CONTAINER PORT: The increasing traffic chaos on northern Europe’s motorways and the bottlenecks around Hamburg, Bremerhaven and Rotterdam can be relieved by using the large container ports at the entry to the Baltic Sea. To further improve its services, the Port of Aarhus has invested in major expansion and a new infrastructure.
These days billions are being invested to beat the traffic chaos developing around the main western European Atlantic sea ports in Rotterdam, Bremerhaven and Hamburg. Meanwhile, with four new Baltic Sea states as EU members and a large Russian market with St. Petersburg as a port of transit, Baltic traffic is expected to expand at a rapid rate in the coming years.
Denmark’s largest container port in Aarhus has long seen the writing on the wall. It is focusing on becoming the transit port that will relieve the increasing chaos on the motorways through Poland and Germany as well as the shipping traffic on the Kiel canal. At Aarhus, new quays have been built, with new container terminals and an expansion of the port’s facilities including cranes, access roads and storage yards. These initiatives are aimed at consolidating the port’s leading position as one of Europe’s most efficient and productive in terms of cargo volume handled.
Each year, approx. 8,000 ships dock at the Port of Aarhus carrying more than 11.3 million tons of cargo. About half of the total is handled via containers and the ferry routes of the port. About 2.1 million tons are oil products, and the rest is bulk cargo. The port’s largest customer is Maersk-Sealand, which operates its own container terminal. The shipping company A.P.Moller-Maersk calls at the port once a week with an ocean-going line to the Far East. The port has its own terminals for every purpose: Two container terminals, multi-terminal, bulk terminal, oil port, wood terminal and ferry terminal. In addition there is repair yard, fishing harbour, marina and wooden ship harbour. The port has 3 Post-Panamax container cranes, 5 Panamax container cranes, 2 bulk cranes, 9 quay cranes, 1 heavy-lift crane and 1 mobile crane. About 150 private sector companies, employing several thousand people, are located in the port including ship brokers, stevedore and warehouse businesses, control companies, container repair operatives as well as road transport operators and railway companies. The port covers a land area of 227 ha and a water area of 293 ha. The total quay length is 13.5 km. and the deepest water is 14 meters.
From road to ship
“To avoid complete chaos on Europe’s motorways, it is an absolute necessity to shift a lot more transport off the roads and onto ships,” says port director Bjarne Mathiesen of the Port of Aarhus. “That is not just my opinion. That is an EU objective and all traffic research points to the same conclusion. It naturally requires an infrastructure that works, and that is what the Port of Aarhus is busy developing – efficient access roads with a motorway directly to the port, new cranes which can handle the biggest container ships, lots of storage space and non-bureaucratic and flexible conditions for customers.”
Port director Bjarne Mathiesen
More ocean-going shipping lines
There are currently more than 5 million containers in circulation in the entire Baltic area, and the number is increasing rapidly. In the last year, the Port of Aarhus has increased its share by around 15%, with TEU’s accounting for almost half the increase. This has meant that for the first time in its history, the port has generated a turnover of more than 11 million tons of cargo.
“To be able to participate in relieving the northern European goods transport situation which is currently threatening to descend into total chaos, we need to attract more ocean-going shipping lines,” says Mathiesen. “That means more regular calls which will encourage a shift of the routes from the Baltic away from the roads and the bottlenecks in northern Germany. With the expansions and investments we are currently implementing, we are playing our part in creating the conditions for such a change in the transport pattern.”
TRANSPORT: “Efficient transportation is about driving the fewest possible kilometres per kilo of goods. The goods must also reach the right recipient at the right time, in the right condition, and at a competitive price.”
Northern Europe’s largest and most efficient transport organisation. That is how Danske Fragtmænd refers to its own organisation. It covers the world’s most finely meshed national transport network with 2,400 trucks, 3,000 staff and some 30 distribution terminals across Denmark, from where practically all goods reach their destination within 24 hours.
Track-and-trace
“We are not only the largest, but also the most flexible and modern transport organisation in Denmark,” says sales director Peter Jepsen of Danske Fragtmænd. “We were the first in Denmark to introduce an internet based ’track-and-trace’ service, which enables our customers continuously to track their goods from door to door via the net. We were also the first to develop a whole service package to handle all the administrative work regarding our customers’ logistics. Goods are transported directly from the production location to our distribution terminals, where the goods are reloaded for all recipients, and all the transportation is immediately invoiced. No one else in Denmark can offer that.” Danske Fragtmænd is based on a co-operative concept where independent truck operators own the company and carry out shared tasks in collaboration. In the old days almost every small town had its own truck operator, and the slightly bigger towns each their cargo terminal where goods were exchanged. In the last 10 years, the number of independent truck operators in Danske Fragtmænd has decreased from around 300 to 140. In the same period, the number of trucks has increased from about 1,800 to 2,400.
Lars S. Larsen, left, and director Peter Jepsen of Danske Fragtmænd
The harder the better
“At the same time, the efficiency and service we offer to our customers have increased and become more sophisticated by means of information technology. The more complex a logistics task is, the more able Danske
Fragtmænd is to handle it,” says Lars S. Larsen, managing director of Danske Fragtmænd’s largest distribution terminal in Taulov near Fredericia. “We are happy to handle large amounts of the same goods which need to be transported from A to B every day, but that is not where one makes most use of our competence. Because our competence lies in what is complex i.e. several pick-up locations, multiple recipients and varying amounts of goods.”
For several companies, Danske Fragtmænd handles their entire transportation needs. It has meant giving up the entire fleet of vehicles and enormous savings on company distribution costs.
“It has produced substantial savings, as well as much better customer service and more efficient distribution,” says Peter Jepsen. “Instead of just being a cost, and a source of irritation when something goes wrong, distribution has become an added value to the company. That is what it is all about, after all.”
Quality transport
A distinctive feature of Danske Fragtmænd is the dense national coverage. The carriers reach every corner of Denmark. It also stops there, because they don’t operate abroad.
Danske Fragtmænd is on the other hand increasingly being used by foreign companies for distribution in Denmark.
“Currently about 20% of our annual revenues of just over EUR 270 million come
from foreign customers,” says Peter Jepsen. “That figure is strongly increasing. Foreign companies have become aware of the opportunities we can offer: Day-to-day delivery, lots of opportunities for exploiting storage
hotels in several places in Denmark, and last but not least, reliable quality transport.”
AIRLINES: Jørgen Lindegaard, a Dane and also chief executive of the SAS Group, the Scandinavian airline, has good reason to be satisfied. Despite the global crisis in aviation, SAS Group has come out with a positive result for the first time in his five-year period as head of the group.
“For a long time up to 2000, SAS had monopoly-like status on many markets”, says Jørgen Lindegaard as he explains why losses have now turned into profits. “SAS could maintain high ticket prices, and it was still sought-after to fly business class. When aviation was liberalised in the 1990s, SAS failed to see the danger and failed to act. Then a lot of things happened. It started in 2000, when the IT balloon burst. Earnings from our regular customers started dropping, and then came 11 September 2001, which strongly affected air traffic.
The budget airlines started growing during the same period. They could see that the old airlines were shaken, and they managed to take up the battle. They took over many routes in Europe, and many of the old companies had to close. On the domestic front, we also faced strong competition from Mærsk Air, which started a budget airline operating out of Copenhagen.”
