Shore power: a critical investment for the maritime industry

The maritime industry plays a crucial role in the overall fight against the climate crisis. Responsible for transporting around 90% of the world’s trade, international shipping contributes to approximately 10% of global CO₂ emissions. In July 2023, the International Maritime Organization (IMO) adopted a new strategy with enhanced targets to reduce GHG emissions from ships. This important decision sent a powerful message — the industry must make needle-moving decisions to adopt technologies and initiatives that will drive sustainability goals.

Reducing maritime emissions has always been a multi-layered challenge, involving many variables including ship type, fuel choice and ports. When it comes to ports, infrastructure efficiency, renewable energy integration and shore power availability are crucial to boosting environmental sustainability. Green ports that effectively leverage shore power are a key part of the shipping industry’s green transition. In 2022, the Port of Rotterdam reached a 20% utilisation of shore power and saw a 14% reduction in port-related CO₂ emissions compared to 2008.

While shore power was first introduced to the maritime industry more than two decades ago when cruise line Princess Cruises began operations of its shore power program in 2001, widespread adoption of the technology never quite took off. Progress of adoption has been slow and with limited reach largely due to upfront costs and time required for implementation, particularly pertaining to shore power infrastructure. Only recently — as decarbonisation began to take centre stage globally — did the industry start revisiting their benefits of reduced emissions, improved fuel efficiency and overall viability.

Today, the renewed vigour to decarbonise the maritime industry has resulted in a new conversation focusing on shore power.

Shore power infrastructure

Ships by nature, like airplanes, consume large amounts of fuel when in operation. Studies show that the cost of refuelling a sizable container vessel ranges from AU$12 to 25.3 million, which can account for a significant 50 to 60% of a ship’s overall operating costs. While the industry continually finds ways to reduce fuel reliance, such as using dual-fuelled vessels, another option is for vessels at berth to obtain power source from land. With shore power, vessels can shut down their main and auxiliary engines, which consume fuel even when they’re docked, thereby reducing their greenhouse gas emissions and air pollution.

Shore power enables ship operators to see as much as a 10% reduction in fuel consumption and emissions, depending on the vessel type and trade. Connecting to shore power also enables ships to reduce the wear and tear on auxiliary engines. With the reduction in frequency of maintaining auxiliary engines, ship operators can focus on other core operations or revenue-generating tasks on board.

However, despite the numerous benefits that shore power could bring, the rate of adoption of shore power infrastructure is still relatively low. This could be due to high costs of installation and operations. Dan Stahl, CEO at the Port of Longview in the US state of Washington, suggested that shore power was only viable if its installations are subsidised by the government.

That being said, in the near future, we expect that more vessels equipped with the technology to receive and use shore power will enter the market. This can be due to factors such as stricter environmental regulations and more supportive government policies, rising fuel prices and rapid technological advancements. When we drill down to the core benefit of energy efficiency, the numbers are incredibly promising. Compared to a diesel engine, fuel savings of approximately 17% can be observed by using a hybrid engine. For traditional ships, cold ironing — where the ships turn off their engines while berthed and plug into an onshore power source to keep onboard services running — can save over 30% of CO₂ emissions and more than 95% of nitrogen oxides (NO_x) and particulates.

In tandem with this positive outlook, the global Shore Power Market is forecasted to reach close to US$4 billion (AU$6bn) by 2030. The Asia–Pacific (APAC) region, which houses some of the largest and busiest ports in the world, currently holds the leading position in this growing market. It is forecasted to maintain this lead with an attributed value of US$1.415 billion (AU$2.15bn) by 2030.

Adoption of shore power systems in APAC

In line with the IMO’s greenhouse gas strategy, countries in the region are increasingly taking action against ship emissions violations. In 2023 alone, several enforcement actions were taken:

• February 2023 — The Indonesian Directorate General of Sea Transportation (Hubla) imposed penalties on several domestic shipping companies for failing to comply with sulfur oxides (SO_x) emission limits. The penalties included warnings, fines and temporary suspension of permits.
• April 2023 — Maritime and Port Authority of Singapore (MPA) fined a Singapore-flagged container ship S$450,000 and reprimanded its operators for exceeding SO_x emission limits while at port.
• May 2023 — The Malaysian Maritime Enforcement Agency (MMEA) detained a Panamanian-flagged general cargo ship for exceeding NO_x emission limits while berthed in port. The ship was released after rectifying the issue and paying a fine.

The stricter enforcement of emissions limits and financial penalties for infractions are likely to make shore power more attractive to port operators and ship operators alike. Growing public awareness of the importance of sustainability may also drive increased collaboration between the government and the private sector to implement shore power systems. This is especially important given the scale and cost of such projects, which make government support a non-negotiable. So, what do governments need to consider before investing heavily in shore power?

When forging a private–public collaboration, governments must first assess a company based on its portfolio of past projects. One successful case study involves the projects by National Grid Corp. of the Philippines (NGCP), a grid operator that has been rapidly modernising the country’s transmission network without compromising sustainability. Since 2009, the NGCP has been efficiently rolling out critical grid projects, completing a total of 56 significant projects in less than 20 years. To do so, NGCP actively collaborates with various private and public stakeholders focusing on smart energy solutions such as CHINT. If the company checks the box of having a strong portfolio in working with governments, it also means that they are well versed in navigating bureaucracy while adhering to deadlines.

The next box to check would be the suite of services that the company can provide versus its price tag. Shore power projects are often large in scale, meaning that companies bidding for the projects must also be able to counsel the government on the feasibility of their tender specifications. In projects this large, a holistic approach led by a team of experienced engineers is required. On top of installation and the supply of products and equipment, consultations are critical to finding the most fitting and sustainable solution.

There have been cases of shore power infrastructure projects that have failed and the industry looks at them as cautionary tales. As such, their selection process has understandably become more stringent.

However, government and industry players should continuously collaborate to identify opportunities to overcome adoption challenges. When implemented, all stakeholders can reap the benefits of shore power, which would be a key driver of sustainability and economic resilience in the maritime sector.

Image credit: iStock.com/eejay62