October 26, 2014
‘Many South American terminals lack energy consumption policies’
Container trade in regional ports has grown from 10.4M TEUs in 1997 to 43M in 2012, with reefer cargo among fastest-growing sectors, ECLAC says
Latin American and Caribbean containerized trade has quadrupled over the last 15 years, sparking a sharp increase in port power demand, but many regional terminals still have only a limited knowledge of energy consumption, the United Nations warn.
Despite the trade increase — to a large extent due to an export boom with Asia — energy efficiency measures are barely present in the region’s ports and terminals, the Santiago-based UN Economic Commission for Latin America and the Caribbean (ECLAC) said.
ECLAC surveyed 13 ports from Argentina, Chile, Paraguay and Uruguay accounting for about 70 percent of containers throughout the Southern Cone, excluding Brazil.
An initial finding was that terminal operators had very little knowledge of the subject of energy consumption, or of records of historic energy consumption in their terminals.
In several cases, specific energy consumption source monitoring was not installed. This was particularly the case in smaller ports and terminals, which were not acquainted with energy consumption measurements.
While collecting the data, significant time had to be invested in explaining to the terminals the relevance of the topic and the way, said the report, the first worldwide publication on energy consumption patterns in South American container terminals.
International experts gathered late last month with port and energy industry officials in Santiago to discuss the challenges from reefer cargo (refrigerated perishable goods).
The seminar resulted in a highly professional exchange of needs and opportunities to increase energy efficiency of container terminals and it was agreed to further develop technical and operational solutions under the leadership of ECLAC, Svenja Töter, from Germany’s Fraunhofer Centre for Maritime Logistics and Services CML, and Jens Froese, of the Jacobs University, Bremen, told the Herald.
The ECLAC report proposes a six-point action plan: 1) Ports and terminals should install monitoring systems to assess energy consumption and its costs; 2) Identify energy consumption sources; 3) Formulate energy efficiency plans; 4) Coordinate measures especially focusing on processes with high energy reduction potential; 5) Obtain energy efficiency certificates; and 6) Formulate long-term strategies, especially if an expansion or electrification of the port or terminal is planned.
The report was produced by ECLAC’s Gordon Wilmsmeier and Ann-Kathrin Zotz; Green EFFORTS, a project co-funded by the European Commission, Andreas Meyer and Professor Froese.
ECLAC said that the views expressed in the research reflect the points of view of the authors and not necessarily the opinion of the international agency.
Container trade boom
Since the 1990s, Latin American and Caribbean countries have been experiencing a robust and sustained growth which has increased and altered the patterns of energy demand for freight logistics, both within the region and in its interaction with global markets.
More than 95 percent of South America’s exports is moved through ports.
Therefore, ports’ energy consumption is increasingly relevant for the competitiveness and sustainability of infrastructure services and the transport and logistics sector, the ECLAC said.
“Energy efficiency strategies are urgently needed to improve competitiveness.”
Energy consumption of Latin America’s transport sector surpassed two billion tons of oil equivalent, representing one-third of the regional energy matrix.
At the same time, the sector’s energy consumption rose to 35 percent in 2010 from 27 percent in 1990.
On average, 70 percent of the energy used in Latin American ports comes from fossil fuels and the balance from electricity. The current trend in the sector towards total electrification of operations must be planned together with the energy sector, the report said.
Container trade in the region’s ports grew from 10.4 million units (TEUs) in 1997 to 43 million in 2012. As a result, reefer trade puts extra pressure on energy consumption, in addition to the energy required for regular port operations.
The traffic of refrigerated containers with perishable goods in South American ports has grown considerably in recent years, especially as a result of increased South-South trade, putting energy security at risk.
Reefer cargo, one of the fastest-growing segments, requires constant refrigeration and consumes a significant amount of energy and, as a result, puts extra pressure on efficient energy consumption, in addition to the energy required for regular port activities and operations. However, only one port in the area, that of Arica, in Chile, has been certified with the ISO 50001 energy efficiency standard.
Increasing government awareness
Governments are increasingly focusing on and pressuring for more climate-friendly strategies. But these initiatives and policies usually focus on emissions as a symptom of industrial activity, rather than on the causes, of which energy consumption is one, the report said. It quoted María Belén Espiñeira, President of the Argentine chapter of the Women’s International Shipping and Trading Association (WISTA): “It is good to know that there is an increasing awareness among private companies, and that they are taking action... We hope that as from now, there is also action from the public sector to provide guidelines. The (Argentine) government seems to have started taking some action now.” (Herald, July 29, 2013).
Very strong interest was shown from terminal operators and stakeholders, who are becoming aware of the unused potential of measures for improvement. The main challenge is to identify energy sources and usage time.
However, programmes for comprehensively measuring energy efficiency and consumption by source are absent in the majority of ports and terminals, while the identification and implementation of strategic measurements for improving energy efficiency still do not include all process domains. Discussions with stakeholders in South America and in Europe, such as the European Union’s Green EFFORTS project, among others, have revealed the lack of a standardized method for measuring and allocating energy consumption and greenhouse gas (GHG) emissions, and of energy efficiency key performance indicators. As a result, the benchmarking and control of energy consumption and efficiency is not possible at present.