Change of mindset
“All these things made it difficult for SAS to bounce back”, continues Jørgen Lindegaard. “And at the same time a change of mindset occurred. Major companies had previously never thought it necessary to economise on travel budgets. They just travelled, and expenses were expenses. But suddenly it was fashionable to travel cheap. The focus was on airline travel costs because people suddenly felt that they had been exploited previously, and we had to negotiate with the majority of our major customers, who all aimed for appreciable discounts. Fortunately it has also changed again, and today you can almost talk about a normalisation of the relationship between our costs and ticket prices.”
Major changes
It is not the first time SAS has been in a crisis. The difference between then and now was that considerable amounts of money had to be saved to get the business to hang together again. The organisation has been changed towards a simpler, national division, companies have been sold off, there have been job cuts, and acquisitions have been carried out in Scandinavia, Spain, Estonia, Latvia and Lithuania. “In many ways we have actually used the policy of budget airlines to win back the market”, explains Jørgen Lindegaard. “We use and get ideas from them, in the sense that we have introduced a differentiated price policy, we have made sure that customers can now buy one way tickets from SAS, and individual seating has been introduced. In addition we offer discounts when tickets are purchased directly via our website, and we put great efforts into making this platform as simple and userfriendly as possible.
These changes have not happened without some clashes with the staff. Strikes have been held, and as recently as January this year, the Danish pilots went on 24-hour strike in protest against a plan to transfer them to the national SAS company. “Naturally there is a danger that we have tested the tolerance of the organisation because of the many changes”, says Jørgen Lindegaard. “I can live with the fact that in certain cases a bit of job satisfaction is missing behind the professional mask, but rather that than a fired staff member. I believe that SAS has a strong future role to play in the aviation industry, and I also think that the pride and satisfaction of being a part of SAS will increase as we generate profits and gain a stronger competitive position.”
Scandinavian design
SAS is often associated with Scandinavian design, with pure lines and superior colour composition. The question is whether the former high quality level in this area can be maintained in times of financial constraint. Jørgen Lindegaard is in no doubt: “In my opinion the design aspects, and here I am especially thinking of designer cutlery, glass and porcelain, have had something superficial about them. There has not been enough realism to acknowledge that it never can or will be the world’s best culinary experience to eat in an aircraft! On the other hand, we do not compromise on quality regarding use of colours and the layout of our cabins and lounges. Here we continue with the pure Nordic lines and the form of design, that Scandinavia is known for around the world.”
Despite the positive result, the group cannot expect that changes have come to an end. Savings and consolidation are still required so that SAS can maintain its competitiveness in the long term. In 2006 and 2007, a total of DKK 1.6 bn must be saved across the entire group, and Jørgen Lindegaard expects to get the three Nordic companies in particular generating a profit. The SAS Group consists of nine airlines and according to Jørgen Lindegaard, there are no plans for further initiatives in that area. “Our primary objective is consolidation and profit”, he says. “SAS is a member of Star Alliance, and there are no plans for actual mergers or acquisitions either from our side or from our partners.”
SPECIAL SHIPPING: Although Copenhagen has become one of international shipping’s focal points, there is an extensive spread of shipping companies outside Copenhagen. In the shipping town of Svendborg alone, 13 new ships have been ordered.
Ship owner Lars Hjorth Simonsen
“Niche sailing or specialised shipping – it is about being best at what you are engaged in,” says ship owner Lars Hjorth Simonsen, who represents the fourth generation of the small shipping company M.H.Simonsen in Svendborg. Since 1961, the shipping company has specialised in tanker shipping with liquid edible products such as molasses or oils for the food and feedstuffs industry.
“There are very strict requirements on the transport of food, so it is necessary to have special knowledge. In return, you get very loyal customers who feel confident about the quality we can offer,” says Lars Hjorth Simonsen. “Most of our customers have stayed with us since the start.” Together with a few other shipping companies, including Danish companies, M.H.Simonsen has a sizeable chunk of
the tanker market for edible products in northern Europe. The shipping company operates 16 tankers of 1,700 – 4,500 dw, of which the company owns seven. The shipping company’s own ships all have the capability of warming the tanks to keep the cargo liquid.
While the market for small tankers for edible products is relatively static, it is growing in a number of other areas such as bio-products.
“In order to keep our leading position, we must constantly grow,” says Lars Hjorth Simonsen. “We have four new product tankers on order at a shipyard in Turkey for delivery this year. Two of the ships are specially equipped for sailing in icy waters since we are supplying oil and petrol to a number of towns and settlements in Greenland.”
SHIPPING: Danish shipping is doing a good job these days in every department –financial revenues, foreign exchange earnings, operational tonnage, new vessels built and other aspects especially where container operations form a major part.
In 2005, Danish shipping companies generated revenues of approx. USD 23 bn, a 20% increase on 2004. The Danish Shipowners’ Association forecasts continued growth in 2006, despite an anticipated small drop in cargo rates, which achieved record heights in 2005.
Danish shipping companies operate around 50 million tons dead weight internationally. Of the 50 million tons, about 30% is directly owned by around 100 Danish shipping companies ranging from the small to the very large. The rest are ships which are chartered or pooled from Danish shipping companies and cargo carriers.
By the end of 2005, Danish shipping companies had a new vessel construction programme valued at approx. USD 12 bn. The
existing Danish fleet is already the world’s youngest with an average age of just under seven years. The ongoing new-build programme will reduce the average age to 6.2 years, compared with the world average of 12 years. The new-build programme might be significantly larger according to the Danish Shipowners’ Association, since the USD-12 bn figure only includes contracts which have been confirmed by both shipping company and shipyard.
The foregoing figures speak for themselves, but they also say something about the cause and effect that the concept of ’quality shipping’ has achieved for Denmark. Quality shipping means safety, reliability, trustworthiness and competitiveness. Denmark’s golden reputation is built on an exception-
ally high educational level for both the crew at sea and the growing numbers of skilled shipping people on land. The Danish corporate sector uses the ’Blue Denmark’ concept, which means shipping and associated/derived businesses. It covers operation of harbours, shipyards, hardware and software sub-suppliers for shipping, equipment and service deliveries as well as offshore activities in oil and gas. ’Blue Denmark’ involves 120,000 people who help ensure and maintain the Danish quality level.
CRUISES: In the old days, a passenger ship simply transported people from A to B. Today passenger ships can only survive if they have something more to offer.
DFDS Seaways, the passenger division of Danish shipping company DFDS, launched a new strategy in 2005 to upgrade its public profile and improve its offer to customers.
“Unsurprisingly perhaps, this attitude shift took place following the appointment of the new group chief executive, Søren Jespersen”, says Jes Mikkel Svare, director at DFDS with responsibility for Denmark and Sweden. “It was the new chief executive’s view that the shipping company’s image was rather dusty, and together with a marketing agency, we developed a number of new initiatives called “Next generation”.
Mini cruises
Customer needs became the basis of our entire business, and that meant having good customer knowledge and adjustment of the ship according to their wishes.”
Before DFDS Seaways reached this insight, various positive and negative experiences had been gained over previous years. In the early 1980s, the shipping company had already recognised the need to focus more efforts on the “experience” industry and the cruise market. They made attempts in Miami, Florida, but the strategy didn’t work and DFDS Seaways quickly withdrew. It meant however that the company possessed a very large passenger ship, which then was put into use on the route between Copenhagen and Oslo.
The company soon realised that there was great demand for mini-cruises, and that many passengers would like a lot more than just being transported from one port to another.
“These experiences naturally formed part of our concept work”, says Jes Mikkel Svare. “We are competing with a number of transport forms such as aircraft, trains and buses, so to us it is about retaining passengers with a maritime experience of high quality.”
