CNSS Work package 4, Showcase OPS Onshore Power Supply (OPS) Survey Status and future Compiled by: LightSwitch AB, SMTF and Hordaland County Council March 2014 ONSHORE POWER SUPPLY (OPS) SURVEY Table of contents 2 1. Executive summary 4 2. Introduction 2.1 About the CNSS project 2.2 Objectives of this report 2.3 Delimitations 2.4 Disclaimer 6 6 7 7 7 3. Background 3.1 Introduction 3.2 The global context 3.3 Stakeholders 3.3.1 Legislative and political level 3.3.2 Sector specific stakeholders 3.3.3 Commercial stakeholders 3.4 General policy framework on OPS 3.4.1 Introduction 3.4.2 International 3.4.3 European port and shipping stakeholders 3.4.4 Non-Governmental Organisations (NGOs) 3.4.5 The European Union (EU) 3.4.6 Regional level 3.4.7 National level 3.4.8 Sub-national level 3.4.9 Municipal level 3.4.10 Ports, ship owners and grid companies 3.4.11 Shipping Indices 3.5 Stakeholders: Summary and conclusion 3.6 Corporate Social Responsibility (CSR) 8 8 8 9 9 10 10 11 11 11 13 14 15 20 20 21 21 22 23 23 24 4 Overview of available technical solutions 4.1 OPS 4.1.1 Introduction 4.1.2 Low voltage connections 4.1.3 High voltage connections 4.1.4 Frequency 4.1.5 Grid issues 4.2 Other alternatives 4.3 Technical aspects of OPS 4.3.1 Ports 4.3.2 Ships 25 25 25 25 25 25 26 26 28 28 29 5 Environmental impact of OPS 5.1 Introduction 5.2 Ship emissions in ports and at sea 5.3 Noise reduction 5.4 OPS – a clean shipping technology? 5.5 Environmental cost-benefit 30 30 30 32 32 34 6. Mapping of OPS in the North Sea Region 6.1 The North Sea Region 6.2 National differences 6.2.1 Sweden 36 36 36 36 6.3 6.4 6.5 6.2.2 Denmark 6.2.3 Norway 6.2.4 Germany 6.2.4 Netherlands 6.2.5 Belgium 6.2.6 UK Conditions for different types of traffic 6.3.1 Ferry/RoPax traffic 6.3.2 Cruise traffic 6.3.3 Global liner traffic 6.3.4 Short-sea liner traffic 6.3.5 Other traffic types Ship owners Status of OPS in ports in the CNSS area 36 36 37 37 37 38 38 38 38 38 38 38 39 40 7. The commercial perspective 7.1 Introduction 7.2 Ports perspective 7.3 Ship owner perspective 43 43 43 44 8. Case studies 8.1 Case study 1: Hamburg 8.2 Case study 2: Stena Line 45 45 46 9. Overall analysis 9.1 Introduction 9.2 Ship owners 9.3 Ports 9.4 The ship owner and port authority interface 9.5 Type of traffic 9.6 The public sector 9.7 Technical aspects 9.8 Commercial / Cost /Investment aspects 9.9 Environmental benefit 9.10 Status in the North Sea Region 48 48 48 48 48 49 49 50 51 51 52 10. Main 10.1 10.2 10.3 10.4 53 53 54 54 55 11. Recommendations 11.1 Introduction 11.2 Regulatory issues 11.3 Environmental issues 11.4 Commercial aspects 11.5 Technical issues 56 56 56 57 57 57 12. Bibliography 58 13. List of interviewees and references 60 findings Regulatory issues Environmental perspective Commercial aspects Technical issues 3 ONSHORE POWER SUPPLY (OPS) SURVEY 1. Executive summary The shipping sector accounts for a significant share of harmful pollutants to the air, which constitutes a pressing problem in many port communities. Increasing concentrations of NOx, SOx, PM and other substances and gases constitute a major threat to public health in ports and surrounding areas. Large ships are also major contributors to global CO2 emissions. Due to the truly international character of the trade it is difficult to enforce regulations to limit the environmental effects of shipping. Similar to aviation, ship fuels and emissions are not regulated as strictly as land-based transport. In addition, the replacement rate for ships is much slower than for trucks and buses, which means that few energy efficient new ships enter the market every year. The result of the study confirms that OPS is a complex issue involving a large number of diverse stakeholders at various levels in society and the shipping supply chain. Although not technically complicated, the question of whether to invest in OPS or not depends on a large number of interrelated issues that ports and ship owners must evaluate, i.e. commercial viability of the investment, environmental impact, rate of utilisation as well as impacts of future emission reduction regulations on the trade. Globally, OPS is today far from being a widely used technology, however there are some progressive regions that have taken great strides in deploying the technology, most notably the west coast of the United 4 States. As environmental awareness and concern is growing in society at large but also specifically in the port and shipping community, OPS is a technology attracting increasing attention as a tool to combat emissions. Corporate Social Responsibility (CSR) is something that historically have not been at the top of the agenda in shipping, but there are signs that CSR considerations are having increasing impact on company balance sheets and this is a trend that is likely to grow in future. In the North Sea region we have found the public sector to be a crucial driving force in promoting OPS, both through incentives (tax reductions and grants) and strict environmental legislation. A large number of studies have shown that OPS has the potential to significantly reduce emissions of harmful substances and greenhouse gases to the air. OPS is primarily a technology designed to combat local air and noise pollution but if deployed on a large scale it may also provide large CO2 savings. Technically, OPS is not a complicated issue and new global standards provide good guidance for implementation. However, there are some issues around frequency (50 or 60 Hz) and the location of the equipment onboard ships that still remains a challenge. Most components used in OPS installations are standard and widely used in other types of electrical power equipment. In regard to the onshore grid, OPS do not pose any major challenges, with the possible exception of cruise ships that have a very high power demand. Mostly it is a matter of cost and time to reinforce the grid locally. The environmental and commercial success of any given OPS installation needs to be evaluated on a case-by-case basis as the conditions for individual ports and ship owners vary greatly. In general terms however, one can conclude that OPS is particularly suitable for liner traffic spending considerable time in port. The more power that is generated onshore by renewable sources compared to onboard ships by means of auxiliary engines, the more an OPS investment makes commercial and environmental sense. In a long term perspective, the issue of rising CO2 emissions to the atmosphere is likely to result in tougher regulations on all polluting sectors, including shipping. OPS also provides a means for society to indirectly influence the unregulated shipping sector since shorebased electricity generation is included under the CO2 emissions ceiling whereas fuel used in auxiliary ship engines is not. The OPS mapping of the North Sea region has shown that Sweden is in the lead when it comes to the largest number of installed OPS systems. There are however very interesting developments also in Norway, Germany, and the Netherlands. commercial impact of OPS. For some time the OPS debate has been dominated by the “chicken or egg” question relating to which actor should take the first step in investing in OPS – the port side or the ship owners. Throughout this project it has become clear though that the public sector plays a critical role in promoting the deployment and utilisation of the technology in the shipping sector. It is highly unlikely that ship owners will take the initiative for a sector wide implementation of OPS. Society, in the form of national, regional and local government, has several instruments at its disposal for promoting deployment of OPS and other clean shipping technologies, such as differentiated port dues, tax reductions for shorebased power as well as grants. In addition, the public side could play a more active role in supporting effective collaboration and knowledge transfer in the sector. The CNSS project together with involved stakeholders is willing to provide recommendations to help combat local air pollution and global emission from the shipping industry. Taking a long-term perspective, OPS does have an important role to play, provided that society is willing to solve the environmental and health problems caused by shipping. There are several examples of successful OPS installations, which more ports and ship owners could learn from. Some question marks remain regarding the optimal model for utilisation and the real environmental and 5 ONSHORE POWER SUPPLY (OPS) SURVEY 2. Introduction 2.1 About the CNSS project The Clean North Sea Shipping (CNSS) project, involving 18 partners from six countries, seeks to address the problems caused by air pollution and greenhouse gases produced by ships operating along the North Sea coast and within North Sea ports and harbours. A reduction in exhaust gas emissions from ships will improve the general environmental situation in the North Sea Region.The CNSS project aims to create awareness, share knowledge and convince influential stakeholders, including regional and European politicians, ports, shipping companies and cargo owners, to take action. The Clean North Sea Shipping (CNSS) project has thoroughly examined a matrix of OPS initiatives as well as their impact on society with the aim with the to visualise current status and future, provide 6 recommendations and exchange experiences with policymakers, ports, terminal operators and shipping companies; - Exchange of experiences - Providing recommendations for improvement - Guideline for policymakers on implementation of technologies towards cleaner shipping - Stimulate as many ports, terminal operators and shipping companies as possible to implement available technology, for the benefit of the environment and their future The OPS report is the result of one of the activities of the WP4 Clean Shipping Technology work package. 2.2 Objectives of this report This report provides an analysis and mapping of the current status and prospective development of Onshore Power Supply (OPS) in the North Sea Region. The report was commissioned by the Clean North Sea Shipping Project, to provide insight into a topical issue currently of great interest to the shipping sector in the region and internationally. The purpose of the report is to provide an updated picture of the status of onshore power supply installations in the North Sea Region. This report aims to answer the following questions: • Chapter 3 who influence OPS investment decisions? • Chapter 4 what is the technology? • Chapter 5 what are the main drivers behind the investments? • Chapter 6 which ports and ship owners have invested in OPS? • Chapter 7 what are the barriers to investment? • Chapter 9-11 what does the future hold? Will OPS become the norm? The status of OPS in the North Sea region is analysed according to a stakeholder perspective, including a mapping of public and private stakeholders at the international, national, regional and local levels. interviews with a large number of stakeholders across the North Sea Region, including ports, ship owners, sector organisations, researchers, grid owners and representatives from the EU as well as national/regional/local government. To get a comprehensive background to the subject we have also taken into account a number of academic reports, feasibility studies and media articles. This report will form a sound basis for further study and exchange of knowledge between the different stakeholders with an interest in OPS technology in the North Sea Region. 2.3 Delimitations The study is primarily focused on high voltage OPS connections for sea-going ship traffic in the North Sea region, thus excluding onshore power for inland barge traffic from the report. The main emphasis is on High Voltage Shore Connection (HSVC) although throughout this report we refer to the technology with the more general term Onshore Power Supply (OPS). 2.4 Disclaimer This report is based upon a large number of sources, the analysis of which reflects the project team’s interpretation of the information. Open sources and interviews reflect information that is generally accessible, however as the study concerns a matter with possible business impact, confidentiality may have had an effect on the material available. The opinions, findings and conclusions expressed in this publication are those of the authors. During the course of the research however, we have liaised closely with the CNSS project management and the results of the OPS Survey have also been subject to review by an international reference group.1 To answer these questions we have conducted 1 The international reference group consists of Antonis Michail, ESPO; Mauritz Prinssen, Port of Rotterdam; Per Rekdal, Port Of Oslo; Jürgen Zabel, SAM Electronics; and Lorene Grandidier, Schneider Electric. 7 ONSHORE POWER SUPPLY (OPS) SURVEY 3. Background 3.1 Introduction Onshore Power Supply (hereafter referred to as OPS) is a technology that enables vessels to replace the use of auxiliary engines whilst at berth. The technology is sometimes also referred to as Cold Ironing, Alternative Maritime Power (AMP), or High/Low Voltage Shore Connection (HVSC/LVSC). In this report we focus on HVSC. Whilst in port vessels require electricity for various activities, including loading and discharging cargo, heating, lighting and air conditioning. This power is normally generated by diesel fueled auxiliary engines emitting sulphur dioxide (SOx), nitrogen oixides (NOx), volatile organic compounds (VOCs), particulate matter (PM), carbon dioxide (CO2) and other green house gases (GHG), negatively affecting the air quality of local communities. Low frequency noise from auxiliary engines is another local environmental problem in ports. Instead of generating the power onboard by means of auxiliary engines there are available technologies enabling vessels to connect to the local electricity grid. As environmental awareness and concern have grown in the shipping sector and stricter requirements on emissions have been enforced, OPS technology is generating increasing interest amongst ports, ship owners and local communities as a way to mitigate emissions and noise problems. 3.2 The global context To set the scene for an in-depth analysis of the status of OPS in the North Sea Region it is relevant to consider the global context and mention some initiatives in other parts of the world. In the US and Canada several ports have received financial support for OPS investments. Examples include Port of Victoria, Port Hueneme, Los Angeles, Long Beach and Brooklyn. The most proactive proponents for OPS are Los Angeles and Long Beach, which have decided that 90% of all vessels calling the ports must be connected to the onshore grid by 2020. This initiative is linked to the California “At-Berth 8 regulation”2 that will come into force in 2014, which requires certain vessels to dramatically lower their emissions whilst in port. This applies to six Californian ports and require most ships to connect to the onshore grid.3 California is a designated Sulphur Emissions Control Area (SECA), something that has been an important driving force in the deployment of OPS technology in the region. The regulation became effective in 2009 and will during the period 2014-2020 require increasing demands on the number of port calls connecting to shore power and a corresponding reduction in emissions.4 On the east coast of the United States there are also some interesting OPS projects being planned, e.g. in the Florida Port of Everglades (to cater for the Royal Carribean new OASIS-class cruises).5 The government of Canada has provided significant financial support to an OPS investment at the port of Prince Rupert on the west coast that will provide shore power to container ships in the transpacific trade.6 In Asia, the Hong Kong port of Kai Tak has also decided to connect cruise liners to OPS in an effort to lower local emissions.7 There are some examples of bilateral initiatives to promote green shipping routes between select ports on the US west coast and in China. The German federal government is also in talks with Chinese counterparts regarding a green shipping corridor between German ports and Shanghai.8 Individual ports in different regions also have bilateral discussions related to OPS with the aim of improving the chances for ‘shared’ customers to be able to connect to OPS whilst calling these ports. This typically applies to global liner traffic, however it could be extended to parts of the cruise liner business in which ships operate in different regions depending on season.9 A few shipping companies have taken great strides to retrofit their ships to accommodate OPS technology. Examples include the world’s fourth largest container carrier APL that have installed OPS on five container carriers to be connected to the mainland grid in the Port of Oakland10. In the cruise industry there are several cruise line companies which can now connect to onshore power, most of them trading on ports on the US west coast, e.g. Holland America Line, Royal Caribbean International, Celebrity Cruise Lines, Norwegian Cruise Line, and Princess Cruises.11 Regarding newbuilt ships, it is now becoming increasingly common that container vessels over 6000 TEUs are equipped with OPS technology. To understand the complexity surrounding OPS investments it makes sense to briefly describe the different stakeholders and their type and level of influence. Note that the below is a generic mapping of stakeholders and the situation in individual ports vary greatly due to size, location, type of traffic and political framework. 3.3.1 Legislative and political level In southern Europe there are several OPS projects being planned. In Genoa, Italy, there will be a high voltage installation for ferry and cruise traffic and possibly also for a container terminal. In Barcelona, Spain, OPS for ferry traffic is being planned.12 3.3 Stakeholders Although OPS is an established technology and has been in use since the early 1980’s13 there are a number of issues that have prevented the widespread deployment of OPS. One key factor is the large number of stakeholders that in one way or other influence OPS investment decisions. For any investment to be successful all relevant actors in a given location need to be involved and find a way to cooperate. They must agree on a compatible technology and construct a viable business model for the site-specific OPS installation. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. Intergovernmental organisations: develop policy and enforce regulations regarding e.g. sulphur content of ship fuel. They can also provide incentives for OPS through promoting sector cooperation and grants. Examples include the International Maritime Organisation (IMO) and the European Union. 2. National governments: policy development and legislative power. Governments has the power of the “stick”, e.g. forcing ports to provide OPS through environmental court decisions, but may also provide incentives for investments such as tax reductions for ports and ship owners utilising the technology. 3. Regional authorities: may exercise direct or indirect influence on OPS e.g. through developing regional transport and logistics plans and coordinating stakeholders in a given region.14 Regional authorities could also provide financial means to support OPS installations.15 California Senate Bill No. 234. Legiscan website: www.legiscan.com (accessed on 2013-04-28) The US Environmental Protection Agency (EPA) is expected to grant a waiver releasing the regulation from federal jurisdiction, placing it under the authority of the state. 2014-2016 50% of a fleet’s calls must be connected to shore power, 2017-2019 this figure is raised to 70% and by 2020 this impacts on 80% of fleet calls. This effects 28 terminal operators and 57 fleets. Source: Californian Environmental Protection Agency – Air Resources Board. Bankes-Hughes, L. “Iron age – spotlight on cold ironing”, Bunkerspot Aug/Sept. 2009, www.petrospot.com World Port Climate Initiative, www.onshorepowersupply.org Paggie Leung. “Cruise ships to get on-shore power supply.” South China Morning Post, 19 July 2012. www.scmp.com. Suzana Fistric, meeting at Hamburg State Ministry, 21 March 2013: Discussions between the German federal government and Chinese authorities have been initiated but are still at a very early stage. One such example is the ports of Stockholm and Barcelona. World Port Climate Initiative, www.onshorepowersupply.org They have all been awarded the Port of Seattle’s “Green Gateway Partner Award”. www.cruiseforward.org Luciano Corbetta, Cavotec, cited in CNSS presentation 22 November 2011. www.cnss.no In 1984 the port authorities in Stockholm installed a low voltage OPS system for the Viking Line ferry. This system is still in use. Interview with Thomas Ney, Region Skåne in south Sweden, 2013-03-18 The Länder government in Hamburg is actively involved in the plans to provide OPS for cruise ships in the port of Hamburg. 