Episode Transcript
[00:00:07] Speaker A: Hello everyone. We're in for a true treat today because I have with me Mr. Ivan Jimenez, who is leading one of Europe's most ambitious post port energy transformation, the renewable community energy model of the Port of Bilbao. Please join me.
[00:00:32] Speaker B: Now.
[00:00:33] Speaker A: This groundbreaking initiative integrates port electrification, renewable energy production and advanced energy storage systems to create a shared, democratic and cost effective energy ecosystem supported by the European Commission's CEF program, transport program and European investment banks, Climate bank and the Basque Energy Agency. You have everything, right?
[00:00:59] Speaker B: Yeah, but we are looking for even more. Okay, we've got ideas and projects.
[00:01:04] Speaker A: That is good to know because the project mobilizes already a total investment of 115 million euros, with more than 80 million already awarded to subcontractors as work progress. You need to tell me how I can become one subcontractor now. This model not only decarbonizes port operations, but also enables energy sharing across shipping lines, industry terminals and other port stakeholders. A pioneering example of cooperation between the port authority, private industry and the local dso. Truly unique. So what inspired the Port of Bilbao to develop this renewable community energy model and what key challenges does it entail?
[00:01:46] Speaker B: Well, we started in 2021 with this idea.
Within that, and this is quite special in a port that everything is related to disruptive innovation.
So I mean, sometimes or most of the time, disruptive innovation doesn't come from the market. People are not asking for that. If you ask about it to the different players in our ecosystem, they are not really asking for that. But there is a global trend, there is a need.
[00:02:18] Speaker A: And.
[00:02:18] Speaker B: And there was also the idea of the European idea. I mean, at the beginning it was the European Green Deal, but also now we see that now it's compulsory through the fit for 55 directives.
So at that moment we thought that once we had to go through this way, we have to try to be one of the frontrunners, I mean, because we see that as a future.
So the idea is to be the first port in the Atlantic Arch to be absolutely electrified by the end of 2027.
In fact, the obligation is for 20 to 30. But we think that this could be an opportunity for the port to gain, not only when it comes to sustainability related to environment, but also when it comes to the other parts of the sustainability. I'm talking about sustainability and social sustainability.
So we see that as an opportunity. And as I always say, as some centuries ago, ships changed from seals to coal and they started going to the ports that provide them with coal. Now we want to be one of the first to Provide them with electricity.
[00:03:43] Speaker A: So basically, the port fits into the various European Commission goals, also through a decarbonization pathway, right?
[00:03:50] Speaker B: Exactly.
[00:03:52] Speaker A: Could you explain how this electrification through OPS integrates with renewable generation and energy storage systems?
[00:04:01] Speaker B: Yeah, we see it as an overall coordinated project.
So everything must go at the same path, at the same rhythm, because otherwise you don't get the target.
So basically, let's say the base of everything and the backbone of everything is the electrification.
So for that we are investing about 60, more than 65 million euros just for the electrification, to connect the different docks to the vessels. And that will be one of the key questions. Whether the vessels are ready or not, that's another question.
That's the backbone of everything. But of course, at the same time, nowadays, for example, all the energy provided by the port of Bilbao is green energy, 100% green energy, but not produced by us. So the idea is to gain not only when it comes to competitiveness, to the creation of consumption community, but also to the environment advantage, competitiveness and environment advantage. And so the idea is, okay, the backbone is the obese. And then secondly is how to create our own green energy. And for that the project keeps also in mind the solar plants and also wind turbines. We've got also some wind turbines at the moment, but we are going to refit them to take more power from them and then the storage. Okay. Again, we are thinking about sovereignty of the port.
So if one day happens again, what happened some months ago, that blackout, we are ready for that as a basic infrastructure of the country. So everything you need to take into consideration everything. And of course, in the heart of is the digitalization, how to manage that, and the combination with the dso, of course.
[00:06:09] Speaker A: Funny that you mentioned competitiveness. There's a very interesting session just after us that they're going to discuss industrial competitiveness. But you mentioned renewable energy sources. It is quite windy here. So wind would have been my number one, let's say.
Yes, but am I wrong? Because you mentioned other things. You mentioned the sun. What are the sources?
[00:06:31] Speaker B: Well, this is not the most sunny place in the world, as you know.
And the advantage with the wind, you know that you've got it at night and during the day also. So, yes, the main source of energy, of course, will be wind.
And the question is that it will be onshore. So offshore is always much better, much powerful. So the idea is to get 50 megawatts by 2030.
[00:07:01] Speaker A: Good luck with that. That's quite ambitious. Sorry for interrupting you.
[00:07:04] Speaker B: It is. But as we did Guggenheim in the lands of the port, because the Guggenheim mission used to be part of the port of Iblau.
That's why the shape is a ship shape.
We are ready to do it. We are really ambitious. And so far things are going according to the plan. But yes, wind power will be one of the key questions.
[00:07:28] Speaker A: How does this energy sharing mechanism work, however? Because we have shipping lines, terminals, industries and various other stakeholders.