Not a cafeteria
“Our ships are floating first class hotels, and in our restaurants we have removed everything which resembles a cafeteria. Quality is high on many different levels, and everybody is served at the table. We have made sure that the maritime feel is expanded, so that no one fails to notice that they are on board a ship. We have also discovered that customers change segments. They may be having a private party on one trip, and a family outing on the next. So the ship must offer facilities for many age groups and many interests. The ship’s conference offer is a very special and very sought-after service on the Co-penhagen-Oslo route, where people can be working as well as taking advantage of the ship’s many offers. A new creation for this customer segment is the establishment of a wine bar, where passengers can enjoy quality and cult wines by the glass. The many young passengers have also been provided for. The choice of activities is adjusted to various age groups, and in addition there is a ’Youth@Club’, an internet café which is targeted at 8-15 year olds. “We have discovered however”, reveals Mikkel Svare, “that this facility is popular with a number of passengers who are well over 15 years!”
“We feel well prepared for the future, and we are sure that we can compete in the experience market”, says Jes Mikkel Svare. “Our new concept is only just over one year old, but we know already that we can earn money, and that we have a growth strategy which works.”
Wine tasting – part of the experience on DFDS cruise liners
Future ready
DFDS Seaways operates four routes: Copenhagen-Helsing-borg-Oslo, Gothenburg-Kristiansand-Newcastle, Esbjerg-Harwich and Amsterdam-New-castle. The focus is on the ’major city to major city’ concept, as well as the ro-pax concept, where container cargo is combined with passenger transport. The Copen-hagen-Oslo route, which operates every day all year round, must have 1,100 passengers on average and in the peak season 1,800. Jes Mikkel Svare also reveals that DFDS Seaways will launch a new passenger ship “King of Scandinavia” on 10 March this year, to operate the route between Amsterdam and Newcastle, so that the shipping company will have two ’major city to major city’ thoroughbred liners at its disposal.
| In 1866 Carl Frederik Tiet-gen, one of the leading financiers and industry magnates of his time, founded The United Steamship Company. DFDS consolidated itself as a result of increasing Danish exports of agricultural products to the UK, which gained pace in 1875. Via acquisitions, DFDS has developed into one of the largest players in the ship transport sector in Europe. In Decem-ber this year, DFDS celebrates its 140th anniversary. |
BARGE TRANSPORTATION: A Danish towage company which specialises in barge transportation has broken with the former secrecy over the positions of towing boats. The new style helps ensure customers lower prices and greater efficiency
While the tug and towing boat sector have previously held their cards close to their chests regarding each company’s activities, the Danish towing company Svendborg Bugser was the first firm to start sending out position lists to its large customer base some time ago. That caused more and more shipping companies in the sector to follow suit. To Svendborg Bugser A/S, it has meant strong growth in activities, which in recent years have been extended from the natural geographical area around the Baltic Sea and the North Atlantic, to now include the Mediterranean, the Caribbean and Africa.
“The tug and towing boat sector has been a relatively closed world, where secrecy has helped to keep prices up,” says Niels Henriksen, managing director of Svendborg Bugser. “Especially in northern Europe which is lagging behind the rest of the world regarding barges. We help to promote this highly flexible form of transportation for example by sending out position lists which give a far better level of utilisation of the shipping company’s ships and material.”
Svendborg Bugser A/S is owned by the Henriksen family. The current fleet comprises 8 ships with pulling power ranging from 11 – 55 M/Tons, a multipurpose vessel and 3 barges. The company was established in 1977. It handles a wide variety of tasks including barge transportation in Russia, rescue operations, cable laying, transportation of large, unmanageable objects throughout most of Europe, and transportation of large steel or concrete constructions for the shipyard and bridge building industry.
“I am convinced that we will see strong growth in northern Europe in our sector,” says Niels Henriksen. “Barge transportation is far more flexible and more economical than ordinary ship transportation, and since the trend is already going in the direction of larger and larger ships and barges, an increasing proportion of traditional ship cargo will also be moved to the towage industry.”
WEATHER ROUTING: In recent years, DMI – Maritime Service has grown into Europe’s largest and the world’s most reliable provider of meteorological weather routings and performance analyses for international shipping. There is a lot of money to save.
With costs of between USD 25,000 and 50,000 every day to keep a ship sailing, it is essential for the shipping company and the carrier not only to get the cargo safely to its destination, but also to do it as quickly as possible.
“These requirements – safety and speed – do not always go hand in hand,” says Carsten Schrøter, who heads DMI – Maritime Service, which in recent years has grown into Europe’s largest and the world’s most reliable provider of meteorological weather routings and performance analyses for shipping. DMI – Maritime Service is a commercial wing of the Danish Meteorological Institute.
Carsten Schrøter, head of The Maritime Service
Dangerous waves
“A look at a globe shows you the shortest route between two ports. But the shortest route is not always the quickest, nor the safest. If the shortest route leads the ship directly into an area with a high swell, it affects the speed, and can also damage the ship and cargo. Our service is to plan the routes of the ships which take them around the worst dangers, while also making the route the most cost-efficient.” The routes which are chosen and presented to the ship’s captain after they have been ordered, not later than six hours before departure, are based on comprehensive analyses of all available meteorological data, as well as data regarding ocean currents, occurrence of ice and DMI’s own forecasting models for the height of the swell.
“Ships won’t be damaged by sailing into an isobar,” says Schrøter. “They are built for that. It is the swell and especially the large ’freak waves’ which can suddenly more than double in size, that can be dangerous. In this field, we are using probably the world’s best analytical models which can forecast areas with a high swell and thus freak waves.”
Reliable data
DMI – Maritime Service is a rapidly growing weather routing organisation. This is because the organisation’s risk assessments, which form the basis of route planning, are consistently the best on the market. Another key reason is DMI – Maritime Service’s general service level, with its rapid and reliable supply of data.
“The shipping industry’s interest in both professional weather routing and more financially based performance analysis is increasing sharply,” says Carsten Schrøter. “Last year we prepared about 4,000 ’journeys’, which is a significant rise in comparison to the year before. We service about 300 ships around the globe every day, especially in the North Atlantic, the Pacific, around south east Asia and the Indian Ocean.”
International
Another reason why such a relatively small country as Denmark has such a big and recognised weather service is because of the “local” working area of the organisation.
“It stretches all the way from Canada to the Middle East. We have responsibility for the weather service and particularly the ice situation around Greenland. In addition we monitor the Atlantic around the Faeroe Islands and provide Danish forces in the UN and NATO with weather forecasts. In reality, it means that we work more internationally than locally. One proof of this is that we have just won a contract with a new customer to provide ice warnings in the northern Caspian Sea.”
