benefits that extend beyond OSW operations.

There are community and employment benefits here too. OSW manufacturing and M&I ports require a skilled workforce – something which isn’t available in every location. As part of our Australian Offshore Wind Market Study, we calculated that for transport and installation alone, 1,844 FTE jobs are created per GW of OSW installed. By clustering M&I ports with manufacturing and sectors with similar labour requirements such as alternative fuels production, ports could become a hub that attracts and maintains the necessary skilled labour.

Ports as sustainable fuels hubs

A resilient, low carbon and cost-effective global energy system will require sustainable fuels as well as green electricity. Hydrogen-derived, bio-derived and carbon capture and storage-enabled fuels, can – when produced in the right way – provide effective routes to decarbonisation for industry, heavy transport and power systems. Ports will play a role in the production of these fuels, transporting them within and across borders, and distributing them to local off-takers, including ships.

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Locations with significant renewable energy generation potential can produce these fuels at a lower cost. These locations – primarily in the Global South – are often remote from demand centres in the Global North. Our research has shown that the cost of transporting these fuels is small compared to the cost of production. This means we might see regional supply and demand systems. For example, hubs in North Africa producing fuels for Northern Europe, complementing domestic production. Through green energy terminals, ports will therefore be crucial in providing connectivity for the trade of these fuels (and similarly for captured carbon).

Some forward-looking ports are already preparing for this future. For example, Arup are working with green fuels company, Vast Renewables and its consortium partner Mabanaft to project manage the development of its green methanol plant, SM1 which is part of the Port Augusta Green Energy Hub in South Australia. The project’s success could unlock green fuels production in Australia and enable exports to global markets.

The bunkering sector will also change. Ports already play a key role in distributing fuels to marine users, but the today's marine fuel market operates through a handful of dominant bunkering hubs, which serve as strategic refuelling points along major shipping routes. There will be a shift in market dynamics with the introduction of sustainable fuels which may require both a more diverse network to handle multiple fuel types and a geographically dispersed system to account for alternative fuels' lower energy density. Ports who currently do not participate in the global bunker sector may have an opportunity to capture a share of this new market.

This is something we explored with the Port of Tyne, where we assessed the feasibility for the port to become a methanol storage and bunkering hub for the Clean Tyne Shipping Corridor to Europe.

Ports as hubs for electrification

Ports are naturally intermodal transport hubs, acting as the interchange of ships, road and rail in the movement of goods and people. Increasingly, these services are seeking to electrify, whether that’s with onshore power for berthed vessels, or the replacement of diesel HGVs with battery-powered alternatives. This is to reduce the carbon intensity of their operations, but also to mitigate local impacts to communities and the environment. There is an opportunity for ports to enable electrified, smart mobility for both land and sea.

One challenge will be how to meet the significantly increased demand for electricity. Ports are typically energy-constrained but grid upgrades are costly and often have long lead times. There is therefore a role for ports as energy generators as well as consumers to reduce reliance on the grid and lessen the scale of grid reinforcement required. This will include a combination of on-site renewables, energy storage and ‘private wire’ connections to dedicated off-site renewables. For example, in the USA, Arup worked with Aurora Marine Design to develop a Zero Emission Vessel Feasibility Blueprint for the San Francisco Bay Ferry. Arup’s analysis found that the Downtown Terminal could see a peak demand of 17 MW which would not be feasible with current capacity constraints. The Blueprint, therefore, provided guidance on meeting each terminal's power requirements by deploying a battery energy storage system.

Similarly, in the UK, Arup has been supporting the Port of Dover with their green corridor energy strategy and high voltage infrastructure plan. With the introduction of a battery-electric vessels on the Short Straights between England and France, we found that the port’s electrical power demand could increase up to 20 times current levels by 2035. This represents a significant challenge – one which requires careful planning to consider how the port’s power demands fit into the future local energy system.

By acting as hubs of significant electrified demand and supply, ports have the potential to become catalysts for wider change, playing their part in a resillient energy system that delivers for both industry and local communities.

The port-city connection

As part of our ongoing partnership, we’re supporting a workshop C40 Cities’ Green Ports Forum in Barcelona in November to explore some of these developmental challenges and the collaboration between ports and cities that will be required to realise the sector’s potential. In early 2025 we’ll be publishing a joint paper on the role of port cities in accelerating the development of ports as green energy hubs, with a focus on the socio-economic benefits to cities themselves. This will be the next joint publication which builds on the work completed on the governance of green shipping corridors published earlier in 2024.

Next year, we also will be publishing a report around sustainable fuel import and export hubs, exploring the latest technologies and approaches for producing, storing and transporting fuels of the future.

Keep an eye out for more on these publications in the new year.