[00:07:37] Speaker B: Yeah, well, first of all, the needs of energy for the port of Bilbao for the following years, for the year 2030, will be more or less seven times higher than what we've got at the moment because of the electrification.
If you want to provide ships or vessels with electricity, you need a lot of power.
So we are at the same time amplifying the power of the substation. We need substations. So the idea is to have now, now creation of energy, generation of energy about 25% of the overall by the year 2030 and going increasing that through, for example, one of the amplifications. The last amplification of the port of Bilbao, which is taking place now, will provide us with, as I say, another 300 some stadiums. Just to make you an idea, 300 more land stadiums. Land. And so the idea will be that all the roofs located there will have a solar panel. So that will be the main idea, so we can get even more sovereignty. And also the idea is to increase also, which is very important, the storage of energy.
[00:09:00] Speaker A: Absolutely. Now I want to circle a little bit back because I mentioned the word democracy and democratic in my introduction a couple of times.
So I'm wondering in what ways is the Port of Bilbao creating a democratic but also cost effective energy model? Because those two don't always go together.
[00:09:22] Speaker B: Yeah, well, the idea is that there are different models and at the end we want to decide which one will be the one that we are going to choose. But the idea, and this is fixed, I mean, we are going to create this is energy consumption community.
So here at least, and I think that in Europe is the same.
If you produce your own energy, there are some tariffs, some fees that you don't need to pay.
So mainly it gives you an advantage of about 40% of the price in the energy.
So the calculation is that, for example, for ships, if they need to refit and to adapt to this system, the currently vessels that in origin, they don't have this system, the return on investment for them is about five or four to five years.
Meaning that they need to change some things in the adapt the vessels. But as they are not going to pay for ets, while they are in the port and as they will get cheaper energy while they are in the port, the calculation is that the return on invest will be about four or five years. So it gives them a big advantage. Secondly, with the energy that because you've got sometimes vessels and sometimes you don't have them. So the rest of the energy, the idea is to create that for the different players of the equipo community. I mean, so container terminal, other terminals, okay. So the storage there is very, very important.
And also it's very important the agreement with the dgo, I mean, let's say the kings at the moment, you know, because of course you need their permission to amplifications. And so. And so at the moment we are amplificating our substation for 30 to 60 and this is. The words are now taking taking place and the idea will be again to multiply by seven and the capacity of the port, of course you need also a negotiation with the Spanish grid agency.
[00:11:34] Speaker A: Absolutely.
[00:11:35] Speaker B: And I think that more or less everything is agreed. So I think that we will be able to take interesting projects to the port. Not only projects that need a lot of energy, but also projects that can create energy in the port. So it's not easy, I mean, it's not easy to coordinate that. But at the end what you need to show is that this is an advantage for the different members of the community. They will get cheaper electricity, so their competitiveness will improve. And also for the ships, because everyone wants ships in the port. Just the business, I mean, it's not about to keep fill the port, but to attract a lot of vessels, as many as possible and as much cargo as possible. That's the business of the port. So we see that as an opportunity. If we do it in advance before the requirements of the European Union, we see that clearly we've got an opportunity and this will show our whole community that this is really an important bit and they should take advantage from that.
[00:12:42] Speaker A: And what's the role of the local dso? Because this is an important stakeholder, right?
[00:12:47] Speaker B: Yeah, yeah. At the moment again, we have negotiated with them the amplification of the substation.
And of course you need to reach an agreement with them, because sometimes, well, sometimes no, you will always need their support because we won't be able to create or to generate a whole the all energy that we need. Perhaps at night, that's okay. Then the storage or whatever. But I'd say if we create just 25% of the needs, I mean, you need their help, so you need to reach an Agreement and also sometimes probably we need to supply them with energy in some cases, I mean, that will be not the normal situation, of course, but it may happen according to the level of storage that we've got also. So no, we've got a very good relationship with our eso and that's very important and it is here very well known.
[00:13:48] Speaker A: You can't miss it here actually.
[00:13:51] Speaker B: And we have always had very good relations and I don't see any reason to change that.
[00:13:58] Speaker A: Excellent. Let's talk money now. A little bit now. 115 million euros.
Astronomical. How was the financing structure designed and how did the various entities like the climate bank transport process and the Basque Energy Agency contributed?
[00:14:18] Speaker B: Yeah, well, basically, basically when it comes to funds, we've got 30 million funds coming from Europe and then we've got 80 million green loan from the European Investment Bank. But the loan will be paid by our with our resources. So that's the autonomy of the ports. You generate money and you pay for that.
So basically the larger percentage of the funds will come from the port authority of bao. When it comes to the European funds, we've got different funds and the first one is the cef.
So it will help us for the part of the electrification, the ops and also for the solar panels and the amplification of the substation.
Secondly, we've got the.
This is a loan European Investment bank for the also one part of the electrification, also for the wind turbines and for the storage system.
Then we've got a pilot with our RORO terminal and this is found 100% by the Resilience funds of Europe. And this will be in fact the first ops working in the port next March.
And also we've got the BASC energy entity or agency that support us for the to put what is a solar panels on the top of the roofs of our concessioners in the port.
And we are aiming to ask for more European programs for the refitting of the currently wind turbines that we've got in the port.
