Optimal shore power adoption decisions with government regulation considering port competition

Bo Lu, Xin Xu, Xiaomeng Qin and T.C.E. Cheng

Transportation Research Part E: Logistics and Transportation Review, 2024, vol. 188, issue C

Abstract: With the shipping industry’s focus on greenhouse gas (GHG) reduction, shore power (SP) emerges as a pivotal yet underutilized solution. The existing literature, based on the inappropriate assumption of ports adopting SP fully, focuses solely on the influence of subsidies on SP adoption. By comprehensively considering the impacts of various regulations, we construct a game model to explore the optimal SP adoption rates of competitive ports, treating regulations as exogenous factors. Considering ports’ service quality differences and government regulations, we find there is a positive correlation between the SP cost and SP adoption rate of the port with low service quality. Specifically, the low-quality port can strategically increase adoption of SP to gain a competitive edge. We suggest a balanced approach to regulations, advocating targeting ports with extreme government regulations coefficients, and focusing on shipping companies with moderate coefficients. A key insight is the setting of the emissions standards at a level between the emissions of competing ports. Importantly, we uncover a nonlinear relationship between the SP adoption rate and emissions reduction effectiveness, highlighting the complexity of the environmental impact. Our findings provide reference for SP adoption decision-making at ports and formulating government regulations.

Keywords: GHG reduction; Shore power; Port competition; Government regulations (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.tre.2024.103629

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