9 ONSHORE POWER SUPPLY (OPS) SURVEY 4. Municipalities: as the majority of ports in the North Sea region are municipally owned16, local government (civil servants and politicians) may exercise direct or indirect influence on OPS investment decisions in ports. In some cases municipalities have co-financed installations.17 5. Sector organisations, industry associations and NGO’s: at European and national level these may exercise significant pressure on authorities on issues directly or indirectly concerning OPS. The European Seaports Organisation (ESPO) and European Community Shipowners’ Assocation (ECSA) have for example responded to the European Commission’s revision proposal regarding the taxation of the electricity consumed by means of OPS.18 International NGOs like Friends of the Earth or national counterparts such as German NABU are known to have influenced the public debate about ship emissions. 3.3.2 Sector specific stakeholders 1. Port authorities: ports are by default directly involved in any decision to install OPS as this has a direct impact on port infrastructure, operations and commercial relations with clients. 2. Ship owners: ship owners are maybe the most important stakeholder of all since they to a large extent stand for the market driven ‘demand’ for OPS. Unless ship owners are willing to invest in OPS, any investment in new port infrastructure is pointless. 3. Grid owners and power companies: a prerequisite for any OPS installation is that a sufficient grid infrastructure is in place. Depending on the power requirements in the port the grid company may need to improve transmission capacity locally, especially for OPS installations aimed at large vessels.19 16 17 18 19 20 21 10 4. OPS technology suppliers: companies such as ABB, Siemens, Schneider Electric and Cavotec have to design products and related services to suit the requirements of the ports and ship owners. They have an important role to play in the development of industry standards, which are key to any widespread deployment of OPS technology. 5. Ship engine suppliers and technical service companies: as some technical adjustments are necessary onboard ships that install OPS systems, engine suppliers must work in tandem with OPS technology suppliers to ensure power management system compatibility and resolve technical issues that may arise. 3.3.3 Commercial stakeholders 1. Investors: decisions to invest in OPS may be of central or peripheral importance to investors and financial institutions depending on the size and scale of the investment as well as the possible impact on other parts of the business. For a company with high ambitions to have an environmentally friendly profile, a decision to invest in OPS may be an important tool in strengthening the company brand.20 2. The logistics supply chain: the myriad of stakeholders (ultimately exemplified by endconsumers globally) indirectly influence OPS investment decisions by setting the commercial framework conditions for any ship owner or port involved in the transportation of goods and passengers. Corporate Social Responsibility (CSR) issues may also come into play at various points in the supply chain, putting pressure on ship owners and ports to provide environmentally friendly solutions.21 In Denmark the state owns or co-owns (as in the case of e.g. Copenhagen port) many ports. Examples include Stockholm and Hamburg ESPO “Position paper on the taxation of electricity provided through Onshore Power Supply (OPS) systems” 2010-03-30. www.espo.be Interview Bengt-Olof Jansson, CMP, 2013-03-27: Copenhagen-Malmö Port Authority has investigated the possibility of providing OPS in central Copenhagen, which is a popular destination for cruise liners. Cruise liners such as Holland-America line for example are keen to appeal to environmentally aware customers and provide extensive information about their work to lower fuel consumption, e.g. through OPS. Holland-America Line Sustainability Report 2009. www.nxtbook.com. One such example is the forestry company Stora Enso, which has greatly influenced the ship owner Transatlantic’s decision to retrofit part of its fleet to enable shore power connection. Port authorities Ship owners Investors and financial institutions Regional authorities & municipalities Grid owners and power companies OPS technology suppliers Ship engine suppliers authorities Sector organisations and NGOs (lobbying) Intergovernment al organisations The logistics supply chain National governments, incl. legal 3.4 OPS General policy framework on OPS 3.4.1 Introduction In this section we aim to describe the main stakeholders shaping the policy landscape that in one way or other, and to varying degrees, influence ports’ and ship owners’ ability and willingness to invest in OPS in the North Sea Region. Organisation (IMO) and the European Union (EU) influence developments through policy decisions e.g. implementing more stringent regulations regarding the sulphur content levels in ship fuel. International organisations also have an important role to play in promoting joint technical standards and fostering closer cooperation amongst ports and ship owners internationally. 3.4.2 International At the macro level, intergovernmental and international sector organisations like the International Maritime To a limited extent (so far) such organisations have also promoted deployment by offering grants and subsidies to ports and ship owners. 11 ONSHORE POWER SUPPLY (OPS) SURVEY International Maritime Organisation (IMO) The IMO is the United Nations specialised agency with responsibility for the safety and security of shipping and the prevention of marine pollution by ships. IMO is the source of approximately 60 legal instruments that guide the regulatory development of its member states to improve safety at sea, facilitate trade among seafaring states and protect the maritime environment. MARPOL Annex VI is the most powerful instrument emanating from the IMO, with the aim of limiting the main air pollutants contained in ships exhaust gas.22 In 2008 the Marine Environment Protection Committee of the International Maritime Organisation, IMO, unanimously adopted the revised Annex VI, Prevention of Air Pollution from Ships, to the MARPOL 73/78 Convention. The Annex sets limits on nitrogen oxide and sulphur oxide emissions from ship exhausts. Low sulphur fuel also reduces particulate emissions from ships. The new Annex entered into force on 1 July 2010. The highest sulphur content allowed in ship fuel was reduced globally as of 2012 from 4.5% to 3.5% and as of 2020 to 0.5%. Sulphur content allowed in Sulphur Emission Control Areas (SECAs) that currently include the Baltic Sea, the North Sea and the English Channel, decreased in 2010 from 1.5% to 1.0% and will decrease further to 0.1% in 2015.23 Regarding energy efficiency of ships MARPOL VI have introduced two important instruments that are relevant in regard to OPS. The Energy Efficiency Design Index (EEDI) was made mandatory for new ships and the Ship Energy Efficiency Management Plan (SEEMP) for all ships at the Marine Environment Protection Committee (MEPC) 62 in July 2011.24 This was the first legally binding climate change treaty to be adopted since the Kyoto Protocol. The EEDI is the most important technical measure and it aims at promoting the use of more energy efficient (and less polluting) equipment and engines. The EEDI requires a minimum energy efficiency level per capacity mile (e.g. tonne mile) for different ship type and size segments From 2013 the level is to be tightened incrementally every five years, and so the EEDI is expected to stimulate continued innovation and technical development of all the components influencing the fuel efficiency of a ship from its design phase. The EEDI is 12 a non-prescriptive, performance-based mechanism that leaves the choice of technologies to use in a specific ship design to the industry. As long as the required energy efficiency level is attained, ship designers and builders are free to use the most costefficient solutions for the ship to comply with the regulations.25 The EEDI is developed for the largest and most energy intensive segments of the world merchant fleet and will embrace 72% of emissions from new ships covering the following ship types: oil tankers, bulk carriers, gas carriers, general cargo, container ships, refrigerated cargo and combination carriers. For ship types not covered by the current formula, suitable formulas are expected to be developed in the future addressing the largest emitters first.26 The other IMO initiative, SEEMP, is an operational measure that establishes a mechanism to improve the energy efficiency of a ship in a cost-effective manner. The SEEMP also provides an approach for shipping companies to manage ship and fleet efficiency performance over time using, for example, the Energy Efficiency Operational Indicator (EEOI) as a monitoring tool. The guidance on the development of the SEEMP for new and existing ships incorporates best practices for fuel efficient ship operation, as well as guidelines for voluntary use of the EEOI for new and existing ships.27 The progressive reduction of fuel sulphur content levels impacts directly on the commercial viability of OPS as the price for electricity generated onshore will seriously compete with that of low-sulphur auxiliary fuel. World Port Climate Initiative (WPCI) The WPCI, linked to the International Association of Ports and Harbors (IAPH), works to raise awareness in the port and maritime community of the need for action to reduce GHG emissions and improve air quality. WPCI has a special working group working to promote knowledge exchange in the maritime community regarding OPS issues. They have created a website where information and news about OPS-related matters are posted, with the purpose of sharing best practice and promoting the deployment of the technology.28 3.4.3 European port and shipping stakeholders Before going on to describe the multifaceted policy framework of the European Union, the primary shipping-specific European lobbying organisations should be mentioned. These serve as the ports’ and the ship owners’ respective spokespersons, which closely follow and try to influence developments in the European policy making framework that impacts on their constituent national member organisations. European Sea Ports Organisation (ESPO) The European Sea Ports Organisation was founded in 1993. It represents the port authorities, port associations and port administrations of the seaports of the Member States of the European Union and Norway. ESPO also has observer members in several neighbouring countries to the EU.29 The EcoPorts initiative, under the ESPO umbrella, supports sound environmental management in European ports. ESPO/Ecoports have developed two important tools that ports can use to improve their environmental standards. Firstly, there is the Self Diagnosis Method (SDM), a methodology for identifying environmental risk and establishing priorities for action and compliance. SDM is a concise checklist against which port managers can self-assess the environmental management 22 23 24 25 26 27 28 29 30 31 32 programme of the port in relation to the performance of both the European port sector and international standards.30 Secondly, the Port Environmental Review System (PERS) has, according to ESPO, firmly established its reputation as the only port-sector specific environmental management standard. PERS stems from work carried out by the ports themselves and it is specifically designed to assist port authorities with the functional organisation necessary to deliver the goals of sustainable development. While incorporating the main generic requirements of recognised environmental management standards (e.g. ISO 14001), PERS is adapted to deliver effective port environmental management and its implementation can be independently certified.31 In addition to the above tools ESPO published a new “Green Guide ” in October 2012, which provides a full revision and update of the ESPO Environmental Code of Practice. In line with ESPOs vision on sustainability, the Guide introduces a common framework for action under ”Five Es”, i.e. ”Exemplify”, ”Enable”, ”Encourage”, ”Engage” and ”Enforce”. This action framework is applied to five selected environmental issues: air quality, energy conservation and climate change, noise management, waste management and water management. The Guide encourages ports to be responsible for their own initiatives, to benchmark their performance, and to deliver science-based evidence of achievements.32 For an in-depth analysis of this area, see “Policies and Instruments – A baseline of Knowledge”. Report 1 CNSS project, February 2012. Dr. Ash Sinha and Dr Martyn Lightfoot (eds). Marpol revised Annex VI. with the adoption of amendments to MARPOL Annex VI (resolution MEPC.203(62)), by Parties to MARPOL Annex VI. Source: http://www.imo.org The CO2 reduction level (grams of CO2 per tonne mile) for the first phase is set to 10% and will be tightened every five years to keep pace with technological developments of new efficiency and reduction measures. Reduction rates have been established until the period 2025 to 2030 when a 30% reduction is mandated for applicable ship types calculated from a reference line representing the average efficiency for ships built between 2000 and 2010. (Source: Ibid) www.imo.org Ibid World Port Climate Initiative. www.onshorepowersupply.org European Seaports Organisation, www.espo.be Ibid Ibid www.espo.be 13 ONSHORE POWER SUPPLY (OPS) SURVEY In principle, ESPO is supportive of OPS and regard it as one of several interesting technologies that may contribute to a greener shipping sector. However, they firmly believe that decisions whether to invest in OPS must lie with individual ports and not be forced through by EU or national legislation.33 In November 2013 the Transport Committee of the European Parliament voted in favour of a report an important Commission proposal on a Directive on the Deployment of alternative fuel infrastructure. ESPO is positive to the proposal in regard to its provisions for LNG infrastructure. In regard to OPS however, ESPO is critical to the introduction of a strict obligation for all core TEN-T ports to provide shore side electricity to vessels requiring more than 1 MVA in berths located within 3 km of residential areas, arguing that “shore side electricity is not a one-size-fits-all type of solution and should therefore not be imposed horizontally. It should be promoted where and insofar it is beneficial for the environment and cost effective”.34 European Community Shipowners’ Association (ECSA) Another influential European stakeholder is ECSA, which represent the national shipowner associations of the EU countries and Norway. ECSA works through a permanent secretariat in Brussels and a Board of Directors, as well as a number of specialised committees. Its aim is to ”promote the interests of European shipping so that the industry can best serve European and international trade and commerce in a competitive free enterprise environment to the benefit of shippers and consumers”35. Sometimes ECSA joins forces with ESPO in lobbying efforts aimed at the EU Commission, as was the case with the revision of the EU tax Directive, which has bearing on OPS.36 European Association of Electricity Transmission and Distribution Equipment and Services Industry This organisation representing industry stakeholders like ABB, Schneider Electric, Alstom and Siemens, is actively working to promote the use of OPS and has a 14 task force specifically working on this issue. They have been instrumental in developing the global standard for OPS. Another example of their involvement is a position paper regarding the European Directive of Alternative Fuels (see more below). 3.4.4 Non-Governmental Organisations (NGOs) NGOs have an important role to play in shaping policy at all levels, from the international level down to local level. In the environmental arena particularly, there are a large number of NGOs putting pressure on governments and authorities to promote sustainable development. In the multi-level governance model of democratic societies there are often a large number of stakeholders involved in shaping policies, some more influential than others. It is often difficult to obtain verifiable facts about lobbying activities and their real impact and this is also true in the case of NGOs’ possible influence in regard to OPS. The Clean Shipping Coalition (CSC), which was granted observer status to the IMO in 201037, claims to be the only global international environmental organisation that focuses exclusively on shipping issues. It is based in Brussels and represents several other environmental NGOs including the Bellona Foundation, Transport & Environment and the North Sea Foundation. In the United States, Friends of the Earth is an influential NGO that are closely monitoring the environmental performance of cruise ships through its ”Cruise Report Card”, which ranks cruise operators and individual vessels on air pollution, sewage treatment and water quality compliance. In regard to air pollution only vessels which are able to connect to shore side power can get the top rating.38 In Brussels, environmental groups are often well organised and strategically lobby the European Commission and Parliament. Different NGOs often work in tandem to present a stronger voice towards policy makers. The Green1039 group is an excellent example and their constituent organisations have over 20 million followers. In the North Sea area there are several NGOs that are actively in favour of OPS solutions. For example, the Bellona Foundation based in Norway (but with representation also in Russia and Brussels) has been instrumental in supporting the OPS solution in Oslo. Bellona has been involved in identifying sources of funding for the project liaising closely with Color Line, Port of Oslo and the grid company Hafslund Nett.40 In Germany NABO, an environmental NGO with a membership base of about 450 00041 has been vociferous in their demands for cleaner air in ports and for example, they have recently focused their attention on the growing cruise trade in Hamburg.42 3.4.5 The European Union (EU) 3.4.5.1 Introduction The EU is a key stakeholder that has the power to significantly change the market conditions for the shipping sector. Any analysis of specific EU policies providing incentives or creating opportunities for OPS should be viewed in the context of the complex policy making environment of the EU. There are a number of policy areas that directly or indirectly influence the shipping sector. Examples include energy, environment (the 2020-20-20 climate goals), transport, 33 34 35 36 37 38 39 40 41 42 43 44 45 46 international trade and taxation. The EU is an important public stakeholder that has a stake in the development of OPS in Europe. It holds legislative power over member states and also has the financial means to support investment in OPS. The European Commission’s Directorate General for Mobility and Transport (MOVE) would like to see more OPS investments made in Europe. The Directorate General for the Environment is also in favour of OPS43. In the policy negotiations surrounding the EU Strategy on Alternative Fuels and the work leading up to the EU commission Directive proposal44, DG Environment was in favour of making OPS infrastructure mandatory in ports45, but in the working document from the Commission to the Parliament there was originally only one reference to OPS: “Shore-side electricity facilities can serve maritime and inland waterway transport as clean power supply, in particular in maritime and inland navigation ports where air quality or noise levels are poor”.46 However, during the consultation process in the European Parliament (EP) of this Directive proposal, important amendments have been suggested to Article 4.4. In November 2013 the EP Transport Committee voted in favour of the following text: Interview with Antonis Michail, Sustainability Manager, ESPO, 2013-04-08 ESPO position paper on the deployment of alternative fuels infrastructure. 2013-11-12 European Community Shipowners Association, www.ecsa.eu E.g. in regard to the revision of the EU tax Directive. www.espo.be. Clean Shipping Coalition, www.cleanshipping.org Friends of the earth, www.foe.org Green10 consists of the following environmental NGOs: Birdlife Europe, CEE Bankwatch Network, Climate Action Network Europe, European Environment Bureau, Transport and Environment, Health and Environment Alliance, Friends of the Earth Europe, Greenpeace, Naturefriends International, WWF European Policy Office. www.green10.org. Bellona, www.bellona.no NABU (Nature and Biodiversity Conservation Union), www.nabu.de A workshop on this topic was organised in February 2013, in which the issue of OPS was one of the topics of discussion. www.nabu.de. DG MOVE has more detailed and technical knowledge in regard to OPS and conditions in the shipping sector, whereas the main concern for DG Environment is environmental matters. (Opinion expressed by Antonis Michail, Sustainability Manager at ESPO). European Commission, “Proposal for a Directive on the deployment of alternative fuels infrastructure”, 2013/0012 (COD), 24 January 2013, www.eur-lex.europa.eu Interview with Frederik Neuwahl, DG Environment, EU Commission 2013-04-17 European Commission, “Proposal for a Directive on the deployment of alternative fuels infrastructure”, 2013/0012 (COD), 24 January 2013, www.eur-lex.europa.eu 15 ONSHORE POWER SUPPLY (OPS) SURVEY “Member States, in close cooperation with regional and local authorities, the managing bodies of the ports and the industry concerned, shall ensure that shore side electricity supply for waterborne vesselsrequiring more than 1 MVA is installed inberths of ports of the TEN-T Core Network located within 3 km of residential and commercial areas, by 31 December 2020. This requirement shall also apply to cruise and ferry terminals not included in the TEN-T Core Network, unless their managing bodies demonstrate lack of cost-effectiveness or absence of significant environmental benefits.” Article 4.5 also makes an important point about standards:”Shore-side electricity supply for maritime and inland waterway transport shall comply with the technical specifications set out Annex III.1.3 by 31 December 2015 at the latest.” The plenary vote in the European Parliament on the adopted report is scheduled to take place in February 2014. These recent developments show that the European institutions are confident in the OPS technology, and have realised that regulation is required to promote further deployment. 