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Documenting claims The shipping industry’s use of DMIMaritime Service’s performance analyses, which are increasingly used for documentation in arbitration cases when claims occur in connection with cargo contracts, has expanded at a rapid rate. “These days cargo rates are so high that even delays of 4-6 hours provide grounds for claims,” says Carsten Schrøter. “For that reason it is becoming increasingly common to simply make it part of the contract for the chartered party to take our performance analysis into account in the final calculation.” “Previously it was all too easy for the captain, when a ship arrived later than expected, to claim that the ship had sailed into rough weather or had to change course to avoid a hurricane. By being subject to a performance analysis, we document minute by minute and hour by hour how the weather actually behaved during the ship’s voyage. So we can see whether the ship fulfilled the performance that was promised when the contract was entered.” |
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Facts about DMI – Maritime Service DMI – Maritime Service employs 30 people. The majority are meteorologists, but there are also several navigators and naval architects. The staff are often stationed on offshore installations or on ships. The service collaborates with the World Meteorological Organization (WMO) under the UN, the European Centre for Medium- Range Weather Forecasts (ECMWF) in Reading, UK as well as EUMETSAT. The clients of DMI – Maritime Service include major maritime companies from all over the world. In addition to weather routing and preparation of performance analyses, the service offers offshore forecasts, daily internet-based weather forecasts and customized solutions. A new system, Seaplanner, which will enable ships to prepare their own routing on-line, is a full prototype and currently being tested at sea. It is a modern and efficient supplement to the traditional service, and is expected to be offered during summer 2006. |
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When the weather kills Weather routing came into the media spotlight along with the category 5 Hurricane Katrina, which devastated New Orleans six months ago. DMI – Maritime Service had many ships in the area which received advice. The ships were given routes which took them around the hurricane itself. “Because of the destruction Katrina caused on land, the hurricane got a lot of media coverage, and rightly so. But the hurricane was only one of many. The vast majority of them rampage across the oceans and are never mentioned, but are just as great a danger to shipping. In 1997-2001 alone, almost 400 merchant ships sank on the great oceans, and subsequent weather analyses show that around 37% of all sinkings are probably related to bad weather.” “But it is not our task at any time to plan fair weather for the ships – if it is not necessary. There are often financial benefits in setting routes close to low pressure areas to exploit a shorter distance. But these routes are also more risky which necessitate advice and monitoring from our weather routing. We also seek to exploit prevailing sea currents, and regarding tankers which use a lot of energy for cooling gas, we try to set their route through cold sea currents so they save energy. It is all about safety and economy.” |
OIL POLLUTION: The drama of the oil tanker ’Prestige’ which broke in two and sank off the north Spanish coast, could have had much more serious consequences, had not a Danish company contributed to a very inventive clean-up method at a depth of 3000 metres
Ro-Clean Desmi’s Dop 250 special pump, constructed for pumping highly viscous oil
On 12 November 2002, the 25 year old tanker ’Prestige’ sailed out of the English channel and into the Bay of Biscay. Its cargo consisted of 70,000 tons of heavy fuel oil. The ship came from Ventspils in Latvia, and was en route to Singapore.
The ship never got that far. A typical winter storm in the Bay of Biscay damaged the single hulled ship and the oil started leaking. The captain requested permission to sail to a French or Spanish port. Both countries refused, and instead several tugs were sent to tow the ship further out into the Atlantic Sea in an attempt to prevent a potential oil catastrophe on shore.
Catastrophe
But all was in vain. While most of the crew were rescued by helicopter, the ship broke in two the next day, and sank to a depth of more than three kilometres, 130 nautical miles west of the Spanish coast. Before sinking, the ’Prestige’ had already produced a five kilometre long oil slick. The sinking itself caused an oil pollution catastrophe exceeded only by the ’Exxon Valdez’ catastrophe in Alaska 14 years earlier.
The oil pollution didn’t stop after the Prestige sank. In one half of the sunken wreck, there were still large amounts of oil in the tanks, which constantly leaked from numerous cracks and caused pollution along the coasts of Portugal, Spain and France.
Creative solution
The large quantity of oil in the tanks of the wreck and the considerable leakage from it threatened a catastrophe to which the authorities had to respond. The Italian company Sonsub, a subsidiary of the oil giant ENI, was commissioned to recover the oil from the wreck. It was a highly complex task
because of the sea depth and the properties of the oil, one of the heaviest grades on the market. But it initiated creative thinking in a number of companies worldwide which do clean-up operations after oil pollution, especially in the Danish company Ro-Clean Desmi, which supplies oil clearing equipment packages worldwide.
Sonsub immediately carried out pump tests of several potential pumps in Spain to select the most suitable pump for the purpose. Desmi’s Dop 250 screw pump was chosen after highly successful pump tests. In the meantime, all the holes in the wreck were sealed using Sonsub’s remote controlled submarines. From the outset, Ro-Clean Desmi was also involved in optimisation of the pump solution, which had never been tried before under similar conditions.
Catastrophe avoided
A special submersible tank which could contain 350 m3 oil was constructed and lowered down to the wreck. Holes were drilled in the hull, over which the tank was kept in place. The difference between the density of the water and the oil caused the oil to float up into the specially designed tank. When the tank was full, the hole in the wreck was closed with a valve, and the tank raised to 60 metres below the surface of the sea, where Ro-Clean Desmi’s Dop 250 special pump, constructed for pumping highly viscous oil, was connected to the tank. Water was pumped into the tank and the oil was recovered onto a waiting tanker and taken for destruction.
In a few months the wreck’s oil tanks were successfully and very professionally emptied of almost 14,000 tons heavy fuel oil, and the threat of further pollution on top of the catastrophe caused by the sinking of ’Prestige’, was avoided.
They are involved when the environment needs protection When large oil spills threaten to cause pollution catastrophes anywhere in the world, you can be sure that specialist equipment from Ro-Clean Desmi is in place for the containment and clean-up of oil. Since the 1980s, the Danish company has been among the key players in this niche area, where major environmental catastrophes and enormous sums are at stake for cleaning up the environment and for compensation. “We don’t do the cleaning up ourselves, but we supply the necessary equipment for the task,” says director Dennis W. Larsen of Ro-Clean Desmi. “Our three core products are oil containment booms, skimmer types which remove oil spillages from water surfaces or on land, and a number of special Desmi pumps which can handle all forms of oil or sludge regardless of the viscosity. We also develop a number of special products which may be necessary, depending on the character of the task.” Fortunes at stake area since the 1970s. In 1996, the joint venture was established, enabling Ro-Clean Desmi to supply specialist equipment for any clean-up task following oil pollution. In 2005, Desmi took over 100% ownership of Ro-Clean Desmi A/S. “There is often an environmental disaster and financial costs running into millions at stake when a catastrophe occurs, so the time factor is very important” says vice president Frands Pilegaard Jensen, who has been with the Desmi Group for 15 years and has actively participated in a number of clean-up operations following oil spillages. The faster the oil leak is contained and removed before it gets close to coastal or sensitive areas, the less damage the oil causes to the environment, and the clean-up and subsequent compensation are minimized. The catastrophe following the sinking of ’Prestige’ had serious consequences because political wrangling caused the ’Prestige spill’ to drag on. Today attitudes have fortunately changed, and many countries are realising the necessity of having an optimised and efficient readiness in case a catastrophe occurs. Ro-Clean Desmi has just entered two large equipment contracts in France and Malta in connection with the EU’s recent 2006 EMSA projects. Frands Pilegaard Jensen is very satisfied that Ro-Clean Desmi’s proven equipment was chosen, and underlines that it is important that oil clearing equipment is fully tested and works every time.
The company was originally a joint venture between two firms which each provided know-how in the area. A/S Roulunds Fabrikker had technological competence in rubber production used for development of reliable and durable oil containment booms, which today are marketed under the name Ro-Boom. The other company, Desmi A/S had a core competence in pumps and skimmers, which are marketed under the name Desmi. Both companies have been active in the clean-up
EDUCATION: The quality of shipping is one of the main reasons why Denmark today is Europe’s leading shipping nation and has the highest growth worldwide. And quality builds on people. A significant part of the complex processes of shipping is played by a well-trained and competent crew.
Svendborg International Maritime Academy has the latest equipment including several simulators which can simulate many ports worldwide. Here the students can learn how to bring a 300,000 tonne tanker out of a crisis situation caused for example by engine failure in the Singapore Strait.
