From oil to wind:

Energy revolution in Danish town

From black gold to green power. That is the growth secret of Esbjerg, a harbour town of Denmark, which has evolved from fishing port, to oil and gas base, and now, shipping and offshore wind industries hub.

Located on the southwestern coast of Jutland peninsula, Esbjerg has witnessed great economic changes as it reinvents itself as a knowledge and services base for the world's energy industries.

Wind power

And as Denmark's oil and gas reserves decline, today the town is betting on clean, green wind power to deliver economic growth, and keep its 115,000 inhabitants employed and wealthy. "Esbjerg is the hub for Denmark's oil and gas industry, and the most important harbour and business environment within the offshore wind sector in Europe," said Tom Nielsen, Director of Esbjerg Business Development Centre. "We focus on what we do best: offshore wind, offshore oil and gas, wave energy, and also bio-energy, where we have strong competence with a cluster of companies here," he told Xinhua at the 2011 Offshore Wind International Business2Business event.

Climate change challenge

Esbjerg's location on the North Sea puts it close to the growing UK, German, Belgian and Dutch markets for offshore wind power, meaning that wind-turbines and their components, can be quickly transported by sea to wind parks in the region.

Moreover, two of world's biggest wind-turbine manufacturers, Vestas of Denmark and Siemens of Germany, have operations in Jutland. The components they make are trucked into Esbjerg port, partly assembled, and then transported to deep water wind parks off the Danish coast, or shipped to regional projects. In all, about 65 percent of Danish wind-turbine exports are shipped via Esbjerg port. "The market is in the North Sea," said Ole Ingrisch, Director of the Port of Esbjerg. "We have now installed a total of 3 gigawatts offshore wind-turbines (here), 2 gigawatts of which are installed from Esbjerg port itself. So we have a market share of 66 percent," he told Xinhua.

The Danish government wants 50 percent of Denmark's electricity to be produced by wind energy by 2020. As the small Nordic country of 5.5 million people runs out of space on land, it is increasingly pinning hope on offshore wind farm to address the rising climate change challenge and needs of clean energy.

Meanwhile, the EU wants to install 40 GW of offshore wind power capacity in the North Sea region by 2020, and 11,000 megawatts capacity per year from 2021 to 2030. These developments will secure Esbjerg's role as a regional offshore wind hub in the decades ahead.

Fishing, oil and wind

Esbjerg's economic journey began around 150 years ago, when the then Danish government decided to build a harbour here to export agricultural products to England, which was the biggest industrial power at the time. It witnessed a fishing boom from the end of the 19th century, and soon became Denmark's fifth largest town.

Roughly one million tons of fish were landed per year in Esbjerg during its heyday, but fishing and fish-processing declined in the 1970s, owing to depletion of fish stocks and subsequent EU fishing quotas. But just as its luck seemed to run out, oil and gas prospecting kicked off in the North sea, allowing Esbjerg to develop into an offshore hub for the oil industry.

With Denmark's share of North Sea crude set to run out within the next 15 years, offshore wind power has now become the next energy bonanza. "If we did not have this movement, there would not be a town here today," said Flemming Just, Director, Museums of South-West Jutland.

"The whole region has developed due to the port of Esbjerg, the fishing industry, and its factories. But now we see it moving from the traditional fishing, and industrial oil town, to a post-industrial town based on the windmill sector," he told an exclusive interview with Xinhua.

As the town's industrial character has evolved, it has become a magnet for foreign capital and talent, and has developed clusters of competence in offshore energy-related activities. "We have the whole knowledge value chain represented in the Esbjerg area, from engineering businesses to servicing of offshore wind farms,"said Nielsen.

Modern wind-turbines are over 60 meters tall, have 75-meter long rotor blades, and pack an array of sensitive electronic control mechanisms. Thus, the technological complexity involved in manufacturing, transporting, assembling and servicing them requires a sophisticated supply chain.

Esbjerg, which is home to a number of shipping, hauling, IT, energy and utilities, engineering management and service companies, has therefore been able to market itself as a one-stop shop for offshore wind industry. In turn, that has spawned a host of ancillary businesses, including deep-sea diving firms, rig operators and helicopter-rescue services.

Today, some 250 companies here operate in the energy sector, with 9,000 employed in oil and gas, and 1,000 in offshore wind industry.

The harbour, as the town's economic engine, is Denmark's biggest by area, and is mainly engaged in offshore oil, gas and wind-turbine operations, including turbine assembly. It also handles around 4 million tons of cargo per year.

"The harbour is the most important commercial core for Esbjerg. The town and port have grown together: this is where the jobs are, where the activity happens," Ingrisch said.

Cultural attitudes

The port is investing around 65 million euros from 2011 onwards, as it wants to grow together with the rapidly-expanding offshore wind sector, which it has been involved with over the past 15 years.

"The problem will be whether we can keep our market share. There are a lot of competitors out there: other companies producing wind turbines and other ports who want to go into this business," said Ingrisch, pointing at the big offshore wind markets such as the UK and Germany, some of whose port cities also want a slice of the cake.

Meanwhile, the oil and gas sector, while a big earner in its own right, continues to have important synergies with the offshore wind sector.

These synergies relate to project execution, servicing and maintenance of offshore wind turbines, where the skills and equipment needed are already found in parts of the offshore oil rig business.

Esbjerg's evolving economy has also meant a transition in type of workforce attracted, and in turn, a shift in the town's cultural attitudes. "There is tremendous change in culture and attitudes because of the change from a fishing town to an offshore industry town," Just said. "In old days, it was said that nice girls didn't go out in the evening in Esbjerg. It was... a rough place," he recalled.

Now, there are no more fishermen here, and the number of people employed in traditional industrial occupations is declining. And the town's windswept skyline is a modest blend of traditional homes and newer architecture, trendy shopping arcades, museums and an imposing concert hall.

But given its frontier spirit, the town is already exploring the next big idea which, according to Nielsen, is wave energy, where seaborne installations harness the power of the sea.

"We have seen the decline of many other fishing ports in Europe, many of which are completely dead today. But Esbjerg has been lucky: it has grasped the opportunity to step into new business areas," Ingrisch said.

Xinhua