3.4.5.2 Background on OPS in the EU context The Commission issued a Recommendation in 2006 “on the promotion of shore-side electricity for use by ships at berth in Community ports”.47 Although EU Recommendations are non-binding instruments in the EU legal system, the 2006 Recommendation clearly states the Commission’s opinion in regard to the technology: “The Commission of the European Communities hereby recommends: 1. Member States should consider the installation of shore-side electricity for use by ships at berth in ports; particularly in ports where air quality limit values are exceeded or where public concern is expressed about high levels of noise nuisance, and especially in berths situated near residential areas. 16 2. Member States should take note of the advice, set out in the Annex, on the cost-effectiveness and practicality of using shore-side electricity to reduce emissions for different types of ships, routes and ports. Nevertheless, the environmental benefits and cost-effectiveness should be evaluated on a case by case basis. 3. Member States should work within the International Maritime Organization (IMO), in the context of the ongoing review of the International Convention for the Prevention of Pollution from Ships (MARPOL Convention), to promote the development of harmonised international standards for shore-side electrical connections, taking into account ongoing work. Member States should consider offering economic incentives to operators to use shore-side electricity provided to ships, taking advantage of the possibilities set out in Community legislation. 5. Member States should promote awareness of shoreside electricity among local authorities whose responsibility includes port areas, maritime authorities, port authorities, classification societies and industry associations. 6. Member States should encourage port authorities and industry to exchange best practice concerning shore-side electricity supply and harmonising procedures for this service. 7. Member States should report to the Commission on the action they intend to take to reduce ship emissions in ports, particularly where air quality limit values are exceeded.” In addition, under EU Directive 2005/33 the use of 0.1 % sulphur by weight for marine fuels used by ships at berth in Community ports became mandatory as of 1 January, 2010. The Directive allows OPS as an alternative.48 3.4.5.3 Financial support The European Commission has so far provided significant financial support to a limited number of OPS projects, in the framework of the TransEuropeanNetworks-Transport (TEN-T) programme. “TEN-T Priority Project 21 Motorways of the Sea (MoS) builds on the EU’s “2020-goal” of achieving a clean, safe and efficient transport system by transforming shipping into a genuine alternative to overcrowded land transport. The MoS concept aims at introducing new intermodal maritime logistics chains to bring about a structural change to transport organisation”.49 One recent example from the programme is the project “Onshore Power Supply – an integrated North Sea Network”, which offered to co-fund OPS installations in three DFDS freight ferry terminals for three DFDS freight ferries (Ro-Ro vessels).50 Due to high investment costs for other SECA compliance technologies, i.e. scrubbers and selective catalytic reduction (SCR) however, DFDS chose to postpone its plans for OPS.51 Another TEN-T project, also co-financed by the European Cohesion fund, is the Baltic Link GdyniaKarlskrona, through which Stena Line has received financial support for an OPS installation.52 The Commission has confirmed that there is, and there will be also in future, money available to support OPS investment.53 In the 2012 TEN-T call for proposals the budgetary allocation was €350M. Normally projects are co-funded by the EU with between 10-20% whilst the 47 48 49 50 51 52 53 54 55 rest of the funding must come from other sources (most likely ports, ship owners, and national or municipal authorities). The new TEN-T programme for the EU budgetary period 2014-2020, has undergone significant structural change since the last period and is part of the Connecting Europe Facility (CEF), including measures in transport, energy and digital networks. The new budget for the period is €26,3 billion. In a statement from November 2013 the Commission says that ”the new policy establishes, for the first time, a core transport network built on nine major corridors: 2 North–South corridors, 3 East–West corridors; and 4 diagonal corridors. The core network will transform East–West connections, remove bottlenecks, upgrade infrastructure and streamline cross-border transport operations for passengers and businesses throughout the EU. It will improve connections between different modes of transport and contribute to the EU's climate change objectives. The core network is to be completed by 2030”.54 Under the Commission Implementing Decision of 23.11.201255 OPS is mentioned as an area eligible for EU financial support: ”Under this sub-priority, the objective is to support the development of ports as efficient entry and exit points fully integrated with the land infrastructure. Only category A ports are eligible under this work programme. Projects to be selected under this priority will concern works and should be in line with Article 12 of the TEN-T Guidelines”. European Commission, “Commission Recommendation of 8 May 2006 on the promotion of shore-side electricity for use by ships at berth in Community ports, 2006/339/EC”, www.eur-lex.europa.eu World Port Climate Initiative, www.onshorepowersupply.org European Commission, DG Mobility and Transport, “Annual Report of the Coordinator - Priority Project 21, Motorways of the Sea, TransEuropean transport network,” www.ec.europa.eu European Commission, Project description: “On Shore Power Supply - an integrated North Sea network, 2011-EU-21002-P” www.tentea.ec.europa.eu Interview with Gert Jakobsen, DFDS 2013-12-02 European Commission, Project description: “Baltic Link Gdynia-Karlskrona 2009-EU-21010-P”, www.tentea.ec.europa.eu Interview, Pieter de Meyer, European Commission, DG Mobility and Transport http://ec.europa.eu/commission_2010-2014/kallas/headlines/news/2013/11/cef_en.htm Amending Commission Implementing Decision C(2012) 1579 of 14 March 2012 on the adoption of a financing decision for granting financial aid in the field of the trans-European transport network (TEN-T) for 2012, as already amended by Commission Implementin g Decision C(2012)6902 of 5 October 2012 17 ONSHORE POWER SUPPLY (OPS) SURVEY One of the priority topics under this heading reads: ”Port facilities improving the environmental performance of maritime transport: LNG facilities, including barges, enabling publicly accessible bunkering operations in ports, shore-side and alternative, for instance external, electricity facilities in ports, enabling ships when berthed to be connected to onshore power supply and reception facilities for oil and other waste, including residues from scrubbers, to meet environmental requirements.” In the new revised TEN-T Directive it is also proposed that ports that want to obtain or maintain their position as a priority port for TEN-T will have to provide alternative fuel infrastructure by 2020.56 In a key EU Commission implementing decision from November 2012 onshore power is mentioned. In Art.25.3 it is stated that “projects of common interest for motorways of the sea in the trans-European transport network may also include activites that have wider benefits and are not linked to specific ports such as services and actions to support the mobility of persons and goods activites for improving environmental performance, such as the provision of shore side electricity that would help ships reduce their emissions….” It is further mentioned in Art. 39 under the heading “new technologies and innovation”, that “in order for the comprehensive network to keep up with innovative technological developments and deployments, the aim shall be in particular to ….enable the decarbonisation of all modes of transport modes by stimulating energy efficiency as well as the introduction of alternative propulsion systems, including electricity supply systems and the provision of corresponding infrastructure.”57 3.4.5.4 Tax exemptions Member states are discussing the possibility of introducing tax exemptions for the electricity provided to seagoing vessels through OPS in the context of the revision of the EU Directive on energy and electricity taxation (2003/96/EC).58 Currently, member states have different energy taxes and it is believed that a 18 harmonisation of taxes will lead to a better functioning internal energy market. The revision of this Directive implies a complex policy process involving a large number of sectors and issues and in this context OPS is a relatively minor issue. ESPO and ECSA have in a joint position paper expressed the support for a tax exemption for electricity for vessels generated onshore (irrespective of origin) to boost the industry’s ability to invest in OPS.59 They indicate that the competitive position for onshore power supply against using auxiliary fuels onboard is currently negatively impacted by the fact that maritime fuels are not subject to excise duties.60 On the topic of tax breaks, ESPO thinks the Swedish61 and German models for supporting OPS through the tax route is interesting and would like to see more countries adopt similar systems.62 3.4.5.5 Mandatory OPS? The European Commission has been concerned by the slow uptake of OPS technology in the shipping community, despite the Recommendations issued in 2006 (see above) to improve air quality in ports by means of OPS. The Commission has since reiterated the recommendation in the EU Maritime Transport Strategy to 2018. The Commission will “promote alternative fuel solutions in ports, such as the use of shore-side electricity. The Commission will propose a time-limited tax exemption for shore-side electricity in the forthcoming review of the Energy Taxation Directive as a first step and elaborate a comprehensive incentive and regulatory framework”.63 The recent progress in regard to the European Directive for Alternative Fuels (see above), which still have to obtain final approval in the European Parliament, is a significant step towards mandatory OPS. This places an obligation on member states to “ensure that shore side electricity supply for waterborne vessels is installed in berths within 3 km of residential/living and shopping/commercial areas for ships requiring more than 1 MVA, and in all cruise ships and ferry terminals, by 31 December 2020 at the latest.” Trans-European Seaport network64 56 57 58 59 60 61 62 63 64 Interview with Pieter de Meyer, European Commission, DG MOVE, 2013-04-23 European Commission, “C(2012) 8508 final Commission Implementing Decision of 27.11.2012 amending Commission Implementing Decision C(2012) 1574 of 15 March 2012 establishing a multi-annual work programme 2012 for grants in the field of trans-European Transport Network (TEN-T) for the period 2007-2013”, www.europa.eu World Port Climate Initiative, www.ops.wpci.nl ESPO, www.espo.be World Port Climate Initiative, www.ops.wpci.nl Council Implementing Decision of 20 June 2011 authorising Sweden to apply a reduced rate of electricity tax to electricity directly provided to vessels at berth in a port ("shore-side electricity") in accordance with Article 19 of Directive 2003/96/EC (2011/384/EU) Interview with Antonis Michail, Sustainability Manager, ESPO, 2013-04-08 European Commission, “Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Strategic goals and recommendations for the EU’s maritime transport policy until 2018 /* COM/2009/0008 final”, www.eur-lex.europa.eu www.safety4sea.com/images/media/kar/TENT-T 19 ONSHORE POWER SUPPLY (OPS) SURVEY 3.4.5.6. SECAs and CO2 reductions The European Union is an important stakeholder in global negotiations, including in maritime affairs. Although the EU is not a full member of the IMO, this does not prevent the EU from significantly influencing the international decision-making process for preventing vessel-source pollution.65 One issue working against a widespread deployment of OPS in the North Sea region is the uneven commercial competition in the shipping sector between north and south Europe. Due to the SECA in force in northern Europe, shipping companies and ports there are put at a commercial disatvantage towards competitors trading in sourthern Europe. This market distortion prevents progress towards cleaner shipping technologies that currently often imply significant capital costs for shipping companies and ports. Through improved EU coordination of member states’ intervention in IMO negotiations, the EU has an important role to play in promoting more equal trading terms, which indirectly would make it easier to enforce tougher environmental regulation on the sector. If the EU is serious about preventing global warming, it should also promote the idea of putting CO2 limits on the global shipping industry, which currently is exempt from many of the emission controls that apply to onshore transport. One interesting idea that should be discussed would be to enforce CO2 quotas on all ships calling European ports. Such a bold initiative would probably work in favour of more widespread OPS deployment in Europe, and would also set an example to follow for other regions in the world. Baltic states in the early 1990s, intergovernmental, sectoral and NGO cooperation focused on the marine environment in the Baltic Sea has been intense. The Baltic Sea is in many ways a very sensitive eco system with enormous environmental problems and this has called for urgent environmental policy measures across the region. The EU has supported a number of intiatives to promote greener shipping, including OPS. Projects include Clean Baltic Sea Shipping and New Hansa of Sustainable Ports and Cities.67 Within regions there is also bilateral co-operation between individual stakeholders, e.g. Stockholm has liaised closely with Helsinki regarding the OPS installation catering for the needs of the Viking Line ferry. 3.4.7 National level At national level governments have the power to promote OPS deployment with punitive measures or incentives and subsidies. In the North Sea Region, there is great variation in terms of government68 involvement and proactivity regarding the OPS issue. In the region, Sweden, Germany and Norway are leading the way in this regard. 3.4.7.1 Incentives Sweden and Germany have both implemented tax reductions on the onshore-generated electricity used by ships in order to improve the commercial incentive for ship owners to invest in OPS technology. Both countries have received a temporary permission by the EU Commission69 to support the industry this way. In Norway, public stakeholders have been instrumental in providing financial support to the OPS installation now in place in Oslo. 3.4.6 Regional level In northern Europe there are several initiatives aimed at strengthening cooperation regarding sustainable shipping in general and many projects include OPS elements. One example in the North Sea Region is the Clean North Sea Shipping project66, of which this report is a result. Since the collapse of communism in the 20 3.4.7.2 Legal framework The strict environmental legislation in Sweden has in several instances, through the environmental courts, required ports to provide OPS installations (or to prepare for such technology to meet potential future demand). The environmental permitting process has for example played a significant role in the OPS installations in Stockholm, Gothenburg, Ystad and Trelleborg. In legal terms ports have no right of disposition over ship owners (i.e. ports cannot force ship owners to install invest in OPS). There are of course differences between specific provisions in national legislation. However any stakeholder investing in OPS must comply with laws in a number of areas, including regulations regarding: − − − − − − − − building standards public procurement electrical installations working environment handling of hazardous and incendiary materials pollution control other environmental considerations natural habitats 3.4.8 Sub-national level At sub-national, regional level the Länder government of the City of Hamburg70 stands out as the most proactive stakeholder in the North Sea area. It is liaising closely with the Hamburg Port Authority and the cruise provider AIDA to install OPS at the Hamburg Altona cruise terminal. Regional stakeholders has the potential of being much more active in promoting OPS as these often have responsiblity for regional transport and logistics planning. Since OPS is such a complex issue involving a large number of stakeholders regional stakeholders could potentially provide much-needed support in coordinating efforts in individual municipalities and 65 66 67 68 69 70 71 72 ports. 71 3.4.9 Municipal level As the great majority of ports in the North Sea area are municipally owned, local authorites are often directly or indirectly involved in ports’ decision about infrastructure investments like OPS. Any major investment issues must be approved by the port’s board in which the municipality has significant decision-making power. As local air and noise pollution is the primary problem OPS is designed to alleviate, the rationale for investment is naturally closely linked to the local conditions around the port. It is important to remember that the role of the port in individual cities varies greatly depending on size, type of traffic, environmental impact and importance to the local economy. In Hamburg for example, the port is of huge importance to the local and regional economy due to its size and strategic location. Air pollution is also a great problem in Hamburg, which has prompted action by local authorities in partnership with the port. In Stockholm, the port is also an important source of income for the city, but far from the situation in Hamburg, due to differences in size, traffic type, tonnage etc. A major driving force for Stockholm’s decision to invest in OPS has been linked to vast urban development projects on the land directly adjacent to the port, for which the noise levels in the port is a major problem that needs to be solved.72 Nengye Liu, The Relations between the European Union and the International Maritime Organization: an analysis: Working Paper Annual Legal Research Network Conference 2010 Clean North Sea Shipping, EU-project. ww.cnss.no European Commission, Project description “New Hansa of Sustainable Ports and Cities”, www.bsrinterreg.net Government in its widest sense, i.e. including the public sector (government agencies, legal system, etc.) Normally such government intervention in the market would be in breach of EU competition legislation. Freie und Hansestadt Hamburg Interview, Thomas Ney, Region Skåne, Infrastructure strategist, 2013-03-18. Royal Seaport / Värtan 21 ONSHORE POWER SUPPLY (OPS) SURVEY In some cases the municipality provides financial support to an OPS investment. In 2008 for example the port of Stockholm received a grant from the Stockholm environmental investment initiative (Miljömiljarden) covering about 30% of the OPS investment cost.73 3.4.10 Implementing a successful OPS installation requires close cooperation between the port and the owners of the ships that the system is designed to connect with. In Gothenburg for example the successful implementation of the OPS solution is the result of a fruitful cooperation between Port of Gothenburg, Stena Line and Gothenburg Energy.74 Ports, ship owners and grid companies Ports, ship owners and grid companies are naturally the stakeholders most directly involved in OPS issues as they must physically implement the technology into their infrastructure. Even though there are supplier-customer relationships between ports, ship owners and grid companies, these still need to liaise closely to design a workable solution for all parties involved. Key issues Port Ship Operator • • • • • • • • ROI/utilisation CSR financing commercial door-opener Power supplier availability compatibility OPS demand irregular consumption environmental Local community impact • grid capacity • infrastructure investment • new business segment • interface with regional/national grid Illustration of the main issues relating to OPS, characterised according to a stakeholder perspective. 