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Senior executives The Danish training programme for ship’s officers in the merchant fleet is an international management programme which consists of two parts. The first is for junior officer where the training takes 4 1/2 years, and the second is additional training to senior officer which takes 1 1/2 years. The junior programme is dual training which enables the officer to work on the bridge, on the deck and in the machine room. On the senior programme, the officer can choose the machine room, navigation or a combination of the two. Both training courses comprise a large number of subjects including meteorology, communication, practical seamanship, navigation and machine technology. The senior part also comprises management development, shipping and operational management, ship operations and administration, ship management and technology. |
Ship’s officers in the Danish merchant fleet have the most modern and most comprehensive training in the world. In 1997, the shipping industry and the authorities merged the two ’old’ training programmes of officer and marine engineer respectively into one training programme, ship’s officer. And in December 2005, the first group of dual-trained ship’s officers were assigned to the Danish merchant fleet.
The first group of junior officers who started training back in 1997 has now been at sea since 2001, and the response to the quality of the officers is largely positive.
Polytechnicians
“The new dual training programme has produced some of the world’s best-trained polytechnicians, not only regarding shipping, but also for jobs on land and in the offshore industry,” says director Per Michael Johansen, head of Svendborg International Maritime Academy - SIMAC –which is based in the south Funen shipping town of Svendborg. The entire theoretical training required to become a ship’s officer in Denmark is conducted at SIMAC.
The training for junior officers takes 4 1/2 years, including both theoretical training in Svendborg and practical training on one of the Danish merchant fleet’s ships. The junior officer can then join the crew of a merchant ship – on the bridge, on the deck or in the machine room.
Responsibility for millions of dollars
“The new additional training programme, of which we have great expectations, will complete training of senior ship’s officers who will be among the best in the world, and who are able to take on all management tasks on all kinds of ships, large as well as small. One can choose between marine engineer, navigator or dual officer. This is management training which ranks among the best in the world.” Commanding a ship today is synonymous with taking responsibility for millions of dollars worth of ship and cargo. So the Danish training for ship’s officers is based on management and handling of crisis situations just as much as the old, more traditional skills.
“A modern ship is like a floating town with all its technical installations, infrastructure, communication equipment etc.,” says Per Michael Johansen. “The Danish mentality and the general gearing of Danish education to focus on problem solving and independence, are ideal for developing outstanding ship’s officers. That is probably the main reason why Danish shipping today is regarded as quality shipping and has such success. A ship can only sail as well as the whole crew can make it sail.”
LUXURY YACHTS: You have to be worth millions to afford a luxury yacht from Royal Denship. But in return you get the best of the absolute best. Care is lavished on everything, down to the tiniest detail
Ever since the Vikings ruled the waves in their longships a 1,000 years ago, craftsman-ship and quality have characterised Danish ship building. Danish designed and Danish built yachts are acknowledged all over the globe as state-of-the-art.
“Most yacht builders can pour luxury into the hulls, but there are few who can supply both customized luxury and quality yachts, where construction and technology go hand in hand with finish and luxurious accommodation,” says Hans Schneider, director of Royal Denship, which is headquartered in Århus. In the space of just a few years, Royal Denship has become a leading supplier of specially designed and customized luxury yachts for the super wealthy.
The combination of outstanding design, quality craftsmanship and customized luxury, where only the best is good enough, while carefully meeting the owner’s requirements for layout and equipment, has made Royal Denship into a significant player in this very special market.
Citizens of the world
“It is naturally a market which reflects a strong increase in the number of very wealthy people all over the world,” says Hans Schneider. “Our customers are citizens of the world, who have a nationality, but feel at home everywhere. In many cases by virtue of their yacht which is equipped with everything that makes it possible to live 100% on board. They are people to whom luxury is not necessarily an external thing, like creating an impression in fashionable marinas. Instead, the yacht caters for these people’s needs for privacy in a quiet bay in Mexico, or serves as a floating headquarters in the part of the world in which they have a periodic interest.”
Royal Denship’s director Hans Schneider on board a 137 foot luxury yacht which is being completed at Århus Shipyard. For filling and finish alone, before the ship gets 11 coats of paint, more than 5 tons of two-component filler is being used. Then the ship is perfect.
Expedition Yacht
Royal Denship’s entry into the market is due to owner Peter Johansen’s absorbing interest in yachts and his ability to create the right network necessary for the result to become a personalised yacht throughout. “Peter Johansen put his entire personal prestige into his first yacht commission,” says Hans Schneider. “It was a very special craft, an Expedition Yacht, ordered by a successful American lawyer. It was only for use in the icy waters of the Arctic and Antarctic, where he was engaged in studying penguins. In addition to being a professional expedition yacht, it had to contain all the things that characterise a luxury yacht. Johansen succeeded by having the yacht built in a trawler yard in Denmark, then bringing in some of the world’s best designers of luxury accommodation to furnish the ship. The ability to bring together the right people with the right ideas, is Peter Johansen’s very own.”
Seaworthiness comes first
The first yacht won the admiration of that special group of people in the world who not only have enough money to buy a very special yacht, but also to crew it, operate it and maintain it. The success of the first yacht whetted Peter Johansen’s appetite and Royal Denship’s second vessel was started without the company having a buyer. He appeared during the building process, and so Royal Denship gained a hold on the market. So far the company has built 16 different yachts, from 80 foot high-speed motor vessels in the high-tech class and 258 foot floating palaces to yachts in the America’s Cup class.
“Just about everything is possible if there is enough money,” says Hans Schneider, who was hand-picked by Peter Johansen to run Royal Denship. “But the basis is always a good seaworthy vessel. The decoration comes afterwards, and here the Danish shipyards that we use enter the picture. The know-how and craftsmanship involved have been gained by virtue of Denmark’s role as a shipping nation.”
Royal Denship is currently building nine different yachts and boats. The first to be delivered is a classic 137 foot luxury yacht, ordered by a Hong Kong based businessman.
“We are a bit proud about the order, since it is not every day that you export a ship from Denmark to China. It is usually the other way round,” says Hans Schneider.
ENERGY: The hydrogen economy is approaching at gathering pace, but safe and compact storage of hydrogen is problematic. A research team at the Technical University of Denmark (DTU) has taken out a patent on a method of hydrogen storage, which involves ammonia bound in a solid state, as a safe carrier and storage medium for the far more unmanageable and dangerous hydrogen.
Tue Johannesen, Amminex A/S
The method takes a step closer to a technical solution of one of the most important problems in realising the hydrogen society. It has also created the basis for starting up a new high tech Danish company.
Co-inventor Tue Johannesen explains: “Hydrogen molecules are difficult to handle, and hydrogen mixed with air can be highly explosive. Ammonia as a hydrogen carrier is easier to transport, but ammonia in fluid form is not that safe for ordinary users either, and in large concentrations is very toxic. We have developed a method which combines the attractive properties of ammonia with high safety. By absorbing ammonia in a solid substance, the material becomes as non-hazardous as an ordinary window cleaning agent. When the substance is heated, the ammonia is released and can be used for fuel directly in a high temperature fuel cell or split into free non-hazardous nitrogen and hydrogen which can be fed into an ordinary fuel cell”.
International interest
“There is great international interest in our product”, says Tue Johannesen, who currently has a leave of absence from his position as senior lecturer at DTU’s Department for Chemical Engineering, to be director of start-up company Amminex A/S.