Ports and terminals should be accountable for the energy they use, the report says, adding that a set of measuring and reporting standards, each focusing on different aspects, is available: the Greenhouse Gas Protocol, adopted by ISO 14064-1, the CEN 16258, and ISO 50001. Areas for improvements are identified together with appropriate energy performance indicators and targets. These are then used to develop and implement an energy action plan.
For example, a European terminal handling 1.6 million TEUs was estimated to consume about 12 million kilowatt hours (kWh) of electricity and 3.1 million litres of diesel per year, it added, quoting Töter and Froese. The former is equivalent to the energy generated by two 1.5 MW wind turbines per year. To understand the sources of energy consumption, container port operations need to be split in process clusters. The authors differentiate between clusters: quay cranes, lighting, buildings, cooling (reefers), horizontal operations in container handling, and others. However, greater disaggregation is necessary in order to fulfill customer expectations regarding the calculation of a carbon footprint.
Looking beyond energy consumption
Comprehensive work related to environmental issues has been carried out on ballast water, waste, scrapping/recycling and emissions but the CO2 footprint is now pre-eminent on the regulatory and political agenda. However, port and terminal operators are still trying to understand the details and the patterns of energy consumption in their installations, the report said.
“Continually rising energy costs increasingly have come to the attention of terminal and port operators... This provides a good opportunity to raise awareness of energy consumption and to discuss possibilities for achieving lower carbon footprints and lower energy bills, while at the same time achieving greater competitiveness by becoming greener and more efficient.”
Benchmarking concepts for energy consumption does not mean just a simple comparison of terminals. Even if container logistics are comprehensively standardized on a global level, the operational conditions can differ widely.
Energy sources & consumption patterns
Reducing fossil energy consumption through improved efficiency and electrification in ports has been perceived as part of the solution for reducing dependence on fossil fuels, in the area and elsewhere. Most of the energy used in regional ports comes from fossil fuels. Less than 30 percent of the energy used in container terminals comes from electricity.
“These findings show a huge potential for switching from fossil fuels to electricity and thus reducing emissions. On the other hand, they present a significant challenge since such a conversion would have to be mitigated through investment in the energy grid and production, in order to accommodate the new demand and demand peaks in particular.”
The share of electricity is slowly increasing in most of the terminals under study. Additionally, the distribution of energy consumption clusters can vary considerably, mostly depending on the share of reefer trade, which during the fruit season can easily rise to up to 60 percent of the total electricity consumption of a terminal.
In a common terminal electricity consumption is distributed as follows: (a) reefer containers, i.e. refrigerated containers carrying deep-frozen or chilled cargo (40 percent), ship-to-shore cranes (40 percent), terminal lighting (12 percent), and administration buildings and workshops (8 percent). Fossil fuel consumption (diesel or gas) is distributed as follows: stacking operations (68 percent), horizontal transport of boxes, for example by tractor (30 percent), and other vehicle and equipment operations such as those using terminal cars and forklifts (2 percent).
Between 2010 and 2011 the East Coast of South America (ECSA) exported more than 700,000 TEUs of refrigerated containers, with Argentina accounting for 19 percent and Uruguay seven percent. During 2010-2011, 78 percent (more than 400,000 TEUs) of the reefer exports were meat products, with chicken accounting for 73 percent, beef 14 percent and pork five percent. Fresh fruit made up 10 percent of the reefer exports (53,000 TEUs) although some estimate fresh fruit exports at 20 percent of total reefer shipments in 2010.
One of the challenges of reefer cargo is its seasonality, which causes significant variations in energy consumption, with the peaks determining the number of reefer plugs required for an efficient operation at the terminal. The peak fruit season lasts only three months and thus creates an oversupply of reefer infrastructure during the rest of the year. Additionally, reefer cargo requires differentiation between frozen, chilled and controlled-atmosphere cargo, with energy consumption patterns that vary considerably.
Contrary to the general belief that frozen cargo consumes less energy than chilled and controlled-atmosphere cargoes, that the latter two categories require a constant energy supply because even the slightest temperature variations can impact negatively on cargo quality, the report said. Also, there are immense differences in the energy consumed when comparing dry and reefer cargo handling in all the ports and terminals surveyed. The differences resulted from the energy consumed in cooling, as opposed to not cooling the respective cargo. There were significant variations between the terminals.
Reefer cargo is often packed and delivered to terminals in containers which are not pre-cooled. A significant amount of energy is therefore required to first cool down the units to the specified temperature. This potentially jeopardizes the quality of the products, creating extra logistical costs at a later stage of the cold chain. Energy consumption per hour can exceed a tenfold variation between the best and the worst terminals.
Finally, it is generally perceived that the electrical operation of cranes is more environmentally friendly than fossil fuels, and many terminals are working to electrify their operations. While electrification poses no challenge in terms of the technical and operational aspects, full electrification can have significant impacts on grids.