22 ROI/utilisation CSR financing new business model • infrastructure investment • local political framework • mitigate local emissions • reduce noise levels • influence policy making • enable urban development 3.4.11 Shipping Indices As a part of CNSS project WP375, a review of existing indices has been carried out with identification of loopholes/deficiencies in the scoring system. A sensitivity analysis has been conducted in order to find any uncertainty in the used methodology. regulation, primarily the SECA. The lack of SECA for south Europe puts shipping companies and ports in North Europe at a comparative commercial disadvantage to counterparts in South Europe. Arguably, international insitutions like the EU and IMO should work for an extension of the Emission Control area also to southern Europe to avoid such market distortions preventing environmental progress. The most widely used systems are currently the Environmental Ship Index (ESI) and the Clean Shipping Index (CSI), covering the most environmental indicators. The ambition is to determine which parameter have the greatest influence on final score and why. In addition, one could also argue that there is a need for an EU standard for NOx and PM from shipping (in addition to the IMO Tier III). This would strengthen the case for OPS. The development of shipping indices and their relation to OPS, incentives and effectiveness to encourage greener shipping play an instrumental role in the future. Shipping behaviours do change with specific demands on the market. 3.5 Stakeholders: Summary and conclusion As we have seen, OPS is an issue relevant not only for ports and ship owners who are the actual users of the technology, but also for society at various different levels. The public side has a number of instruments that can be used to promote deployment of OPS in the North Sea Region and further afield, for instance through: − − − − − enforcing tougher environmental legislation provide financial incentives, e.g. tax breaks provide grants for capital investments Level of influence by Shipping Indices promotion and coordination of sectoral cooperation One problem impacting on the shipping community’s willingness to adopt the technology relates to the uneven competition between north and south Europe in regard to the stark differences in environmental 73 74 75 In regard to environmental legislation, another driver that would promote the deployment of OPS and other cleaner shipping technologies, would be the introduction of a CO2 quota for ships calling at European ports. Taking a long-term view, it is very likely that also the shipping industry will be subject to demands for CO2 emission reductions. Taking the perspective of future European competitiveness in the global economy, it would be wise to prepare the European shipping industry for the tougher conditions that undoubtedly will be enforced in the medium to long term. Further, an issue involving all the abovementioned stakeholders, albeit in different ways, is the possibility of making differentiated port dues mandatory and standardised across all EU and EEA ports in the purpose of promoting cleaner shipping practices, including OPS. This would promote deployment of OPS, but requires coordinated leadership at the international, regional, national and local levels. In summary, the extension of the emission control area as well as standardised and compulsory differentiated port fees are both examples of initiatives that would reduce the issues related to the uneven competitive playing field in different parts of Europe, that shipping companies can take advantage of. For this to happen though, the public side must provide the necessary leadership. Interview Ilka Ringdahl, Technical manager, Port of Stockholm. 2013-04-14 Interview, Jan Kärnestedt, Gothenburg Energi (Grid). 2013-04-19 A. Murphy CNSS Report in Workpackage 3, Emission Indices 23 ONSHORE POWER SUPPLY (OPS) SURVEY The EU Commission is clear in its support of OPS technology. This provides a good basis and reference point for nation states, regions and local authorities to drive this development forward. Given the given the uncoordinated and fiercly competitive environment amongst the shipping companies, it is highly unlikely that they will push for OPS deployment on the scale necessary to combat the urgent environmental problems. 3.6 Corporate Social Responsibility (CSR) Corporate Social Responsibility (CSR) is a concept, which does not have a general definition. It is an umbrella term for a concept of operations that companies use to act responsibly. CSR is built upon voluntary basis, and it seeks to go beyond the ethical standards regulated by legislation.76 The European Commission’s definition for responsible business is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” IMO77 issues standards for responsible shipping in regards to the marine environment and other issues. In shipping, the pressure to be cost efficient is extremely high. Shipping companies need to comply with international laws and regulations regarding safety, working conditions and protection of the environment, but the economic pressures on the sector often cause a conflict between the commercial interests and CSR issues. It has been argued that for this reason shipping companies, usually live up to the bare minimum levels of safety, environment and social management required in legislation, e.g. through the 76 77 78 79 24 IMO.78 Increasingly however, customers are now more demanding in regard to a product’s impact on the environment and socially, and this is a trend that also affects shipping, albeit maybe slower than in other sectors. As a study on CSR in shipping companies in the Baltic Sea shows, about 50% of all ship owners in Finland, Sweden and Denmark have CSR-related content on their websites. Many of the larger companies also have downloadable reports containing more detailed information79, which may imply that CSR issues are of relative importance to the business of the company. In regard to OPS, CSR is likely to play a role in ports and ship owners’ investment decisions. However, it is very difficult to validate to what extent CSR is really the major driving force, in comparison to more commercially related priorities. It may be the case that a stakeholder takes an investment decision solely based on commercial grounds, but then realise that there are branding gains to be made by communicating a message that the investment was indeed driven by concerns for the environment. The decision by Aida cruises, a frequent caller to the port of Hamburg, to invest in OPS, is to a large extent driven by CSR considerations. The public opinion in Hamburg has been vociferous in the debate about the high emission levels in Hamburg and the critique has primarily been directed towards the large cruise liners calling the port. Arguably, the cruise industry is responsible for only for a fraction of the emissions emanating from port operations, but the increase in cruise traffic to the city has been more “visible” to the public than other types of traffic (i.e. the ships are very large and the amount of tourists pouring into the city during port calls is significant). During the course of this research, surprisingly little publicly available information activiely communicating a “CSR message” has been found on the websites of the companies that have invested in OPS. Heald, M. (1970). The social responsibilities of business: Company and community,1900-1960. Cleveland, OH: Case Western Reserve University Press. IMO MEPC Marine Environment Protection Committe resolutions. www.imo.org. Arat, L. “Corporate Social Responsibility in Shipping Compnies in the Baltic Sea”, p. 19 Ibid. 4 Overview of available technical solutions What is the technology? 4.1 OPS board. This is typically done while in dry dock but as it is insufficient to power the vessel beyond a limited set of consumers it lacks relevance to the scope of this study.83 4.1.1 Introduction 4.1.3 High voltage connections Historically there has been a number of solutions driven by various actors developing custom made installations to fit their specific needs – the wheel has been invented several times, looking different on each occasion. To be able to supply larger vessels, high voltage connections are preferred. There are some variations, but the most common voltage is 11kV, with 6,6kV as a fairly common second. High voltage allows for smaller diameter cabling and connections, thus more manageable with maintained or increased capacity.84 However, high voltage installations requires more highly trained and/or certified crew to ensure safe and proper handling, and the physical installation is likely to be more bulky as onboard transformers will be larger.85 4.1.2 Low voltage connections Older installations typically involve low voltage (~400V or even ~230V) connections, catering for a fairly simple solution in terms of both shore side and onboard installation, routine handling, etc. Low voltage supply has the upside of being readily available at (or at least close to) most berths already, requiring minimal shore side installation and rarely any upstream grid reinforcement. The most significant drawback is the limited supply capacity of low voltage, effectively restricting the use to vessels that have a relatively low power consumption while in port. Though it has been solved to some extent through multiple cable connections, that too has an upper limit mainly caused by handling issues.81 Today, this type of connection is widely used for inland and in-port shipping such as barges, tugs, working vessels etc. where the low capacity is sufficient (Rotterdam/Wallhamn/Svitzer), but rarely beyond that. However, for example Viking Line in both Stockholm and Helsinki continuously connect their vessels to low voltage OPS, which apparently is both sufficient and operationally manageable.82 It is worth mentioning that most vessels are quite easily connected to low voltage supply via the emergency 80 81 82 83 85 86 4.1.4 Frequency One recurring challenge for OPS installation is that there are two standard frequencies for AC voltage on vessels; 50 and 60 Hz. Globally, both frequencies exist in major power grids, where 230V/50Hz (e.g. Europe) and 110V/60Hz (e.g. US) are the typical combinations.86 This is mainly a concern for electrical motors in fans, pumps etc, as all AC motors require to be supplied with the frequency to which they are built. Simpler applications however, such as lights and heating, remain unaffected. It is easy enough to convert from one frequency to the other without any major loss, however aside from the investment involved the components are both bulky and heavy. As a result, ports aiming to accommodate vessels of both standards often decide to incorporate frequency conversion ability in the shore-side installation, rather than relying on the vessels to carry that equipment onboard. There are however examples Interview with lka Ringdahl (Technical manager) at Port of Stockholm, 2013-03-14 Interview with Ingemar Sörensson, Ship Management at Stena Line Scandinavia, 2013-04-02 Interviews with Gun Rudeberg (Head of Environmental Affairs) and Ilka Ringdahl (Technical manager) at Port of Stockholm, 2013-03-14 and 2013-04-03. Josefine Lundgren, Technical Superintendent, Maersk Tankers 2013-03-19 Interview with Ingemar Gustavsson, VD Processkontroll Elektriska, 2013-03-13 Ken Dorn Hansen, Fleet group manager, Maersk Tankers 2013-03-19 25 ONSHORE POWER SUPPLY (OPS) SURVEY of both situations, as with Ystad where owners have decided to include a frequency converter in the shoreside installation, wheras Trelleborg has decided not to. This can also be applied to a situation where the ship owner and terminal owner are the same, like for example in the case of Stena Line.87 4.1.5 Grid issues The impact of any OPS installment on the grid ultimately depends on the type of vessel and the time it spends at berth. According to information quoted on the WPCI website, cruise vessels may require up to 16 MVA, container vessels up to 6,5 MVA and ferries and RoRO vessels up to 3 MVA load.88 To calculate the energy consumption the power consumption in MW is multiplied with the total time (hours) of consumption. In the majority of cases investigated in the CNSS region, capacity in local and regional grids does not represent any major technical difficulties. Rather than being technically complicated the main issue seems to be the cost-benefit ratio of the cost of grid reinforcements in light of the expected benefits of the OPS installation in question. At a general level, the larger the OPS installation (in terms of installed capacity), the greater the impact on the local and regional power grid. Cruise ships have very high power demands and whilst connected to shore power it may put considerable strain on the grid. Connecting several cruise ships at any one time is not feasible in most places due to the huge investment in grid reinforcements that would be needed. In Copenhagen, which is a major turnaround port for cruise ships, OPS in an inner city location is being considered89 but there are issues around grid capacity.90 Similarly, in Stockholm, which is preparing for OPS for 10 berths suitable for cruise ships, the likelyhood of connecting a large number of ships simultaneously is quite low due to the fixed capacity fee costs involved.91 The location of a port, in relation to the capacity of the regional transmission grid may be problematic if the intended OPS installation is to cater for large power 26 consumers like cruise ships. In the UK, which does not yet have any high voltage OPS intallation in place, there seems to be concern about local/regional grid capacity.92 Gothenburg, which has installed OPS in both the Denmark (2,5 MW) and Germany (3,3 MW) terminals, is in a good location with strong regional 130 kV transmission lines close by. Planning for further OPS installations to cater for e.g. cruiselines in the Arendal part of the port is only a matter of time and cost (estimated to 1MSEK / MW). According to the grid company, reinforcing the grid to allow for more berths does not present any technical challenges, the main issue is whether it is economically feasible to do so.93 In Bergen there has been a discussion about the grid capacity in regard to the planned OPS installations for the Hurtigruten cruise ships, ferry traffic and container vessels calling the port. Looking at the grid in the wider perspective the electricity demand is highest during the winter months and lowest during the warmer season, which is normally the high season for cruise liners trading on North European ports. In the case of Hurtigruten however, they operate year round, which places additional demand on the grid94. Seasonal variations need to be taken into account when planning for OPS installations. 4.2 Other alternatives There are a number of different techniques to reduce a ship’s emissons while at berth, however most lack practical feasibility. One example is to fit vessels with bi-fuel engines where shore supplied gas would be the alternative fuel. Quayside supply of gas will mean less extensive redesigning or refitting of vessels, as the need for storage tanks is eliminated. However, both onboard and shore-side investments are significant. Such systems are currently being developed and tested, but are not yet commercially operational.95 Power Barges A more realistic gas based solution is the power barge concept. The German engineering company Eckelmann Group is developing what they call an LNG e-Power Barge, which is a barge-mounted LNG-driven electricity generator. The idea is to produce electricity cleaner and cheaper than what can be done using a cargo vessel’s own auxiliary engines, in ports where grid capacity is insufficient or a OPS installation would be too complex, extensive or expensive. Running generators on LNG would reduce carbon dioxide emissions significantly, and almost completely reduce nitric- and particle emissions compared to an ordinary diesel generator.96 The initial intention is to launch the concept in Hamburg, supplying power mainly to container vessels and cruise ships. In addition to providing electricity to vessels, the barge could be connected to the shore side grid as any other power supplier, and the cooling water could be fed into the distric heating system. It is likely that this additional use is required to reach sufficient utilization for an investment to pay off.97 The maximum power output of the LNG e-powerbarge is around 7-8 MW, which is sufficient to supply most container ships and cruise liners calling Hamburg. The power transmission has a voltage of 6,6kv (alternatively 11kv) and a frequency of 60 Hz.98 The frequency can however quite easily be adjusted to 50Hz. Becker Marine Systems has developed a very similar solution. 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 The major drawback of using LNG as fuel is the socalled methane slip, i.e. in-complete combustion of methane (CH4) from the engines, leaving methane as a component in exhausts.99 The methane emissions will negatively influence the reduction of greenhouse gases significantly, as CH4 is around 20 times more powerful a greenhouse gas than CO2. So without fully resolving the methane slip issue, the relative advantage of LNG combustion is reduced by the methane slip.100 As a rule of thumb, the methane slip tends to be highest when engines are operating at lower loads. Engine manufacturers are working on developing technologies to minimise the problem, and though prospects for important improvements are claimed to be very good, it is still very much an issue. In part, it can be handled through operational routines, i.e. setting up installations with multiple smaller engines where capacity is regulated by the number of engines used, keeping each running engine at a high load.101 Another issue to be considered is the safety challenges surrounding LNG bunkering. There are different opinions on how dangerous it actually is, however for example in Stockholm, Viking Grace is allowed on a case-by-case basis to bunker LNG despite its central berth and also taking crew and passenger safety into account. Interview with Ingemar Sörensson, Ship Management at Stena Line Scandinavia, 2013-04-02 World Port Climate Initiative. www.onshorepowersupply.org Interview, Bengt-Olof Jansson, CTO of Copenhagen Malmö Port, 2013-03-27 Here we refer to the fixed capacity based fee that a power consumer need to pay to the grid power on an annual (normally) basis to guarantee a certain level of capacity. Interviews with Gun Rudeberg (Environmental manager) and Ilka Ringdahl (Technical manager) at Port of Stockholm, 2013-03-14 and 2013-04-03. Interview, Richard Ballantyne, (Senior policy advisor), British Ports Association, 2013-04-02 Interview, Jan Kärnestedt, Gothenburg Energi 2013-04-21 Opdal O. and Steen E. ”Landstrom i Norge – en studie av mulighetene for landstrom i Norge”, p.21. Zero March 2012 World Port Climate Initiative. www.onshorepowersupply.org Vanessa Fedorczuk, CARL ROBERT ECKELMANN AG “Power Barge/Projektskizze” Interview, Bengt-Olof Jansson, Chief Technical Officer, CMP, 2013-03-27 Vanessa Fedorczuk, CARL ROBERT ECKELMANN AG “Power Barge/Projektskizze” Interview with Leif Holmberg, Technical Manager, Transatlantic, 2013-03-19 DNV, www.dnv.com Ibid. 27 ONSHORE POWER SUPPLY (OPS) SURVEY 4.3 Technical aspects of OPS The technology used for both OPS and power barge solutions are typically off-the-shelf components, regularly used in other power transmission and industrial applications. Accordingly, the material is available from major industrial component producers such as ABB, Schneider Electric and Siemens.102 The applications are however specialized, and companies such as SAM Electronics, Processkontroll and Marine Global have developed various applications. The most significant specialized component is the connection, where Cavotec is market leader. The actual connection and cabling requires a davit or crane for safe handling, but whether a crane is part of the shore-side installation or not is an open issue. As the vast majority of vessels have some sort of lifting equipment onboard for spares and provisions, it may not be necessary at a berth intended for multiple users. However, at e.g. a ferry terminal where the same vessel frequently connects, a more customised installation could make sense to simplify the physical connection. The connection at the Color Line terminal in Oslo is fully automated, meaning that no physical labor is required by the crew.104 www.processkontroll.se 4.3.1 Ports Assuming sufficient grid capacity is available, a shoreside installation typically requires a building relatively close to the berth containing the necessary technical equipment. There are also container-based solutions for increased, yet still limited, mobility. The shore-side includes switchgear, transformers and - if applicable a frequency converter. This is to adapt the current to meet the vessels’ specification.103 28 There are also installations in place where a cable reel is placed onboard rather than having the cable set up in a shore-side davit.105 This solution is perhaps less user-friendly, though more flexible and suitable where the shore-side connetion is located differently in different ports, as might be the case in a larger, less customized liner network. 