“We are receiving approaches from many parts of the world, and we are currently spending a lot of time screening the contacts and considering the most interesting ones. We are also engaged in a round of financing, and we are increasing our staff so that an optimised prototype can be developed rapidly. When that has happened, we will develop, in collaboration with manufacturers of fuel cells, the adaptations which best suit the various units which will use our hydrogen energy”.
Simple and cheap
“Regarding our technology, these are primarily units which today are powered by lead-acid batteries, and where typically three batteries are cycled constantly – one in use, one on charge and one cooling down. The most obvious applications are forklift trucks, golf carts and electric wheelchairs. A fuel cell powered forklift truck which runs on compressed hydrogen, uses 2.8 kilos hydrogen per day, which is stored at a pressure of 200 bar in four 50 litre steel containers. This can be replaced by just 40 kilos of hydrogen pellets in the form of one or several hydrogen rods.”
But the hydrogen society is not just around the corner. A careful estimate gives a 20 year time horizon before this form of energy feeds through. “There is still no cheaper energy source than crude oil or coal”, emphasis Tue Johannesen, “but it is necessary to think along new lines.”
Commercial breakthrough
Amminex A/S, which holds the rights to the hydrogen pellet, has three shareholders: The inventors, DTU and Seed Capital Denmark. The firm hopes to make a serious breakthrough in 3-5 years, when the most obvious prototypes have been developed, tested and marketed. “But forget everything about pellets in the petrol tank for some time to come, a picture which otherwise is often associated with cars and hydrogen energy”, says Tue Johannesen. “For one thing there will never be many small pellets. For another a lot of other factors must fall into place, before hydrogen energy can be used as the energy carrier on the car market.”
ENERGY: Up to 10% of pricey petrol could soon be replaced with inexpensive and environmentally friendly ethanol sourced from straw. The Royal Veterinary and Agricultural University in Copenha-gen has invented a method which makes the conversion process up to 4 times faster and cheaper than current generation technology. Now bioethanol can become competitive.
“We lack the last part of technology development, but we are certain to get there”, says Professor Claus Felby at the Royal Veterinary and Agricultural University in Copen-hagen. Together with senior engineer Jan Larsen at Elsam Engineering A/S, he has filed for a patent on a process which can convert straw into valuable fuel.
1 ton per hour
The new concept, which could see a large proportion of expensive petrol being replaced with inexpensive and environmentally friendly ethanol, may revolutionise the development of sustainable fuel. In the last two years, the process has been tested in a pilot project at Fynsværket, a combined heat and power plant at Funen, with a capacity of one ton per hour.
“We have the technology, and we know that it works, says Claus Felby. We can convert straw into ethanol in a very simple, rapid and low-energy process. We can run 3-4 times as much biomass through the system and use 3-4 times less energy than previously. The next obvious step would be to build a factory so that the potential could be exploited fully. We are collaborating with Elsam because the power supply plant at Fynsværket is already based on the combustion of straw and waste. So it is obvious to connect our production plant to a power station which has the heat, steam and electricity required to convert the straw into ethanol”.
There is nothing new in using ethanol as replacement for petrol. It is already used today in countries such as Brazil, USA and Sweden, where maize and grain are frequently used as feedstock. In the US there are even plans to stipulate that petrol contains 30% ethanol by 2025. What is new about the Danish invention is that the process has for the first time made it technically and financially feasible to use residual products such as straw and organic household waste as feedstock for ethanol production.
Yeast added
The straw itself is liquidized by means of enzymes and a special mixing technique.
Then ordinary yeast is added to the mix. The result is ethanol which can literally be poured directly into the petrol tank without further processing. Claus Felby says that today 10% of petrol can be replaced with ethanol made from straw without any problems. And in 5-10 years he expects that it will be possible to replace about 40% of petrol with the new type of fuel. If the technology is seriously taken up, it will be possible to replace Denmark’s entire current consumption of petrol with biofuel generated from 16% of Denmark’s agricultural land area.
The reason why production of ethanol based on straw has not advanced further than the pilot project is because there is simply no Danish market, Claus Felby says. “We have the technology and it is even 100% CO2 neutral, but we are lacking support from relevant legislation to continue”, he says. “Today all cars in Denmark can run on a petrol mixture with 10% ethanol, and that quantity could be produced on a small proportion of Denmark’s agricultural land area.”
ENERGY: Accurate measurement of natural light is required to exploit it to maximum benefit – and so save on artificial lighting
A lot of energy can be saved by letting electronics compensate for human forgetfulness.
Servodan in Sønderborg in the south of Denmark knows how to do just that. The company is a northern European leader in development and production of lighting control systems.
“Many of our customers are schools and educational institutions where a lot of money is spent on lighting – often completely unnecessary lighting. The biggest sources of waste are large gyms and classrooms, where the lights are often left switched on when they are empty of people.”
Major savings
So says Servodan’s managing director Henning Schmidt- Petersen, who adds that even with simple systems such institutions can save up to 50% on lighting costs.
“And since much better energy saving light bulbs have been developed, it really starts to have an impact,” says Schmidt-Petersen. “The first energy saving light bulbs could not cope with constantly being switched on and off, but the new generations of light bulbs can. Our control systems are not expensive in relation to the savings they can make. For example, for a sports centre the repayment time is only one year.”
The reason for installing a Servodan light control system is however not always for saving purposes, but also for comfort. “We operate principally in the border region between energy control and light regulation,” says Henning Schmidt-Petersen. “Very often the aim is to create ideal lighting by exploiting natural daylight in a room and dividing the lighting into zones, so that when there is most natural light there is least artificial light, and vice versa.”
Wireless flexibility
Servodan’s core competence is the measurement of light and the exploitation of the measurements to create optimal light conditions together with sensors that detect the presence of people. By combining infrared and ultrasound sensors, optimal conditions are achieved for determining when the lights should be on – and for how long when people are present.
“We have recently exploited this knowledge about light to develop wireless sensors which work by means of small solar cells. It means that you are free of wires when they are installed, and so the sensors can be placed optimally.” Servodan’s expertise is well-known throughout Europe. 60% of the company’s production is exported.
ENERGY: The market for solar cells is growing rapidly. In Germany alone, the market is growing by 40% pa. But when solar cells produce electricity, it is direct current. In order to be used on the national grid, it must be changed into alternating current. For that an inverter is needed.
Director Henrik Raunkjær, Powerlynx – converts solar cell energy into useable power
PowerLynx in Sønderborg in Denmark produces inverters, and is the world’s only company specialising in supplying customized OEM products for manufacturers of solar cell plants.
“We focus on creating added value for our customers,” says director Henrik Raunkjær of PowerLynx. “Our technology enables us to offer an outstanding mix of standard products sold as own labels or customized solutions. We will never get into a situation where we become competitors to OEM customers. Instead we are perceived as a division of their company in our specialist field, the inverter.”
Growing market
PowerLynx originates from Dan-foss, Denmark’s largest industrial company.
Based on Danfoss know-how and power electronics products from the frequency converter industry, the company now concentrates its efforts on the growing market for inverters.
“We focus particularly on German manufactures of solar cell plants,” says Raunkjær. “Germany is today the largest market in Europe for solar cell technology. This is especially because of the payment policy where a surcharge is paid for electricity produced by solar cells. It means for example that a solar cell plant in Germany has a repayment period of only eight years. Previously it was Japan which installed most solar cell plants, but now it is Germany.”
Breakdown
The inverter has been one of the main teething troubles of solar cell plants. The electronics simply broke down due to the strain caused by the plants constantly switching on and off circuits with large power differences.