[00:16:14] Speaker A: Okay, you're in the best place to.
To do that. I think back to the 80 million that was awarded. What does it cover and have you already started some works with that money?
[00:16:28] Speaker B: Yeah, well, I'd say the 80 millions basically are for the one part of the electrification. So we are already working on that. As said, the first ops will be ready by.
By 2027, sorry, next March. And the deployment of the rest of the grid, that I may say in the port, it's being already done. So we are using already done. Then the Second part will be. And that will be later on, but before 2030 with the wind turbines. So two wind turbines. So the idea is to generate 11 megabytes. We'll see if we can even get more.
That's. That's the idea. Okay. And.
And the third one is about some plant. No, sorry, this is the investment bank. Yes. So this is about electrification, wind turbines and storage. And storage. So this is the first step when it comes to storage. Of course, this is new for us as a port, but the idea is to improve the capacity with the years it goes with the wind turbines project because the storage will be located in the bottom part of the.
[00:17:51] Speaker A: What are the carbon reduction emissions avoidance benefits once the whole thing is fully operational?
[00:17:59] Speaker B: Yeah, if all the vessels that are able to connect to our terminals arrive, let's say. Yes. Maintaining the number of vessels that we've got at the moment, the reduction will be around 40% on emissions. Okay.
There is a concern for us at the moment.
If we talk, for example, and if we talk about cruise lines, the reduction will be between 85 and 95% because at the end you need energy for a hotel while they are in your duct.
And there is a very big concern for us, I mean at the moment, while for the cruise lines about 58% of them are already ready to be connected in the world. That's a good thing. For example, last year the port of Hamburg had 60% of the cruise arrive to the port of Hamburg were connected.
It comes aligned with that.
The question is that worldwide at the moment only 6% of the vessels are ready to be connected.
Okay, so then you've got many options. First of all, take into consideration that every year around 5,000, 6,000 new vessels are building, are built in the world by the year 2030, in theory, you will get another 35, 30, 35,000 vessels, which could represent about 30% of the vessels in the world.
That was news. Apart from that, we expect that also a lot of the current reversals will be refitted and they will be readapted to this. As I say, the return on investment is calculated around four to five years.
But it's true that it may happen. Yeah, that some of the vessels, a lot of the vessels are not ready. So as we are doing our homework, I think that very well and we are going to be ready by the deadline and even before.
One of our worries is what will happen if some of the ports are not ready and vessels are going to these ports instead or going to the port that had made the homework and I think that the European Commission has a very important role to play there. I think that these ports, the ports that are doing their homework should be rewarded by that.
And not only because the vessels that are ready to be connected should go to these ports, but also even those who are not ready should have an advantage going to this port. I mean, because otherwise if you give, I don't know, you don't take as a European Commission this role to control that through European portal, overall portal, you take the risk to give it to the states. And the states, they hold their own interest.
And for these ports that are doing the homework, perhaps could be a very dangerous situation. The investment, as you have mentioned at the beginning, has been huge and will be huge. And the ports, we want more and we want more and more. Exactly. As soon as, as I said at the beginning, the sustainability is economic, social and environmental. So we need the three parts of it.
[00:21:31] Speaker A: I can't help but notice a little bit of similarities, let's say, between EVs and the port and what is happening within infrastructure.
But would you say that this model can be replicated in other ports?
[00:21:45] Speaker B: Yes, of course. I mean, we've seen that the frontrunners at the moment in Europe, we can mention, for example, Port of Hamburg, we can mention also Rotterdam or we can mention Gothenburg. I mean, so there are some ports that doing very well, even if we are going to be the first one in the. Not only in the Spanish state, but also in the Atlantic Arch.
And. But yes, there are some. Barcelona is doing well also and some other ports. I mean, but again, this is about a lot of investment and sometimes there are ports that even if they are, they need to do it. I mean, because it's a compulsory.
The economical situation is not the best one again because the poles need to take the money from the arms for the investment. And this is a very tricky situation.
[00:22:36] Speaker A: Ivan, my last question to you, and it will be a little bit of futurology.
What does success look like in five years from now? And very briefly, a couple of milestones.
[00:22:49] Speaker B: Okay. For us, first of all, we see that, and this is not to see the ball, you know, but according to some studies, the opportunity to gain new lines in the port could be up to 25% of new lines coming to your port, because other ports have. Have no connection. So that will be very nice and I will to. To enjoy that situation and to celebrate that situation that well. And on the other hand, I will like, of course, and this is not related only with economy, but they will be aligned a reduction of the emissions in the port, because again, this is about also economic, but the relationship with the citizen will improve. Also at the end, most of the ports and our ports also have a relationship with the citizens, with different cities, towns. And I think that this is very important. The port is not. I'm not telling that there should be 100% green space, because that's almost impossible. Even if you are net zero, you are going to have some pollution. That's very clear because there are industrial activities. But we need to try to go with the citizens, with the overall environmental policy.
[00:24:07] Speaker A: Excellent, Ivan. Thank you very much. I really enjoyed our talk and thank you all for your attention.
[00:24:13] Speaker B: Thank you very much.