4.3.2 Ships As rarely any two ships, even sister vessels, look the same on a nuts and bolts level it is difficult to describe any specific technical requirements. However disregarding any interface issues, a generalized installation requires modification of the main switchboard and an upgraded power management system. Some steel modification of cable and HV trafo room is likely necessary along with a hull door, unless existing pilot hatch or similar can be used.106 The complexity of cable running will vary, but as for any onboard installation safety requirements regarding breech if bulkheads must be observed, mainly for fire safety reasons. Container-based solutions To achieve a simpler and more flexible onboard installation, OPS solution providers such as SAM Marine are placing the majority of the installation in a standard 20’ container, which is easily placed on deck or even in a container bay. Thus, the only permanent installation required is cable running to the vessel’s main switchboard. SAM Marine have delivered several 102 103 104 105 106 such containers which are in operational use across the globe. The installation advantages aside, a container-based setup increases the flexibility by offering the opportunity to move the OPS equipment from one vessel to another. In many shipowning organizations, fleet allocation on a route network is often changing over time. With a container based installation an owner could let the part of the fleet calling a port offering OPS carry a container, which could then be moved to a replacement vessel. A container-based solution is also available for the shore-side installation, to cater for the need of flexibility in a port where it may not make commercial and/or financial sense to provide all berths with fixed OPS supply points, or in ports during development of new berths etc. Schneider Electric has developed a system with containers carrying the necessary equipment, which is easily placed on the quay where it is needed. The system includes monitoring systems, helping the port authority and the vessels to keep proper track of the energy consumed. Interview with Tomas Lust, Managing Director, Marine Global Sweden AB, 2013-03-19 Interview with Ingemar Gustavsson, VD Processkontroll Elektriska, 2013-03-13 Norén, O. ABB AB, Presentation “Shoreside Connection - Standardization & solutions 22-11-2011”. www.cnss.no Interview with Leif Holmberg, Technical Manager, Transatlantic, 2013-03-19 Interview with Tomas Lust, Managing Director, Marine Global Sweden AB, 2013-03-19 29 ONSHORE POWER SUPPLY (OPS) SURVEY 5 Environmental impact of OPS What are the main drivers behind the investments? 5.1 Introduction Emissions of air pollutants from ships contribute significantly to the total levels of atmospheric pollutants and green house gases in the North Sea region. Although ships emit more pollutants whilst at sea, ship emissions are a major source of local air pollution in ports and surrounding areas. The North Sea is in fact one of the most congested ship traffic regions in the world. In recent years, ship traffic has increased significantly in this region. This becomes evident when looking at cargo turnover in the most important North Sea harbours like Rotterdam and Hamburg. While the total number of ships arriving at the port of Rotterdam and Hamburg between 2000 and 2009 did not change much, the total cargo increased by more than 30 % in Rotterdam, and in Hamburg it more than doubled. This is reflected in the significant shift in ship sizes. While the number of smaller ships with less than 5000 GT decreased by 50%, the number of big ships with more than 50000 GT doubled in Hamburg.107 This sharp increase in traffic results in higher emissions to the air. Larger ships are equipped with larger engines, which use more fuel and therefore generate higher total emissions.108 When estimating the potential positive impact of OPS on reducing emissions in individual ports, it is important to bear in mind the great variations between the emissions emanating from different ship types. In the North Sea region it is interesting to compare the ports of Bergen, Hamburg and Rotterdam. In Bergen it is estimated that about 43% of NOx emissions are generated from cruise ships. In Hamburg the main source of air pollution is container traffic (56%) whereas in Rotterdam, tankers stand for 45% of emissions in port.109 5.2 Ship emissions in ports and at sea Researchers at the Helmholtz-Zentrum Geesthacht, 30 Centre for Materials and Coastal Research have looked closely at the issue of ship emissions to the air and have developed advanced methods for calculating the environmental effects of shipping. Based on this modelling they are constructing scenarios describing the likely effects on air pollution by various technologies such as OPS and LNG as a main fuel, the purpose of which is to provide guidance to authorities and industry stakeholders about how their choice of technology may impact on air pollution levels in the future. It should be noted that their research does not focus on CO2 emissions, but rather NOx, SOx, and particulate matter (PM). In their report ”Monitoring & simulation of pollutant generation and spread” (written in the framework of the CNSS project) the researchers describe the complexity of correctly estimating ship emissions, but they also explain how such data could be obtained. The information in this chapter is to a large extent based on their findings. The optimal method for calculating ship emissions is a bottom-up approach, collecting information on the technical specifications and operational efficiency of ship engines, and combining that with substancespecific emission factors (not just related to the fuel) to calculate the total emissions. Although this approach is the most accurate, it relies on access to detailed information on ship movements and characteristics. For coastal areas, this information is available in the form of AIS transponder data, which tracks and logs a ship's position, velocity and heading. Together with information on ship characteristics, it is then possible to calculate emissions from ships operating close to the coast. However, in the open North Sea the AIS data must be extrapolated and augmented with other sources of voyage data to provide adequate coverage of the entire area. Inside harbour areas many ships switch off their AIS systems, so accurate tracking information is not available. However, port authorities do gather data on ship arrivals, departures and gross tonnage as part of their harbour fees collection process. If this information were available for different ship types and sizes, it could be used to calculate in-harbour emissions. One crucial piece of information not included in the port authority data is the time spent at berth, often referred to as hotelling time. Some of the NOx found in harbour cities may be produced by ships at sea and this also has to be taken into account when calculating the emissions generated by ships whilst in port. A prerequisite for any further study would be port authorities providing information on ship arrivals and hotelling times inside their harbours. Regular surveys on the use of boilers, power generators and main engines inside ports could also help improve the accuracy of the applied emissions factors for different substances. Outside the port area, ship emission calculations should be based on accurate AIS data. This data should be collected by all states bordering the North Sea and made available, at no cost, for further research. The information should also be used to compile accurate emission inventories for shipping in the North Sea, which in turn would provide the raw data to support calculations of air quality with a three dimensional atmospheric chemistry transport model. In short, the researchers at the Helmholz-Zentrum Geesthacht / Centre for Materials and Coastal Research have come to the following conclusions and recommendations: • Both the transportation of pollutants over several hundreds of kilometers and the transformation of pollutants in the atmosphere should be taken into account. To support policy makers and industrial stakeholders in taking strategic decisions regarding choice of technology and clean shipping ‘practices’, the Geestacht researchers are developing a number of different scenarios for how the shipping sector may develop until 2020 or 2030.110 The OPS-specific scenario for ports (still being developed) is based on the following assumptions: Onshore power supply may reduce harbour emissions. The scenarios are built along the power that may be supplied to ships in a harbour, e.g. a cruise ship with a 6MW power demand for 10 hours equals emissions savings from 60 MW of power generation, which would mean around 864 kg NOx. - Three variants: 5, 10 or 20 ships may be served with electricity at the same time - New and big ships will preferably use OPS - Only the power previously generated by auxiliary engines will be replaced - No emissions for generating the onshore power will be considered • Ship emissions while at sea as well as at berth need to be taken into consideration. • The best way to calcultate emissions may be through a bottom-up approach using AIS data for ship movements. • Inside harbours, information on hotelling time and the use of boilers vs. power generators is crucial in determining ship emissions. • North Sea countries and harbours should collect AIS data and ship information, making it available for research and to all interested authorities. • Simulation models with varying complexity may be used to estimate the contribution of ships to air pollution. 107 108 109 110 V. Matthias CNSS Report on activity 1 in Workpackage 5, Monitoring & simulation of pollutant generation and spread Ibid Ibid Presentation 2012-06-14, CNSS Workpackage 5, Matthias, V. www.cnss.no 31 ONSHORE POWER SUPPLY (OPS) SURVEY 5.3 Noise reduction Air emissions are not the only environmental problem caused by ship activity. Noise is also a major cause for concern in many local communities in close proximity of port areas. In the EU and nationally there are strict rules regulating the maximum levels of noise allowed in populated areas. Noise is also classed differently depending on source (i.e. transport, industrial activity). In Sweden, noise generated by shipping is classed as ‘industry noise’, which must not exceed 55 dB. As shipping activity in many cases may generate noise exceeding the legal maximum limit, this causes problems in municipalities that want to exploit the ‘attractive’ seaside land for property development. The cities of Stockholm, Malmö, Gothenburg and Helsingborg are working in partnership to promote a more flexible legislation regarding noise to allow for urban development in areas close to ports.111 In Hamburg, noise pollution from the port is also a problem for urban development. Urban planners and construction companies have had to come up with innovative solutions to enable development in the HafenCity area, which is located in the port area.112 OPS is an interesting technology in this regard, as ship noise is significantly reduced. However, as the experience in Stockholm shows, not all types of noise generated by ships at berth is eliminated by OPS. If the ship engine is the primary source of noise, OPS solves the problem. If however the noise problem is caused by the fan systems onboard, OPS does not offer a solution.113 5.4 OPS – a clean shipping technology? According to the IEA, the average CO2 emission associated with electric power generation in the EU is 350-380 g/kWh. The corresponding CO2 emissions of auxiliary engines are around 680 g/kWh, implying a significant emissions reduction if vessels switch to OPS.114 If the power produced by auxiliary engines onboard ships is replaced by onshore power generated from renewable sources, OPS has clear environmental benefits (proportional to the level of use of any given 32 installation). If the auxiliary fuel is replaced by fossile based power production onshore, the benefit is naturally significantly smaller. The World Port Climate Initiative (WPCI) provides a calculation tool to inform shipping stakeholders of the impact on CO2 emissions of any given OPS investment. According to WPCI the climate impact of natural gas-fired power plant is less than half that of a coal-fired plant, implying a reduction of around 40 % compared with auxiliary engine use.115 One could argue that it still makes sense to shift to onshore power in cases of fossile based electricity since centralised power production in gas or coalfired power stations is both more efficient than ship engines (i.e. more power output per fuel unit) and is also likely to have better cleaning technologies (particle filters).116 In addition, it is also possible to use the waste heat generated by large power plants for district heating. Another argument in favour of OPS regardless of electricity production source is that power produced onshore is covered by national and international emissions ceilings (for CO2 mainly), whereas power produced onboard is not counted towards national emissions targets. This leads to an increase in the total power consumption covered by the emission ceiling. Temporarily this increase is most likely to be met by fossile based power production but long term the increase must be compensated by renewable power. In interviews with ports using OPS or with concrete plans to do so in future, all confirm that they will only purchase ‘clean power’. This makes a lot of sense, however one must bear in mind that if a port pays a little extra to the power trading company for renewable electricity the non-renewable power is consumed somewhere else in the system anyway. Hence this is a ‘symbolic’ measure, but one which promotes renewables in the long term. Stena is interesting in this regard however, as the company owns wind farms producing ‘green electricity’, which meets the needs of the OPS installation in the port of Gothenburg.117 In the North Sea region, power generation in individual countries and sub-regions vary greatly. At one end of the spectrum there is Norway with virtually all electricity production coming from hydro power. The other extreme is the Netherlands, which is almost totally dependent on conventional thermal power. Source: Eurostat, Electricity statistics, 2011 Since the countries in the North Sea region are integrated into different regional synchronised power systems with a power mix consisting of electricity generation from several different countries, the table above is only intended to give a generalised view of the regional differences regarding renewable and nonrenewable power generation. It is easy to calculate electrical power generation on a national basis, however, calculating power consumption across integrated regional synchronised systems is extremely complex. Map of of European Transmission System Operators Organizations (Regional Groups) Continental Europe, Nordic, Baltic, Great Britain 118and Ireland / Northern Ireland (Wikipedia) 118 111 112 113 114 115 116 117 118 119 The issue of whether an increase in demand (i.e. due to an OPS installation) is met by renewable sources of electricity is extremely complex depending on a number of variables at various levels in regional power systems, and is thus not in the scope of this report. At regional power system level, OPS (even if generally introduced across the region) will not have any significant effects in the large European electricity transmission systems.119 In a longer-term perspective the European power market will face fundamental structural changes with sharp increases in renewable energy production. The EU 2020-20-20 goals puts considerable pressure on member states to increase renewable energy production and promote energy efficiency. In the CNSS region, two countries are particularly interesting in this regard, namely the UK with highly ambitious plans to invest in large scale offshore wind capacity, and Germany that took the decision to phase out all nuclear power production. The connection of all ships in the port will require enomorous amount of power, which is not possible for most of the biggest container ports now. According to the international standard for high volrtage shore connection IEC/ IEEE/ ISO 80005-1 the system for connection of ocean going container / reefer vessel should be sized for 7.5 MVA. The same standard requiremnets for cruise ships account for minimum Interview, Per Blomstrand, Stockholms Stad AB, 2013-03-12. Information about the project “Stadens ljud” (in Swedish): www.hplus.helsingborg.se Interview, Hape Schneider, HafenCity, Hamburg, 2013-03-21 Interview, Gun Rudeberg, Port of Stockholm, 2013-04-03 IEA information quoted on the World Port Climate Initiative website, www.onshorepowersupply.org www.onshorepowersupply.org Opdal O. and Steen E. ”Landstrom i Norge – en studie av mulighetene for landstrom i Norge”, Zero March 2012 Interview Jan Kärnestedt, Gothenburg Energy, 2013-04-21 www.wikipedia.org Interview, Tommie Lindquist, Swedish National Grid 33 ONSHORE POWER SUPPLY (OPS) SURVEY 16.5 MVA and recommended 20 MVA system requirements. Shore power is the only technology to completely reduce the emissions in port, with the wider penetration of this technology ports will require significant improvement of existing transmission and distribution infrastructure, while utilities will need to improve significantly the power output. In a wider context, one could also see the deployment of OPS technology as being part of the trend of increasing electrification of society, another example being the car industry working to move away from fossile fuel to electric vehicles. 