“Because of our close partnership with Danfoss, and our experience regarding their thoroughly tested and industrialised products, we supply some of the world’s most durable and most advanced inverters. The combination of quality and our OEM business model makes our collaboration with solar cell manufacturers unique.”
…“The small combined power and heating systems are especially suited to small apartment complexes, schools, nursing homes, hotels and large farms”…
Hotel Fanø Badeland – powered by EC Power
Even in the coldest winter months, a visit to Hotel Fanø Badeland should be a warm and exotic experience. But when electricity is the only energy source, which was the case until 2002, then it was an expensive pleasure for the owner Bjarne Bøgh Jensen. In 2002, he had three XRGI Mikro combined power and heating plants installed, and just one year later he sliced almost EUR 62,000 off his energy bill. Instead of paying EUR 113,000 annually for heat and electricity, the bill was EUR 51,000.
The XRGI systems produce electricity and heat for Hotel Fanø Badeland from diesel engines. They were supplied by EC Power, a company specialising in micro combined power and heating systems. EC Power was established by a group of Danish heating engineers with experience in heat as a byproduct of electric power generation. The aim was to produce systems with as high a level of utilization of the fuel as possible, generating electricity and exploiting the waste heat of production while minimizing energy losses by producing electricity and heat locally.
“In addition to the savings on the energy bill itself, there are large savings on the environment,” says Michael Finderup Jensen, sales and marketing manager at EC Power A/S. “In the case of Hotel Fanø Badeland it saves the environment around 390 tons CO2 – quite simply because the fuel is exploited to a level as high as 90%. In addition, energy losses are reduced by producing the energy locally.”
The most recent of EC Power’s small combined power and heating systems are based on engines developed in collaboration with Toyota. The engines are driven by natural gas and deliver an output of 13 kWel and 29 kWth. EC Power also supplies a 17 kWel and 26 kWth modified Same-Deutz diesel engine. Both systems can be assembled in series to achieve the desired output.
“The small combined power and heating systems are especially suited to small apartment complexes, schools, nursing homes, hotels and large farms,” says Finderup Jensen. “In Germany in particular and to some extent Great Britain, we are seeing hugely increasing interest because in those countries, it is also possible to sell excess electricity to the national grid. In itself, that provides additional financial gain. In Ger-many alone, we expect the market for XRGI systems to increase from about 5,000 to 20,000 units annually for years to come.” EC Power is a total supplier of the systems. The company develops the systems itself, installs them and provides continuous service in Denmark and Great Britain. In Ger-many, the company is building up a nationwide network of dealers to handle installation and servicing of the systems. Each system comprises an engine, a heat distributor, buffer tanks and a control unit, and is connected via modem to EC Power’s monitoring module, which carefully monitors the operation of the system.
“Purchase and installation of a system typically costs between 34,000 and 38,000 Euro” says Finderup Jensen. “It gives a repayment period of less than three years.”
LIFESTRAW: Every year two million people die as a result of drinking contaminated water, particularly children and old people with weakened immune systems. Contaminated water transmits diseases such as typhoid, cholera, dysentery and diarrhoea. And more than a sixth of the world’s population – over a billion people – do not have access to clean water.
But now there is hope in sight. The Danish company Vester-gaard Frandsen has invented a simple device – a drinking straw called LifeStraw – which sucks in contaminated water at one end and delivers drinkable water at the other. LifeStraw delivers 99.999999% clean water, which is cleaner than most of the water supplies in developing countries.
LifeStraw consists of a three-compartment tube. The largest contaminant particles are immediately filtered out as water is sucked into the tube. The water passes into the first compartment, filled with an iodine based resin which kills bacteria and viruses. After that, it passes into an empty compartment where the iodine continues to be active. Finally the water is sucked into the last compartment containing granular activated carbon to help remove the taste of iodine and precipitate any heavy metals and water-borne parasites.
1 litre in 8 minutes
“It takes about eight minutes to suck a litre of water through the tube,” says development director Torben Vestergaard Frandsen, the man behind the revolutionary invention. “The tube weighs less than 100 grams, and can be carried on a string around the neck so the wearer always has access to clean water. It costs only around USD 3, and the tube is active without needing to be cleaned for about one year.” LifeStraw has been received with enthusiasm throughout the world, and many have called it the invention of the year. In autumn 2005, LifeStraw received the prestigious INDEX: 2005 design award, on account of the fact that the product is highly accessible, with no moving parts that can break, and with no need for any energy source other than the user’s ability to suck.
In the US, the product is awaiting approval from the health authorities before it can be sold on the free market, but this is expected to be given in the not too distant future. Hurricane Katrina, which caused massive destructions in Louisiana and Texas last year, highlighted the pressing need for clean drinking water when public systems break down.
Emergency aid
“We have delivered the first large batches to emergency aid organisations which are working in Pakistan after the devastating earthquake, and the reactions have been very positive,” says Torben Vestergaard Frandsen. “There have also been responses on minor adjustments that are needed, and we have done that.”
When Vestergaard Frandsen first started grappling with the drinking straw concept, he began by using filters made from fabric, but quickly discovered that it was unworkable. Even the most fine-meshed filter could not capture particle under one micron in diameter; cholera bacteria for instance are less than half a micron in size. But the idea progressed, and a team comprising Rob Fleuren from the Netherlands, and Moshe Frommer from Israel developed the drinking straw to its current shape.
ENVIRONMENT: Think of wind energy, and you think of Denmark. Since the 1980s Danish produced wind turbines have been installed all over the world. One of the major players on this market is Energi E2 Wind Energy
Kim Ernst, Vice President of E2 Wind Energy
“At E2 we have made a strategic decision to play an active role in the production of renewable energy from wind turbines,” says Kim Ernst, Vice President of E2 Wind Energy. “By supplementing our current business area on the Scandinavian energy markets, where our production is based on and dependent on fossil fuels, with investments in wind, we both reduce the total risk profile and increase our earnings. Wind energy is also an environmentally friendly technology which today makes by far the largest contribution to reducing CO2 emissions in Denmark. In fact around half of the CO2 savings to which Denmark has committed itself through the Kyoto agreement, come from wind turbines.”
Compared to E2’s total production of electricity and heat from CHP plants however, wind energy accounts for a small part of the business. Of annual revenues of DKK 6.5 bn, the wind energy business generates a mere DKK 600 m. Output from currently installed wind turbines nonetheless corresponds to over 20% of Denmark’s electricity consumption.
E2 also has stature from a European perspective. “Globally, we are among the six largest businesses based on wind from wind turbines on land and off shore,” continues Kim Ernst, who makes no secret of the fact that this position must at least be maintained. “We have great expectations regarding offshore wind turbines, and we have the world’s largest offshore park, Nysted Havvindmøllepark, off the coast of Lolland. We have discovered that the local population is generally very interested in wind power, and most are sympathetic towards wind energy, but they don’t want turbines right next to where they live. So we are focusing on offshore parks which are so distant from residential areas, that noise and reflection nuisances are eliminated.”
Multi contracting
According to Kim Ernst, the offshore park at Nysted is currently the only one in the world which has been installed on time, on budget, and according to plan. That is because E2 used a different approach than normal where turnkey contracts dominate.
“Over the years we have developed a multicontracting approach where we have developed and professionalized our in house facilities to carry out the many tasks. We enter agreements with a number of sub-suppliers, who are then managed by building contractors from E2. Our overall strength is that we are experienced in tying the projects together and getting them to function according to plan. We introduced this concept when we started building CHP plants, and now we are continuing it with offshore parks. There are clearly many new problems when you are building offshore, like inspecting foundation work under water, but it is our opinion that all problems can be solved.”
