Economics of shore power for non-liner shipping: socioeconomic appraisal under different access pricing

Axel Merkel (), Erik Nyberg (), Karin Ek () and Henrik Sjöstrand ()
Additional contact information
Axel Merkel: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden
Erik Nyberg: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden, https://www.vti.se/en/employees/employees/erik-nyberg
Karin Ek: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden, https://www.vti.se/en/employees/employees/karin-ek
Henrik Sjöstrand: Swedish National Road & Transport Research Institute (VTI), Postal: Dept. of Transport Economics, P.O. Box 55685, SE-102 15 Stockholm, Sweden, https://www.vti.se/en/employees/employees/henrik-sjostrand

No 2022:6, Working Papers from Swedish National Road & Transport Research Institute (VTI)

Abstract: The provision of shore power to ships at berth is recognized as an effective measure to reduce the external costs of maritime transport. However, the deployment and uptake of shore power technology is subject to barriers, part of which have to do with insufficient economic incentives for providers and users. Regulatory proposals in the EU have targeted liner shipping segments to be covered by a shore power mandate. There is much less discussion and research focused on other segments of shipping, though these represent a significant share of at-berth emissions. This study uses maritime traffic data and a relatively simple modelling framework to analyse whether public investments in shore power deployment, coupled with added incentives to shipowners, could be socio-economically beneficial. The analysis is focused on maritime traffic in the Swedish port network, but the main findings can likely be generalized beyond this context. We find that investing in (or mandating) the provision of shore power in ports can be socio-economically beneficial also when aimed at segments typically classified as non-liner (or “tramp”). The results do not however indicate that network-wide deployment of shore power is justifiable, but rather that care must be taken to determine the cost-efficient size of the network as well as to design the network of shore power deployment in ports so as to reap benefits of network effects. We also find that the pricing of shore power access has a major impact on expected uptake and consequently on whether or not shore power investments yield benefits in proportion to costs. Crucially, we find that unregulated profit-maximizing pricing by ports leads to significant welfare losses by suppressing take-up among shipowners.

Keywords: Shore power; On-shore power supply; Infrastructure pricing; Cost-benefit analysis; CO2 emission reduction (search for similar items in EconPapers)
JEL-codes: Q41 R40 R42 R48 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2022-11-16
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
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