5.5 Environmental cost-benefit The big question the whole shipping industry seems to be asking is whether OPS really has any positive environmental impact. At a general level it is clear that if deployed on a massive scale, there would be a large reduction of the amount of fuel oil used in shipping, and generating the electricity onshore will emit less pollutants, even if this is done in coal-powered plants (because of better filtering techniques and higher environmental requirements). To get a more detailed answer to this question the environmental cost-benefit analysis must be studied on a case-by-case basis as port conditions and shipping patterns in individual locations are so diverse. Apart from the environmental footprint reduction analysis it is important to evaluate the marginal costs of emissions reduction. Marginal cost of emissions is the estimated economic damage value, which gasses do to the socio-economical parameters of life, e.g. health, living conditions, environment. According to ABB and Danish Energy Association calculations for the Copenhagen Cruise Terminal and official marginal costs of emissions for Denmark marginal costs of Emission reduction per year will be more than 2.25 M EUR 34 Marginal cost of pollution case/example As with many other “environmental investments” it is often unclear at the outset what both the environmental and commercial cost-benefit of the investment will be. In this regard, OPS needs to be assessed in a longterm perspective looking ahead towards 2050 or beyond. It is probably safe to assume that the energy mix in Europe is significantly greener then than it is today. In very general terms the following factors are important when estimating the environmental impact in any given port / ship. - Total time in port and electricity consumption i - n port (i.e. how many kWh are generated onshore as opposed to onboard). - The degree to which ships can connect to shore power in the ports on their specific route (the higher number of ports a ship can connect to, the more it makes sense for the ship owner to install OPS technology onboard). - Ship engine efficiency, e.g. depending on age, type of technology, and exhaust gas cleaning system onboard. - Ship use of energy for heat vs. electricity. Heat produced in boilers cannot be replaced by shore side electricity. For some ship types (e.g. tankers) this may be significant. - Type of fuel (HFO/MGO/LNG) used in auxiliary engines (i.e. the ‘dirtier’ the fuel, the greater positive impact of switching to OPS). - How is the onshore electricity produced (i.e. renewable or fossile-based sources)? - How close to the quay are residential areas? OPS avoids local emissions that may cause harmful concentration levels. OPS is primarily a technology designed to solve local environmental problems of air pollution and noise in port. It is very far from a catch-all solution which alone will transform shipping into a significantly greener trade. In combination with other emission reduction technologies however, OPS does have an important role to play. Obviously, if there is a critical mass of ports and ships that invest in compatible OPS technology globally, this makes environmental sense, provided the increase in power consumption from the onshore grid is met with an increase in renewable energy production. The key to determining the usefulness of OPS technology is the amount of kWh genereated by renewable sources onshore instead of onboard ships. Assuming the longterm perspective as argued above, it is likely that international regulations regarding emissions are much tougher than today and OPS might well become a global requirement for all ports and ship owners. In this scenario the global CO2 emission reductions would be considerable. modelling to analyse whether OPS, which may be a significant investment, has any impact on the local community in proximity of the port.121 They give two interesting examples proving this point. “At the ports of Los Angeles and Long Beach there is no buffer zone between the local community and the port, and drastic control measures may therefore be needed in the form of OPS. At the Port of Rotterdam, on the other hand, research has shown that installating OPS at the Euromax terminal at Maasvlakte 2 would not benefit local communities, as these are located outside the immediate region of air quality impacts. The greatest benefits are thus to be gained at terminals located close to built-up areas”.122 Any specific OPS installation in a port or a ship must be analysed in its wider context, also taking into accounts the potential environmental effects of other technologies and practices, including cleaner fuels, scrubbing, energy efficiency measures onboard (e.g. heating, lighting, ventilation, water, electricity consumption)120, and selective catalytic reduction (SCR). To conclude, OPS is primarily designed to solve local pollution problems. If it is clear that the technology will significantly reduce emissions in specific communities investment is recommended. Since public funds are often scarce society should primarily focus on the ships that stand for the largest emissions whilst in port. To provide guidance for investment decisions in individual locations, ports would benefit from implementing Emission Management Plans (e.g. based on EcoPorts or equivalent approach). As the WPCI points out, it is important to use air quality 120 121 122 The new Viking Grace ferry is a very interesting example in this regard and this LNG-powered ship has a wide range of energy saving technologies installed. www.onshorepowersupply.org Ibid 35 ONSHORE POWER SUPPLY (OPS) SURVEY 6. Mapping of OPS in the North Sea Region Which ports and ship owners have invested in OPS? 6.1 The North Sea Region Virtually all types of seabourne traffic can be found in the North Sea region, from inland barges to ULCC’s and anything in between. Similarities between some segments exist, in terms of flows of goods, market conditions, trading patterns as well as physical restrictions, etc. However, sometimes the differences are so significant that the use of water as medium is the only common denominator. All countries bordering the North Sea are members of the EU except Norway. Though the formal policy framework in place may not always include Norway, there is a common mindset in most matters relevant to this study. The area is trade and consumption intensive, highly developed and regarded as safe. Piracy is unheard of in modern days, and security is rarely an issue. One of the common issues is the environmental impact of industrialization, affecting most parts of the region to some extent. The major flows of goods in the region are the import flows, typically entering the area via the ARA (Antwerp/Rotterdam/Amsterdam) for further transshipment within the region. This is mainly unitized/containerized goods, however applicable to petroleum products, dry bulk cargoes etc as well.123 As an area with several major hub ports, the transshipment rate and highly developed distribution system means a certain degree of predictability regarding transport network constellations, network loads etc. Liner traffic of descending capacity is key in such a transshipment intense system. 36 6.2 National differences 6.2.1 Sweden Sweden has the most OPS installations available in the North Sea region, albeit a significant part in Baltic Sea ports. This is a result of the national legislations on environmental issues, forcing operators to invest in OPS via the environmental courts. Electricity consumed via OPS is subject to tax reductions, and operators only have to pay 1,3% of the regular tax on the electricity consumed.124 Sweden has a relatively low electricity price – €0,083/kWh in 2011125. 6.2.2 Denmark There are no HVSC installations yet operational in Denmark, though several ports offer LVSC connections. CMP, which is the company jointly operating Copenhagen and Malmö ports are actively looking into various options for cruise ships.126 The average electricity price in Denmark in 2011 was €0,093/kWh127 6.2.3 Norway Norway offers opportunity to investment support from the so called NOX fund, and several organistions are involved in assisting companies looking for investment support, e.g. Bellona and Enova, which were both involved in the Color Line terminal OPS at Oslo port. The installation was a result of joint financing with contributions from Color Line, Transnova, Enova and Oslo Havn KF.128 There are discussions on introducing a tax break similar to Sweden.129 The average electricity price in Norway in 2011 was €0,091.130 6.2.4 Germany Germany has high environmental ambitions on a federal level as well as on state level. This is in part shown through a tax deduction for electricity consumed through OPS. Hamburg stands out as progressive, engaged in cooperation with Chinese counterpart ports to offer global liner traffic OPS at both ends of their route, as well as looking at what can be done about the emissions and noise caused by the cruise vessels calling the port. Hamburg has decided to invest in an OPS installation for the cruise liners calling the Altona terminal, but in part due to grid restrictions, the power barge concept is also pursued in Hamburg.131 The average electricity price in Germany in 2011 was €0,124.132 6.2.4 Netherlands As a result of the intense inland barge traffic, low voltage OPS is widely deployed, and even mandatory for barges in the Port of Rotterdam. Rotterdam holds Europe’s biggest port, making shipping important to the national economy. A significant part of the goods passing Rotterdam comes in via global liner traffic. As the larger container vessels only call a few ports on their routes, OPS could be interesting despite their 123 124 125 126 127 128 129 130 131 132 133 134 relatively limited time at port. On the other hand, the larger the vessel, the larger their energy consumption, putting severe strain on the onshore grid. The Dutch government has decided to offer subsidies to shipping companies and seaport terminals investing in OPS. Initially, the program will apply to the Port of Rotterdam only, and the maximum subsidy is €750.000.133 The average electricity price in the Netherlands in 2011 was €0,094 6.2.5 Belgium Belgium has one HVSC installation in the port of Antwerp. The installation has been developed by initiative of the Independent Maritime Terminal, which is owned by the Independent Container Lines company. The project was co-financed by the Flemish government and the Antwerp Port Authority. The installation was initially the only dual-frequency OPS in the world, however other similar systems have been built since.134 The average electricity price in the Belgium in 2011 was €0,115. American Association of Port Authorities, www.aapa.org Swedish Government, http://www.regeringen.se Eurostat 2011, epp.eurostat.ec.europa.eu Interview with Bengt-Olof Jansson, CMP. 2013-04-27. Eurostat 2011, epp.eurostat.ec.europa.eu Oslo Havn, http://www.oslohavn.no/ Opdal O. and Steen E. ”Landstrom i Norge – en studie av mulighetene for landstrom i Norge”, p.25. Zero March 2012 Eurostat 2011, epp.eurostat.ec.europa.eu Port of Hamburg, www.portofhamburg.com Eurostat 2011, epp.eurostat.ec.europa.eu WCPI, www.ops.wpci.nl Ibid. 37 ONSHORE POWER SUPPLY (OPS) SURVEY 6.2.6 UK 6.3.3 Global liner traffic There are ports in the UK, such as Southampton135, assessing OPS, however there are no concrete projects as of yet. (DFDS have postponed its plans to invest in OPS for its terminal in Immingham)136. If time in port represents only a minor part of any given voyage, which applies to all transoceanic trade irrespective of cargo type, the incentive to invest in OPS technology is very low today for the following reasons: The UK differs somewhat from the rest of the countries in the region in terms of port ownership structure. Though it occurs throughout the region, UK ports are to a larger extent privately owned, thereby more intensely subject to commercial fluctuations, possibly rendering port operators less likely to invest in technology with uncertain utilization. There are also grid limitations holding back any initiatives. The average electricity price in the UK in 2011 was €0,104. 6.3 Conditions for different types of traffic 6.3.1 Ferry/RoPax traffic Regular traffic typically between two set ports per vessel increases the incentive to invest in OPS, provided that ship owners and ports can agree on a compatible technology. As most ferry operators own (or long-term lease) their terminals this threshold should be minimal provided upstream grid capacity is sufficient. Decision to invest depends on time in port and the likely trend of fuel costs vs. electricity costs. 6.3.2 Cruise traffic Cruise vessels often trade in various regions across the globe depending on season, e.g. a few months in the Baltic, a couple of weeks in the Mediterranean followed by the winter months in the Caribbean. In the Baltic and North Sea region they are unlikely to call the same port more than around 10-15 times per year, so all destinations on their route, preferably in more than one region, needs to offer or demand OPS connection for the owners to invest. Cost savings could be significant considering their power consumption, especially in regions with warmer climate. 135 136 38 • Very few ports offer OPS. • The time in port is short in comparison to their time spent at sea. • As with other types of traffic the cost of fuel vs. cost of electricity in different countries/regions is central to any investment decision. • Upside: these vessels only access a very limited number of berths due to their size, which speaks in favour of customised, cost-efficient shore-side installations. • Containerised OPS solutions onboard improve and speed up access to the onshore grid. 6.3.4 Short-sea liner traffic The same issues as for global traffic apply, however as more time is spent in port, an investment threshold should be slightly lower. RoRo liners often have their own terminals, meaning that the same berths are used on each call, catering for customized, cost efficient shore-side installations just as for large container vessels • Less power required as short sea trading vessels are smaller, thus reducing upstream power grid requirements. • Liner traffic generally means container or RoRo, where the cargo is loaded/unloaded by means of shore-side cranes, tug masters etc, which reduces the power required by the vessel itself. 6.3.5 Other traffic types As bulk cargoes, both liquid and dry, are generally shipped on spot/tramper basis the trading patterns are often very irregular. This applies to all vessel sizes except for the very smallest (<4000 dwt). “Port of Southampton Master plan 2009-2030”, www.southamptonvts.co.uk Interview with Gert Jakobsen, DFDS 2013-12-02 Cargo is often discharged using onboard equipment (pumps, screws etc) generating a relatively high power consumption. 6.4 Ship owners Obtaining specific information regarding individual ships and their owners is sometimes difficult due to the complexity of owner structures in the sector. Another aspect to take into account is that there is no single definition of “shipowner”, i.e. it depends on the perspective applied. For the purpose of this mapping we have chosen to consider the commercial operator to be the owner in any case of split ownership/operation. By Traffic Type Traffic Type Owner OPS Container Hapag-Lloyd HV Container APL HV Container ICL HV Container Maersk Line N Container MSC HV RoRo DFDS P RoRo Polferries HV RoRo RABT HV RoRo Cobelfret HV Comment Evaluating RoRo Wagenborg HV Ferry Viking Line HV Ferry Color Line HV Ferry Hurtigruten P Ferry Tallink Silja P Cruise Aida P Cruise HAL HV Not EU trading Cruise RCCL HV Not EU trading (HV=HVSC, N = No, P = Planned) It is well worth pointing out that though Royal Carribean (RCCL) and Holland America (HAL) have vessels that can connect to OPS they do not empoly them on North European trade. These vessels are equipped with OPS facilities to enable trade on the US west coast. Nonetheless, it suggests that they are willing to invest in the system as such, provided there is sufficient (legislative) incentive. Maersk Line is included in the list as the company is continuously evaluating various environmental improvement activities, including OPS. These evaluations are handled by Maersk Marine Technology, a cross-functional division having an overall responsibility for various improvement activities for all AP Møller controlled tonnage. There are no immediate plans to invest in OPS for vessels in European trade, however container vessels calling Californian ports will of course also be affected by the local regulations. Being the world’s largest ship operator a decision to invest could have major impact for the concept as such as it could be rolled out quickly across the entire fleet. Though slightly difficult to discern any trends from the limited number of installations, the concentration is certainly among short-sea liner operators. The absence of any owner operating in tramper trade is notable. 39 ONSHORE POWER SUPPLY (OPS) SURVEY By Vessel Vessel name Owner/operator Vessel type Port Color Fantasy Color Line Ferry Oslo Color Magic Color Line Ferry Oslo NYK Apollo* NYK Line Container Antwerp Stena Britannica Stena Line Ferry Rotterdam Stena Hollandica Stena Line Ferry Rotterdam Stena Danica Stena Line Ferry Gothenburg Stena Germanica Stena Line Ferry Gothenburg TransPaper RABT RoRo Kemi/Oulu/Lübeck/Gothenburg TransTimber RABT RoRo Kemi/Oulu/Lübeck/Gothenburg Transpulp RABT RoRo Gothenburg/Tilbury Stena Jutlandica Stena Line Ferry Gothenburg Stena Scandinavica Stena Line Ferry Gothenburg Stena Spirit Stena Line Ferry Karlskrona Stena Vision Stena Line Ferry Karlskrona Skåne Stena Line Ferry Trelleborg Wavel Polferries Ferry Ystad Jan Sniadecki Polferries Ferry Ystad Skania Unity Lines Ferry Ystad Mariella Viking Line Ferry Stockholm Romantika Tallink Ferry Stockholm Victoria Tallink Ferry Stockholm Princess Anastasia St Peter Line Ferry Stockholm (LVSC) Icebreakers Swedish Icebreakers Luleå (LVSC) 6.5 Status of OPS in ports in the CNSS area Though the focus of this study is on high voltage connections (HVSC) the list includes low voltage (LVSC) installations as well, gaining relevance as it offers a working solution for many vessels. 40 The selection of major North Sea Ports in the CNSS Geografical area was based on tonnes/year or pax/year. As many ports have running evaluations of possible investment options, the information in this list needs to be maintained continuously. Status The OPS initiatives in this report are mainly from Scandinavian ports and shipowners as shown in the table below. We estimate in our research that there are approximately 40 matching ship/shore high voltage connections globally today. According to ABB estimations there are more than 100 installations with HV and LV shore connection. With an estimated number of vessels to more than 50000138, all types and areas in the world included and roughly 4700 ports139 we may conclude there is a potential for OPS with the available international standards and technology in place. At any given moment there are 4000 ships in the European ECAs. It is fair to say that the OPS status in the forseable future will be poor, with the planned installations considered, in the North Sea region as well as globally. One optimistic view is the Table X, A list of of the OPS status in major seaports in the North Sea/CNSS Area fact that the number of containerized OPS systems are increasing, almost all connections (HVSC) the list includes low voltage vessels above 6000 TEU include the technology in the 140 (LVSC) installations as well, gaining relevance as it delivery of a new vessel . offers a working solution for many vessels. Though the focus of this study is on high voltage 137 138 139 140 www.iaphworldports.org/WorldPortInfo.aspx www.marinetraffic.com www.worldportsource.com Lorene Grandidier, Schneider Electric. 41 ONSHORE POWER SUPPLY (OPS) SURVEY The selection of major North Sea Ports in the CNSS Geografical area was based on tonnes/year or pax/year.141 NB: Rotterdam is on the list due to Stena Line’s OPS at their Hoek-Van-Holland terminal. There are however plans to install OPS in other parts of the port, not dedicated to one specific operator and their terminal, however this is yet to be decided upon. 141 42 www.iaphworldports.org/WorldPortInfo.aspx As many ports have running evaluations of possible investment options, the information in this list needs to be maintained continuously. 7. The commercial perspective What are the barriers to investment? 7.2 Ports perspective 7.2.1 Advantages 7.1 Introduction There are a number of factors impacting on the commercial viability of OPS for ports and ship owners respectively, including: - the price difference between fuel oil and electricity generated onshore - tax on electricity / fuel oil - design and application of port dues - rate of utilisation of the OPS equipment One way of making the commercial equation regarding OPS more advantageous for both ports and ship owners is the application of differentiated port dues. Arguably, to create a level field for the industry while tackling environmental problems, differentiated port dues should be made mandatory. Another mechanism that may promote ship owners to invest in OPS is the idea of a joint industry fund, inspired by the Norwegian fund. Ship owners causing emissions would through this approach have to contribute to the fund, paying an emissions fee, e.g. based on the 2021 Tier III level. The fund would then help ship owners to invest in OPS and/or other clean shipping technologies. If applied on a European level, this could significantly aid the shipping industry in retrofitting its vessels. The port of Gothenburg uses a model whereby there are targeted fees for NOx and SOx funds sustainable development projects in the port.142 142 From a port’s perspective, an OPS installation will have a number of obvious advantages, of which noise and emission reduction are the most obvious and immediate. This would in turn generate goodwill benefits, strengthening the environmental profile of the organisation. The investment could be considered relatively safe from a technical perspective, as there are several installations in place, representing a track record of proven functionality and reliability. Looking at it as a business opportunity it could represent a possible income source, depending on what pricing principle is used, i.e. if the port should serve as non-profit transmission supplier or if they should add on to the electricity cost incurred from the power supplier. The latter would be preferable to add viability to an investment, however it could cause discontent among ship owners, especially if connecting to OPS becomes mandatory. 7.2.2 Disadvantages Though very individual and difficult to predict on a general level, an assumed grid reinforcement could be rather expensive. That is not necessarily a disadvantage as such, however it is certainly an issue to consider as any large-scale investment affects a company’s financial situation. Unless OPS is made mandatory for ship owners, port operators stand to risk investing heavily in an installation with low utilization. If it is made mandatory on a municipal or national level rather than regional, ports may lose traffic to other ports without such a requirement. Interview with Susanne Dutt, Port of Gothenburg 2013-11-22 43 ONSHORE POWER SUPPLY (OPS) SURVEY 7.3 Ship owner perspective 7.3.1 Advantages A transition from onboard generated power to OPS connections is likely to reduce the vessel’s running costs, both in terms of fuel savings and through reduced engine wear and increased maintenance intervals. Depending on the efficiency of the generators and varying with fuel market price, the cost of producing electricity on board is around 0,15 /kWh whereas electricity supplied via OPS should cost in the region of 0,1/kWh, so the difference is considerable. NB however that aside from electricity, the auxiliary engines will generate heat, which is put to use onboard, and that too would have to be compensated for, either by increased electricity use or by connecting to the district heating system. The onboard working environment will be improved as a result of noise, emission and vibration reductions, and as for the ports there are possible goodwill effects. If a port – or rather a region – makes OPS mandatory, a decision to invest will enable the vessel to trade 44 unrestricted making it easier to employ and consequently more profitable. Development of differentiated port dues for ships utilising OPS, would make such investments more attractive to the ship owners. 