As a pan-European operator, E2 has land-based and offshore production in Norway, Sweden, Spain and Greece. In the coming years, E2 will focus on continued expansion (in addition to Denmark) in Spain, and there are ongoing projects in Germany, UK and Portugal. In total there is a pipeline investment portfolio of between DKK 12-15 bn over a 5-6 year period.
ENVIRONMENT: Tom Larsen, the enthusiastic Mayor of Rudbjerg, wants interplay with important private sector players in the wind energy area. His plan is to establish a Wind Power Academy.
Tom Larsen is a man with many ideas, and for him it’s a short distance from ideas to action. Previously an estate manager, as well as a wind turbine salesman in his spare time, he was elected Mayor of Rudbjerg municipality on the southern Danish island of Lolland eight years ago. That gave him a platform for carrying out many of his recycling and energy saving ideas. In 2005, the municipality was judged the year’s energy saving municipality in Denmark: But Tom Larsen is not stopping there.
Visions
“Kappel Park, where Energi E2 wants to establish a demonstration park for new offshore wind turbines, is located in our municipality, so it was obvious to start a collaboration”, says Tom Larsen. “I had the idea of uniting all players involved in this test site including research scientists, manufacturers and sub-suppliers, in a shared organisation.
I envisioned the establishment of a Wind Power Academy, where stakeholders could exchange experience and knowledge. Where research could be conducted not only into development of wind technology, but also in derivative issues such as the interplay between turbines and the energy grid, storage of energy. And above all further development of the operational and service aspects, which represent considerable value to the turbine owners.”
Sales of fices
“These wind turbine parks could become a giant shop window for the world”, continues Tom Larsen. “There are no reasons to stop with Danish stakeholders, so I am trying to get in contact with German companies in the industry. I am collaborating with the Danish Embassy in Berlin to raise the profile and provide a perspective on the entire project for German players.
In the near future, I am attending a fair in Hamburg, and after that we will arrange a conference in Berlin for German companies. It is my hope that large foreign players will place their own turbines in our test parks in the future, and combine their presence with the establishment of sales offices.”
“In 10 years I imagine the park will look like this: Both manufacturers and suppliers have offices in the area, several Danish companies in the industry have moved their entire development department here and there are many sales offices. In one place new foundations are being tested, in another a new project is being initiated regarding transport of new large wind turbine blades, at the same time as a new cross disciplinary research group is set up with the purpose of conducting research into the service life of wind turbines.”
http://www.windpoweracademy.com
ENVIRONMENT: Denmark is the world’s capital regarding solutions to environmental problems. Niras is one of the largest consulting engineers, and has been involved in thousands of international environmental projects over the last 50 years.
“When the company started in 1956, our competencies were primarily based on projects in Greenland, and on natural gas. That was an unsustainable project portfolio long-term, so in the early 1980s we changed the strategy”, says Torben Chrintz, who heads the Environment and Energy division. Niras embarked on an acquisition strategy, which not only compensated for the company’s insufficient size, but also added new competencies and ensured a greater geographic spread. Today Niras has offices in the Nordic countries, Poland, Bulgaria, Russia, the Middle East, Tanzania and Vietnam. The latest addition is in Ukraine.
Major player
“The environmental area accounts for a third of total revenues”, says Torben Chrintz. With 250 people employed in the environmental division, Niras is one of the largest players in this area in northern Europe. Chrintz believes that growth in the environmental area has to be international, because this is where the most potential lies. Accordingly, the structure in the environmental division was changed so that in principle everybody can work internationally. The international department was closed, and through courses and supplementary training all staff were geared up for carrying out international tasks. The new strategy can be summarised: It is not one person’s job to globalise Niras – it is everybody’s job.
One of the core competencies is solving problems oncerning soil and groundwater pollution. 150 people work in this area, which places Niras very high on an international scale, measured on both volume and competence.
Active in USA
Niras is very active on the American market, says Torben Chrintz. “We have succeeded in impressing the Americans with our knowledge and competencies in building and using biogas plants in the agricultural sector, and we expect a lot from this market. This focus area should be seen in the context that some years ago we changed strategy and acquired a number of core competencies in alternative and renewable energy. At the time, it was a bad decision in financial terms, but from a visionary point of view it was good. Today we are confident that the American market will be very promising for us, especially seen in relation to the Bush plan, where USA wants to reduce its oil imports by 75% by 2025”.
By Steen Bocian, Chief Analysist, Danske Bank
In the world of sports, new records always grab a lot of attention. The Danish economy is in a phase where it is setting new records almost at will. Both businesses and households have greater confidence in the future than ever. Growth in house prices and retail sales has surged to new highs, and Den-mark is running record surpluses on its current account and budget balances. On top of this, unemployment has plummeted almost to a 30-year low.
Last year, the Danish economy expanded by 3.4% –nearly double its trend growth rate. While the upswing in 2005 was driven by a surge in consumer spending, surprisingly strong growth in both exports and machinery investment helped broaden the expansion compared to the early stages of this recovery.
Consumer spending has been growing at a strong rate since mid-2003 and last year expanded by 3.5%. Consumers’ appetite for spending is driven, not least, by the boom in Danish house prices in recent years. The value of an average home rocketed by DKK 250,000 from the fourth quarter of 2004 to the fourth quarter of 2005, and home values in the greater Co-penhagen area tripled this rise. The growth in home values has made many homeowners cut down on their savings, and they will hence distribute their wealth gains across their entire lives. This is the reason consumer spending is outgrowing income.
As the Danish economy has expanded, unemployment has fallen steadily since winter 2003/ 2004. Over the past two years, the number of people out of a job has decreased by 46,400. The sharp drop in joblessness has taken the official unemployment number down to its lowest level since 1976, at 139,600, or 5% of the labour force. This has put the spotlight on the efficiency of the Danish labour market. There is already now a shortage of labour with certain qualifications and hence a looming danger of the Danish economy overheating.
As the unemployment benefits system in Denmark is rather extensive, it is not very likely that unemployment can be pushed much further down. True, lower unemployment rates were seen in the 1960s, but the benefits system was not as far-reaching in those days. Thus the Danish economy is now sailing into uncharted waters. The tight capacity situation has as yet had no visible effect on wages, with the latest data showing growth from Q3 2004 to Q3 2005 of 2.8%. However, we do expect that accelerating wage growth will eventually squeeze Danish competitiveness over the next few years.
Meanwhile, the tight labour market will boost investments in the coming years. Investment in machinery shifted into high gear in 2005 and we expect this trend will continue in 2006. The rapid pace of investment growth will lay the foundation for relatively high growth in productivity per worker and this should help offset some of the pressures that might arise in the Danish economy. Increased investment activity will, in addition, cause imports to rise.
Although we see imports rising, we do not, however, expect the current account to suffer unduly in 2006. This is because the biggest economic surprise of recent years has been exports. While domestic growth has been very robust, exporters managed to increase their market share in 2005 – industrial exports, for instance, jumped almost 10%. Part of the explanation for this fine performance was a favourable movement in the euro/dollar exchange rate that benefited Danish competitiveness. However, this does not fully explain the positive developments, meaning Danish exporters have simply been good at adapting to a difficult market. This tends to make us optimistic on exports going forward, even though the tight labour market will put some pressure on Danish competitiveness.