7.3.2 Disadvantages An installation will through its weight have a limited impact on fuel consumption under way – it may come off as negligible but over the lifetime of a vessel it could be significant. The utilization issue is the same for ship owners as for ports – unless a sufficient share of the ports regularly called provides OPS, utilization will be too low to drive enough savings on the running costs. Assuming the unlikely scenario of increased electricity prices without a corresponding development on bunker prices, a possible increase in running costs could occur. 8. Case studies 8.1 Case study 1: Hamburg ”The Senate of Hamburg strives to further reduce portrelated emissions, in particular in fringe areas of the port that are in direct vicinity to emissions sensitive urban areas”. ”Cruise shipping companies have already expressed their interest in using shore power for their high-consumption passenger ships. The Senate of Hamburg will pursue this issue and verify economically viable offers for the two cruise ship terminals in Altona and HafenCity by taking account of the specific characteristics of each berth. Mobile energy supply options for cruise ships will also be considered with the respective nautical circumstances in mind”. 143 Hamburg is a universal port144 stretching across 7,399 hectares, of which (4,331 hectares are land area). In addition to this, an area of 919 hectares is planned for future port expansion. There are 320 berths in the port, which serves about 10 000 port calls (2011 figures), roughly half of which are container ships handling an annual grand total of over 130 million tons of cargo. Although still proportionally a small share of total port activity the cruise trade is an increasingly important sector for the port. Cruise calls were up from 61 in 2006 to 175 in 2012, and this figure continues to grow.145 In light of the size of the port of Hamburg, which ranks 143 144 145 146 147 14th in the world and third in Europe (messured on TEUs/container traffic), Hamburg faces serious environmental challenges posed by port-related activity. The primary concern is air quality and authorities work to promote a more environmentally sustainable shipping sector. For example, Hamburg Port Authority is actively involved in the work of the World Port Climate Initiative.146 The port authority, Hamburg’s government (the Senate) and relevant authorities work in tandem to try to cut emissions generated in the harbour as air pollution levels exceed the regulated EU threshold.147 In recent years public concern about air pollution has grown, driven by a sharp increase in cruise traffic. Even though cruise traffic represents a minor share of port operations in Hamburg, cruise liners are more ‘visible’ to the public due to the nearness of the cruise terminals to the residential areas and to the influx of tourists roaming the city. For this reason the public debate has to a large extent focused on the cruise trade. In 2011 the Hamburg parliament gave the ministry for urban development and environment (BSU) the task to investigate the feasibility of providing shore-side electricity in the port. It was decided to focus on cruise ships as a pilot case, testing the viability of OPS as a model to reduce local air pollution. The OPS plans relate to the cruise berths at Altona and HafenCity. The cruise trade in Hamburg The cruise ships calling at the port stay for about 10 hours in port (mostly only by day). In total there are about 160 calls by cruise ships divided over the two terminals, Altona and Hafen City. In Altona, it is estimated that the OPS installation will cater for the needs of cruise ships 70-80 days staying for about 10 hours per port call. In the medium term the authorities believe that about half of the cruise liners will be able to utilise the OPS connection. ”Port Development Plan to 2025”, p. 82, Free and Hanseatic City of Hamburg, www.hafen-hamburg.de In addition to container handling, a universal port is geared to all forms of non-containerised cargo like project cargo, suction cargo, liquid cargo, grab cargo and bulk cargo. In an interview with the port authority and City of Hamburg the current estimate is 160 cruise calls per annum. Interview with Hamburg port authority and City of Hamburg, 2013-03-20 Ibid 45 ONSHORE POWER SUPPLY (OPS) SURVEY The Altona terminal has one berth with a quay length of 360m for ships up to 300m, 12m/NN water depth, plus an integrated passenger boarding bridge. The construction of the quay and terminal was completed in 2011.148 In order to create a viable OPS solution meeting the needs of the port clients, BSU, the ministry for economy and the port authority are working closely with the cruise operator Aida, which account for about 80% of port calls by cruise ships in Hamburg. Aida caters for about 2000 passengers and has a power demand of 6,4 MW (3,2 kW per passsenger). The planned installation will be able to provide for 12 MW. Once connected this will equal about 4% of the power consumption of the whole city of Hamburg.149 When completed the OPS installation will be the largest in the world in terms of power. Converters will be installed on the quay to change the frequency from 50 to 60 Hz. The installation will be based on the IEC standard for High Voltage Shore Connection System, similar to the installation used in the port of Oslo (Color Line). the City of Hamburg, the port authority, Vattenfall and BSU. Power Barges In parallel with the plans for the permanently installed shore-side power, the city is actively supporting the more commercially driven alternative to OPS, namely the novel concept of Power Barges. Aida cruises are considering using the power barge solution at the HafenCity terminal. The Hamburg Parliament has also tasked the city’s authorities with providing support to this development in the form of regulatory advice and information (no public financial support will be available). Any additional considerations for a 3rd Cruise Terminal in the port also include power barges to supply Cruise Ships with shore power. The power barges will use LNG for power generation. 8.2 Case study 2: Stena Line Financially, Hamburg’s Senate will provide the funding for the OPS investment, however there is hope to obtain some co-funding from the EU’s TEN-T programme. The ministries are currently working on a strategy document and feasibility study to be presented to the Senate of Hamburg. The tender for the OPS installation is due to be published towards the end of 2013. In regards to the power grid, the OPS installation does not pose any significant challenges. As Hamburg is such a large port, which even without OPS has a very high power consumption, there are already strong grid connections serving the port. In proportion to the power need of the port as a whole, the OPS installation will not have any disruptive effect on the grid infrastructure. The grid owner, Vattenfall, have confirmed that they can provide the necessary power to the cruise ships. There are also initiatives in the port looking at ‘smart grid’ solutions in cooperation between 148 149 46 Stena Line, one of the world’s largest ferry operators, has been an early adopter of the OPS concept. As with most others, they started out using low voltage connections to supply their ferries while at berth during overnight stops. There has been a gradual transition to HVSC, partially driven by a continuous upgrade of the fleet where larger newly built vessels have replaced smaller ones. With vessels respectively using both 50 and 60 Hz, their recent installations include shoreside frequency converters to cater for all possibilities. As a ferry operator mainly trafficking shorter routes, Stena Line has the inherent advantage of just calling two ports per vessel. With a long-term commitment to routes, ports and terminals, the investment time is predictable and cooperation with local authorities, municipalities, etc. is inevitable. Hamburg Cruise Center, www.hamburgcruisecenter.eu Interview with Hamburg port authority and City of Hamburg, 2013-03-20 Stena Line’s OPS progress 1990 Connection of the Kiel vessels in Gothenburg 1997 Connection of Stena Carisma (Gothenburg) 2006 Connection of Stena Danica (Gothenburg) 2010 Two connections at Masthuggskajen's terminal and overnight berths 2010 Shore side power installed in Karlskrona 2011 Connection of the two Superferries at Hoek van Holland Stena Line’s OPS drive was initiated as a means to reduce noise at their terminals in central Gothenburg. The vicinity to residential areas has been a major factor, and Stena chose to launch OPS as one of many initiatives to reduce their local environmental impact rather than moving their terminals to more remote parts of the harbour. These initiatives have been part of Stena Line’s license to operate the terminal as set by the environmental court. As the figure shows, all current OPS usage is at one of two ports only. To some extent this is a consequence of the “home port” idea, i.e. having one port where any overnight layovers are placed, thus creating a significant inbalance in how much time is spent at berth in each port. Additionally, connecting in only one port is, in part, a result of an absence of local municipal requirements, and/or a lack of sufficient grid capacity. As shoreside investments – beyond what Stena can do at their terminals – are necessary to get a functioning installation, local commitment is imperative. Though shoreside electricity costs less per MWh than what is produced onboard using the auxiliaries, availability is key for ship owners to invest. In the winter time, Stena’s vessels are occasionally forced to run their engines despite being connected to OPS in order to generate sufficient heating. Aside from the temperature in the accommodation and public areas of the vessel, heating is required to maintain the temperature in fuel oil storage and day tanks as well as on the main engines. In Gothenburg, the local power company is looking at connecting Stena’s ferries to the district heating system to resolve this issue, however this project is still at a very early stage. It could be noted that the port of Kiel has not supported OPS installations for either Stena or Color Line, both fitted with HVSC equipment. 47 ONSHORE POWER SUPPLY (OPS) SURVEY 9. Overall analysis What does the future hold? Will OPS become the norm? 9.1 Introduction There are several regions in the world closely looking at OPS technology as a means to cut local air pollution and noise. The most far-reaching initiatives have been taken on the west coast of the United States where OPS becomes mandatory for cruise and container vessles in select ports from 2014. During 2013 several important decisions have been taken in the EU, that are working in favour of wider deployment of OPS, most notably the European Directive of Alternative Fuels, which is likely to be adopted during the spring 2014. The emerging signs of cooperation between regions in different parts of the world is also relevant when looking at the future role of OPS in the shipping trade. 9.2 Ship owners The shipping sector is at the heart of the global industrial supply chain and competition between ship owners is fierce. The truly international character of the trade emphasises the difficulty for governments to regulate beyond their respective national jurisdictions. Shipping also has a highly fragmented ownership structure, which adds to the complexity. The shipping sector is increasingly under pressure to provide low-cost and safe transport with minimal environmental impact. Arguably, since the shipping sector as a collective constitutes an extremely heterogeneous group, ranging from very small companies to multinational corporations, it lacks the proactivity to efficiently influence long-term market developments through multi-party cooperation. Consequently, they become subject to regulation without being able to successfully lobby for their interests. 48 In the case of a primarily infrastructural issue like OPS, this means that any large-scale deployment will have to be promoted, initiated and enforced by regulatory bodies and port authorities. 9.3 Ports Similar to the fragmented shipping industry, the European port sector also comprises a very diverse group of stakeholders ranging from hub ports facilitating the majority of the global trade down to smaller regional hubs and distribution networks. Port activities are key to the economic well-being of many societies, however, their decision making clout in regulatory matters is not necessarily in proportion. Although ports are affected by market changes in the shipping sector, compared to ship operations they are less susceptible to rapid market fluctuations. They generally take a more long-term view on investments than ship owners. Compared to ship operators, ports are to a larger extent publically owned. In the North Sea region the ownership structure is diverse ranging from entirely municipally owned to fully commercial bodies. The public influence on ports means that their business is subject to local politics and public opinion affecting their decision making, not least in regard to environmental issues. One could also argue that expectations and pressure on ports to accept local conditions in terms of environmental management and corporate social responsibility issues are stronger since they are fixed to a specific location, often in close proximity to urban areas. 9.4 The ship owner and port authority interface The precondition today for any viable OPS investment to be initiated is a long-term collective commitment by either ports or ship owners to eliminate the “chicken or egg” situation. As publicly controlled entities, ports are comparatively more likely than ship owners to prioritise the public interest over commercial profits. − It is improbable that ship owners would take the initiative to invest in OPS unless economic effective incentives, e.g. electricity/fuel prices or inherent costs, would change dramatically. - Ports operate on a competitive market; hence infrastructure investments are matched against anticipated income, very few ports are willing to undertake the risk of increased costs without utilisation of OPS unless it is a strict legal requirement and somehow subsidised by the community (e.g. the case of Stena and Color Line not being able to connect in Kiel). - It is not a “chicken and egg” situation. It is clear to the investigators that shipowners can use shorepower and benefit from it, if provided in port, however it is unlikely that they would take the initiative to these investments. - If the incentives or pressures are strong enough, ship owners a very likely to adopt OPS. One could draw parallels between the changes in market conditions caused by the introduction of the SECAs and the possible future mandatory OPS in the North Sea area. - It makes sense to think of the positive effects of common European regulation schemes in order to achive the critical mass for OPS and to avoid competitive issues that today indirectly prevents tackling pollution and emissions in Europe. There is considerable uncertainty amongst ports and ship owners regarding the future uptake of OPS. In this situation, the EU and national governments will be key to any large-scale adoption of the technology by providing regulations and incentives for investment. Experience shows that ports and ship owners in the North Sea region that have concrete experience of OPS are predominantly positive about the investments, although some stakeholders question the real environmental benefit of OPS. To create a mutually beneficial OPS solution it is imperative that ports co-operate closely with the ship owners (as well as with other relevant stakeholders) to agree on an acceptable business model and technical solution. 9.5 Type of traffic The key to finding a viable balance between commercial interests and reducing the negative environmental impact of shipping is to ensure that investments are made where the maximum environmental benefits are achieved with a minimal disruption of commercial activity. In the case of OPS this means that one should focus primarily on short-sea liner traffic spending a considerable proportion of their time in port, which in turn would ensure a high utilisation of the investment. Due to the limited time in port and the equally limited calls per year in a given port as well as the significant power demands (implying great grid infrastructure investments) of cruise ships, it is questionable whether the relatively modest environmental benefit motivates the huge investment. On the other hand, in some locations the environmental problems are so dire that a solution must be found, in which case an investment in OPS still serves a purpose. One possible alternative to OPS that would not imply any onshore grid investment would be to employ a power barge to meet the needs of the cruise liners. In a large port like Hamburg it could also make sense to combine OPS with the power barge concept to increase flexibility while reducing infrastructural investments in the quays. 9.6 The public sector During the course of this research we have found that public bodies play a pivotal role in promoting or forcing through OPS investments in the North Sea region. At the intergovernmental level, the EU is an extremely important stakeholder. The EU has the legislative power to force through regulations, it may provide incentives such as tax reductions and it also has the economic means to promote co-financing for concrete 49 ONSHORE POWER SUPPLY (OPS) SURVEY OPS projects. It is clear that both DG Mobility and Transport (MOVE) and DG Environment are in favour of OPS and there is (and will be) considerable funding available to promote investments. In interviews with European Commission officials it has become clear that OPS is moving up on the EU’s agenda. In a similar fashion, governments, national and municipal authorities can also to a large extent shape the conditions favouring OPS. Sweden is an excellent example where the national government has used the power of the “stick” (in the form of strict environmental legislation) but also the “carrot” (in the form of tax reductions and some municipal co-funding of OPS). In Norway and Germany, the public sector is also promoting OPS. OPS is an issue requiring considerable co-operative efforts by a large number of stakeholders, not only in a given port location, but in the case of liner traffic also with other ports. Both the shipping industry and to some extent also the port sector are heterogenous and do not have a very impressive history of co-operation. International players such as the EU and/or regional co-operation bodies can play a very important role in bringing this fragmented group of stakeholders together to discuss the issue. The CNSS project itself is a good example of how EU funding may foster closer collaboration amongst a range of stakeholders all joined by the mutual vision of creating a more environmentally friendly shipping sector. In short, at this relatively early stage of technology deployment, international organisations and national governments must show the way and provide incentives for the market to take off. It is likely that there needs to be a critical mass of ports in a given region or trade for a large number of ship owners to voluntarily want to invest in OPS. Since the benefits of OPS must be evaluated on a case-by-case basis it is also important for the public sector to offer technology-neutral incentives to ship owners, i.e. in the form of lower emissions targets, instead of forcing them to use a technology that may not give the desired impact. For instance, ESPO is positive towards OPS but they remain adamant that it must be up to the market to choose the most suitable technology to reach the required emission reductions. 50 9.7 Technical aspects The OPS technology, has been tested and implemented, is readily available and functionality is proven in numerous installations. From what we have gathered, incidents like blackouts are practically unheard of. From a technical and operational perspective, all current users are satisfied in terms of system reliability and general performance. Retrofit of existing vessels (e.g. with a containerised OPS solution) or installation on a newbuilt vessel is viable. One major step towards a wider adoption is the recently agreed technical standard. Though offering some flexibility on several key issues (voltage, frequency, etc) it is vital to have a standardised installation format in order to roll out the technology beyond the customised one-operator set-ups like Stena’s. As two incompatible A/C frequencies (50 and 60 Hz) occur regularly, a port considering an OPS installation has two options – either a customised setup with a one-frequency installation, or a dual frequency configuration. Unless an installation is specifically intended for a limited number of specified vessels using one frequency, a dual frequency set-up would be preferred to ensure availability, which would consequently have a positive impact on utilisation. Any installation will mainly comprise of standard components, ensuring availability and relatively low cost. It is the application and combination of components that is relatively specialised. The knowhow to design an OPS installation exists with multiple suppliers, catering for a competitive environment thus reducing cost. One possible challenge ports may face is that of upstream grid capacity. Investments are impossible to generalise, however any reinforcement is expected to be costly and requires significant co-ordination and interaction between the port authority and the grid owner. 9.8 Commercial / Cost / Investment aspects From a ship owner’s perspective an evaluation to invest in OPS needs to consist of the following considerations: − Time at sea vs. time in port − Cost of bunkers for onboard electricity production − Cost of maintenance, repairs etc for onboard electricity production − Cost of electricity while at berth − Installation cost As most sources indicate that onboard production of electricity costs around one third more than the shoreside grid price, subject to power supplier mark-up, an investment will pay off. The cost reduction per consumed kWh needs to be weighed against the investment, and based on the expected average time spent at berth a pay-back time can be calculated. Though different theories exist, it is not unlikely that the upcoming restrictions on sulphur emissions in the Baltic Sea will affect the local bunker prices, as demand for low sulphur fuels will increase drastically. As electricity prices are unlikely to be similarly affected, the difference in price will increase even further, thus making OPS a more attractive solution. For a port, the investment evaluation will be slightly different. The port will have an opportunity to profit on supplying electricity, however too big a mark-up may affect usage. Depending on the traffic type on the port and average coverage on the berths, an investment utilisation can be estimated. A high proportion of transshipment in a port could indicate that the port is geared towards primarily global traffic. On the one hand, this means that vessels are likely to spend limited time in port in relation to time at sea, thus reducing the commercial argument for investing in OPS. On the other hand, vessels engaged in global liner operation typically trade on fixed routes, which could lowers the investment threshold. slightly more complex than that of the ship owner, seeing as the port will need to decide on service level, expected maximum output etc based on forecasts of conditions further away frpom their own reach, rendering the information less certain. The cost for grid re-inforcement will of course be a central part in any ports’ investment analysis, and as previously mentioned it will inevitably vary from port to port. From a business perspective, a reduction of noise and emissions from a port could result in expansion of the port’s activities, whereas it could be difficult to get the required permissions for such an expansion should noise and emissions grow along with the port. 9.9 Environmental benefit A large number of studies from around the world show that there are significant local environmental gains to be made from deploying OPS in ports. The environmental impact is primarily local rather than global, although if applied on a massive scale OPS will contribute to a decrease of CO2 emissions. As research from Hamburg shows, calculating the potential reduction in emissions to the air specifically by implementing OPS is extremely complex. There are a large number of variables that need to be taken into account (e.g. other sources such as pollution from road), which requires very advanced modelling tools and a large amount of accurate data of ship movements and vessel time at berth. The condition and age of the ship engine also plays a role, as does the possible impact of other emission-reducing technologies onboard such as scrubbing or Selective Catalytic Reduction. In the North Sea region it is interesting to see that in some locations noise pollution rather than air quality seems to have been the main problem driving the decision to invest in OPS technology. In Stockholm, noise pollution in residential areas in proximity of the port cause problems for urban development plans, whereas in Hamburg air quality is the primary driver. The decision-making process could be assumed to be In regard to the source of electricity used through OPS 51 ONSHORE POWER SUPPLY (OPS) SURVEY installations, all interviewees claim that they buy/will buy renewable power. The main question to keep in mind when evaluating the environmental benefit is how many kwh of electricity is generated by renewable sources onshore instead of by auxiliary engines onboard. Hence, the longer time in port, the higher environmental impact of any given OPS installation. Although some might argue that instead of investing in OPS it is better to save the money to invest in more efficient and higher-impact solutions like LNG that will become commercially viable in the future, it is imperative to act on all levels to solve the pressing local and global environmental problems. Although some might argue that instead of investing in OPS it is better to save the money to invest in more efficient and higher-impact solutions like LNG that will become commercially viable in the future, it is imperative to act on all levels to solve the pressing local and global environmental problems. The alternative fuel LNG in combination with OPS is the most sustainable and availiable option for the future. The figure below describes and argues: 9.10 Status in the North Sea Region In the North Sea region many ports are working hard to improve their environmental performance and OPS is one of a range solutions that may improve the environment. The environment is indeed an important issue for North Sea ports, however we have found that OPS is far from the top priority for most ports. There are currently very few installations in place and the great majority are located in Sweden, which largely has to do with strict environmental legislation. However, many other ports across the region are in different stages of progress towards implementing OPS technology. Interesting examples include Norway, Germany and the Netherlands. In the great majority of cases it is the port or the local authorities that have provided the main driving force behind realising the investments (in Sweden often based on legal requirements). In regard to CSR as a primary driver, the FinnoSwedish company Stora Enso has been progressive in regards to placing demands on its transport supply chain to provide OPS. Today CSR probably has a greater impact on the business of a cruise liner, the customers of which are holiday-makers, than on that of a container vessel in the logistics supply chain, which is further away from the “end-consumer”. 52 10. Main findings Shipping continues to significantly contribute to local pollution and global emissions. 10.1 Regulatory issues Although the technology has been available for a long time, only a very small fraction of the ports in the CNSS region (and globally) provide OPS as an option for ships during port calls. - Given the competitive pressures in the shipping industry, and the lack of sector coordination amongst ship owners, regulation is the only way forward if the society requires a large-scale implementation of ship to shore installations. OPS is not a “chicken or egg” question and society must lead the way in solving environmental problems. There is increasing interest in OPS as an important tool in combating local pollution, however the results of the incentives and regulations provided by the public sector in the North Sea Region has so far been very poor (with the exception of Sweden). When comparing OPS with other solutions we need to have a long-term view of the investments (e.g. to 2050). In this perpsective, OPS makes a lot of sense considering that fuel oil prices are likely to increase and that shipping ultimately must take responsibility (and pay) for its CO2 emissions. In addition, one could see OPS as part of the general trend of an “electrification of society” and of transport in particular. Below follows a list of our main findings, divided into four main categories, i.e regulatory, environmental, commercial and technical issues. - The European Union is committed to promoting OPS technology and it is expected that the future implementation of the Directive on Alternative Fuels will result in wider deployment. - It is problematic that the SECA does not apply to all of Europe. This creates an uneven playingfield and makes it harder to deploy more environmentally friendly solutions like OPS, that sometimes require significant investment. - In terms of regulation, as far as practically possible, the same conditions regarding OPS should apply for all ports to avoid competitive issues that ship owners can take advantage of. - The public sector, in the form of the EU, nation states and local authorities have the dual power of the carrot and the stick. It can provide effective incentive schemes, e.g. differentiated port dues that favour ship owners that have invested in OPS. Strict environmental legislation, as in the case of Sweden, has also proved to be very effective. - Taxation is also a tool that society can use to make it more commercially viable for ship owners to choose shorebased power. The current situation places a tax obligation on electricity generated on shore while fuel oil burnt on ships carry no such tax. This might change very soon though, due to the amendments to the European Tax Directive. - Environmental indices like ESI and CSI can be very effective if developed in line with the future cost of emissions and pollution. Their design could be improved to further incentivise the various shipping stakeholders. 53 ONSHORE POWER SUPPLY (OPS) SURVEY - It is difficult for society to regulate and influence the shipping sector due to its inherently international nature. Making OPS mandatory for ships calling at European ports would be one way to impose more environmental control over the sector, bringing at least a part of its emissions under the CO2 trading system. 10.3 Commercial aspects - For the ship owner, the key priority is to maintain a stable revenue stream. - Ship owners are sensitive to the needs of their cargo customers. The various shipping indeces could provide efficient tools to motivate customers to demand OPS from their transport suppliers. 10.2 Environmental perspective - OPS is the only clean shipping technology that reduces all pollutants (NOx, SOx, PM and CO2) and is compatible with MARPOL Annex VI. - Local communities can influence the shipping community by introducing OPS e.g. through the application of differentiated port fees, which promotes the use of more sustainable solutions. - It is clear that the use of OPS will reduce the amount of local emissions from ships at berth but we acknowledge that electricity generation may produce emissions of pollutants elsewhere, depending on the power mix. Nevertheless, it may be easier to mitigate emission and pollution from large land-based power generation stations than locally onboard ships due to better filtration techniques and regulation. - The environmental impact of OPS is dependant on the size of the ship, the number of hours spent at berth and the frequency of port calls. It is important that priority is given to the ships causing the largest emissions. Hence, it is important to always carry out a proper environmental cost-benefit analysis. - OPS is more effective if it is used on a large scale. To be truly effective ships equipped with the technology must be able to connect during all (or most) port calls. - It is important to bring CO2 on the global emissions agenda in shipping. 54 - Although the situation varies greatly between different port locations it is currently difficult to finance infrastructure in ports without support from the public sector. Most current OPS installations are financed through a mix of different sources (local authorities, EU, ship owners, etc.). - Differentiated port dues can provide good incentives for OPS, both for the port and for the ship owner. - To stimulate investment specifically 0n the ship owner side, the idea of a European fund, based on the principle of the Norwegian NOx fund, would be interesting. Ship owners would then have to pay a fee based on its emissions (e.g. according to 2021 Tier III level), but then be able to apply for grants from the fund to pay for investments aimed at emission reductions. The Norwegian fund has proved very effective in reaching targeted and measureable effects and promoted technology transfer in the industry. Such a fund could be technology-neutral or specifically aimed to promote OPS. - The combination of an emissions fund and differentiated port dues would have double effect (providing both the carrot and the stick). - In a commercial perspective, there are large differences between different types of traffic, e.g. cruise ships differ from cargo ships due to higher power demand, CSR issues are more important (cruise customers demand “clean” travel) and public pressure is greater (due to their “visibility” in local communities). - Ferries and RoRO (frequent callers) are particularly suited to use OPS (due to their higher rate of utilisation) - Ship owners should seriously consider OPS for both environmental and economic reasons. Ship owners must prepare for stricter environmental regulations, which are highly likely to be enforced in the medium to long term. In regard to the current price of auxiliary fuel versus electricity from the onshore grid it is already now significantly cheaper per kwh. Provided that shore-side connections are readily available in ports, the pay-back time for an onboard installation is relatively short, e.g. about two years for a 2500 lane meter RoRo vessel with 30% of its operation in port.150 150 10.4 Technical issues - The global technical standard is sufficient and has solved the main incompatibility issues. - More trade specific standards would be beneficial, regarding maximum energy output, frequency harmonization and standards in physical placement of the HVSC on the ship and the quay respectively. - Further work is needed to create a communication protocol standard (safety, training, etc.). - Three innovations increase the flexibility around OPS: semi-transferrable systems, containerised OPS and the power barge (power generation by alternative fuel, LNG) Calculated on the Dutch electricity price in 2011 (source, Eurostat) 55 ONSHORE POWER SUPPLY (OPS) SURVEY 11. Findings 11.1 Introduction The following findings will help us to reach a reduction in exhaust gas emissions from ships. 11.2 Regulatory issues - It is generally recommended to increase the OPS infrastructure investment in harbours by regulation and effective incentive schemes - The same tax regime should apply for onshore power as for fuel oil within all EU / EEA ports. - Differentiated port dues should be mandatory and standardised for all ports in Europe. - Reduced port fees for OPS users should compensate for the (potentially) higher price of electricity generated onshore compared with energy produced on board. - Promote same conditions for all ports – better cooperation between ports to avoid competitive issues that ship owners can take advantage of. 56 - Extend the SECA’s to the surrounding areas of the North Sea for environmental reasons and to even the playing field between ports operating in different regions. - New built vessels should be prepared for HVSC according to required and harmonised standards. - Introduce a CO2 quota for ships calling at European ports - Public bodies should keep the rate of utilisation as the most important criteria when choosing which ports should receive co-funding for OPS investments. Thus, it seems reasonable to focus their efforts on frequent liner traffic to maximise system utilisation. - The public sector at EU, national and regional level as well as collective port associations have an important role to play in promoting pragmatic and solution-oriented co-operation and dialogue between ports and ship owners to make informed investment decisions regarding OPS. 11.3 Environmental issues 11.5 Technical issues - Create an EU standard for NOx and PM emissions from shipping - A standard communication protocol needs to be established in order to control the OPS connection from the ship. - Establish a European fund based on the idea of the Norwegian NOx fund, supporting the retrofitting of ships with the aim of reducing NOx and PM. - Each port should implement an Emission Management Plan which - puts priority on the bigger pollution sources (e.g. cruise, ferries) - is based on EcoPorts or an equivalent approach 11.4 Commercial aspects - Differentiated port dues should become mandatory in European ports (see above) - Further development of the existing Shipping Indices in relation to OPS - All new built ships should always be fitted with OPS - The location of the HVSC connection on the ship should be standardised - Ports, shipowners, designers, shipbuilders and HVSC technology suppliers should continue the work towards harmonisation of the technology more intensely globally, considering both retrofit and newbuilt vessels. - It is recommended to implement stricter standards, use and operation of the existing technology, from used frequency and max output, trade-specific (type of vessel berth etc), physical placement of installations to communication protocols for the phasing in and out of the powergrid on arrival and departure of the berth. - Explore the idea of a European clean shipping fund (similar to the Norwegian NOx-fund), to make shipping responsible for the costs of pollution and to stimulate investment in cleaner technologies, incl. 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List of interviewees and references Port authorities, municipal and regional authorities Stockholm Rotterdam • Gun Rudeberg, Head of Environmental Affairs, Port of Stockholm • Ilka Ringdahl, Technical Manager, Port of Stockholm • Per Blomstrand, Deputy CEO, Stockholm Stad AB • Maurits Prinssen, Project manager Sustainable Development, Port of Rotterdam Gothenburg • Susanne Dutt, Sustainability Manager, Port of Gothenburg Ystad • Björn Boström, CEO, Port of Ystad • Cecilia Ejlertsson, Environmental Manager, Port of Ystad Trelleborg • Ulf Sonesson, Technical manager, Port of Trelleborg • Sten Björck, local politician (Social Democratic Party), City of Trelleborg Skåne Regional Council • Thomas Ney, Infrastructure strategist Wallhamn • Tedd Juhlin, Port Captain 60 Copenhagen / Malmö • Bengt-Olof Jansson, Chief Technical Officer, Copenhagen/Malmö Port Authority (CMP) Hamburg • Kay-Uwe Mathiessen, Dept. for Emission Control and Firms, Ministry of Urban Development and Environment (BSU) • Hendrik Hollstein, Environmental Strategy, Hamburg Port Authority • Ines Bewersdorff-Behrens, Dept. for Emission Control and Firms, Ministry of Urban Development and Environment (BSU) • Klaus de Buhr, Dept. for Emission Control and Firms, Ministry of Urban Development and Environment (BSU) • Suzanna Fistric, Cruise ship consultant, Ministry of Economy Transport and Innovation • Hape Schneider, Executive Assistant, HafenCity Hamburg Gmbh European Union Ship owners • Pieter de Meyer, Policy Officer (Ports and Inland Navigation), Directorate General for Mobility and Transport (MOVE), European Commission • Frederik Neuwahl, Policy Officer (Industrial Emissions, Air Quality & Noise), Directorate General for Environment (ENV), European Commission • Ingemar Sörensson, Stena Line Scandinavia, Ship Management • Dick van der Ent, Stena Line Rotterdam • Leif Holmberg, Transatlantic, Technical Manager • Joachim Lund, Thun Tankers, Chartering Manager • Hans Lindgren, Furetank Chartering, Operations • Josefin Lundgren, Maersk Tankers, Technical Superintendent • Ken Dorn Hansen, Maersk Tankers, Fleet Group Manager • Gustav Lind, Maersk Tankers, Operations • Jorgen Hansen, Maersk Line, ex Maersk Marine Technology • Gert Jakobsen, DFDS Research • Volker Matthias, Head of Department, Chemistry Transport Modelling, Helmholz-Centrum Institute of Coastal Research • Armin Aulinger, Scientist, Chemistry Transport Modelling, Helmholz-Centrum Institute of Coastal Research • Alan Murphy, Newcastle University Sector organisations • Antonis Michail, Policy Advisor and EcoPorts Coordinator, European Sea Ports Organisation (ESPO) • Richard Ballantyne, Senior Policy Advisor, British Ports Association Grid companies and electrical power experts • • • • • • • Tommie Lindquist, PhD, Swedish National Grid Jan Kärnestedt, Gothenburg Energi Göran Lundgren, GL Add Wise Erik Lindén, Remigium AB Tomas Lust, Marine Global Group Ingemar Gustavsson, Processkontroll Elektriska Lorene Grandidier, Schneider Electric. 61 Photo: Volker Matthias ONSHORE POWER SUPPLY (OPS) SURVEY 62 63 FINAL REPORT KEY FINDINGS AND RECOMMENDATIONS CNSS: Competitive Marine Transport Services and Reduction of Emissions – a North Sea Model www.cnss.no Photo front XXXXXX LEAD BENEFICIARY