Onshore power supply: caught in a chicken and egg situation

by Gert van Wijland | 28 March, 2013

The EU is mulling ways to get ships to use onshore power instead of diesel generators when they are in port. Onshore power supply (OPS) can play a key role in improving local air quality and cutting noise pollution in port regions, as well as being an effective weapon in the battle against climate change. On many inland waterways in Europe berthed vessels are already prohibited from using onboard generators. Following the lead of US states such as California, Europe is now weighing the introduction of a similar ban for maritime shipping. But the initial investment involved is substantial for both ship owners and infrastructure providers and that’s why both are holding back. An EU-wide directive could break the impasse, experts say. But the European Commission won’t go that far – yet. For now, it’s mulling tax breaks.

Barge operators on Europe’s major inland waterways are making the switch to onshore electricity: after coming into port in, say, Rotterdam or Zwijndrecht they berth, roll out a power cable and plug it into an onshore power supply point on the quay. Using their mobile telephone or smartphone they activate the link and voilà: the air conditioning, lights and refrigerators have power without the on-board generators having to run day and night. The electricity used is billed automatically.

There are obvious benefits to the local environment of not having diesel-powered generators throbbing onboard ship day and night, but Europe also views OPS as a major weapon in the battle against greenhouse gases. The European Commission’s Directorate General for Mobility and Transport (MOVE) is mulling stricter measures to force mandatory use of onshore power, says policy official Torsten Klimke. ‘Due to the current lack of onshore power supplies, ships berthed in deep-sea harbours often have no option but to use onboard power generators to keep lights, heating and cooling going’, he says. ‘Air quality would improve if electricity were generated by power plants outside the port. That would also reduce noise and could cut carbon emissions if the electricity came from a green source.’ The department hopes OPS can play a role in boosting local air quality and cutting noise pollution in European harbours and deep-sea ports such as Rotterdam, Gothenburg, Hamburg and Antwerp.

Other EU directorates general have also embraced the idea of OPS

The power consumed by a seagoing vessel is easily thirty times that of an average household, with cruise vessels gobbling up the equivalent of an average household’s annual consumption every single day

and have put up funds for its implementation. The European Commission’s regional development fund is subsidising port areas throughout Europe, such as Gothenburg, Antwerp, Lübeck (Luebeck) and Gdansk. One such recipient of EU funding is the Dutch province of South Holland with its Rhine and Meuse delta regions. ‘Thanks in part to this funding we were able to make OPS available, so last year the ports were able to introduce a ban on the use of generators. That makes a huge difference in terms of emissions and noise pollution’, says the province’s spokesman Gerard Hofstede.

The investment came to a cool €450,000 for 120 connections. Annual costs of operation, management and maintenance of the power points tot up to around €100,000. ‘The province has signed a service agreement with market players from the energy sector to deal with defects and malfunctions in the power unit’, says Hofstede. Those responsible in the event of an accident – late last year a skipper in Delfshaven port near Rotterdam was severely injured by electrocution – is still up for legal debate, he says.

The medium voltage lines to the ports are generally managed by the regional network administrators. The power is supplied by energy producers like Eneco in the Netherlands, Electrabel in Belgium and Energa in Poland.

Carrot and stick

Despite all local government efforts, skippers were initially hesitant to switch to onshore power supplies. The fear of high costs and the hassle of dragging cables about meant that the onshore power units were unpopular. Teething problems with regard to earthing and limited availability also made it difficult for port authorities to enforce the ban.

But use of OPS started to take off when the Rotterdam port authority persuaded other ports and local government authorities to switch to a ‘carrot and stick’ approach. Vessels using OPS for the first time are aided by a special service team which makes a quick scan of the vessel installation to check for potential malfunctions and solve any problems. Vessel captains could then no longer fall back on the argument that OPS ‘didn’t work’ and so port authorities were able to enforce the ban.

‘That was an enormous help’, recalls Daan Bos of Utiliq, energy giant Eneco’s innovation subsidiary. Utiliq specialises in smart metering solutions, geared to supplying what Bos refers to as ‘nomad power’. The company operates mainly in the Benelux but ‘we’re increasingly moving further downriver, into the European hinterland’, says Bos.

Lynchpin of the service is that on arrival and at departure the ships’ captains can switch the power on and off using their mobile phone.

The main obstacle is the business model – it must be feasible for both parties; for ports as well as shipping operators

Their power consumption in port is monitored, and billed automatically once a month. ‘So there’s no fussing with coin operation or cards with power credits’, Bos explains.‘Inland shipping has seen a major increase in OPS use’, he says. ‘Last Christmas there were 350 inland barges berthed with OPS, which amounts to almost full capacity utilisation. So we now have guaranteed demand, as a result of which the investments of our clients – ports and local authorities – will start generating a return more quickly.’

But the biggest environmental gains won’t come from inland shipping. It’s seagoing vessels that are key, says director Fer van der Laar of the World Ports Climate Initiative (WPCI), a global alliance of key ports against climate change. According to WPCI data, the power consumed by a seagoing vessel is easily thirty times that of an average household, with cruise vessels gobbling up the equivalent of an average household’s annual consumption every single day.

‘According to the available data, cruise vessels require up to 16 MVA (Mega Volt Ampere), container vessels up to 6.5 MVA and ferries and roll-on, roll-off vessels up to 3 MVA load’, says Van der Laar. ‘Energy consumption is calculated by multiplying the vessel’s power consumption (MW) by the total time (in hours) of consumption. That way you can see how OPS can significantly reduce carbon emissions.”

Vessel type	Average power demand (kW)	Peak power demand (kW)	Peak power demand for 95% of vessels (kW)
Container vessels (<140m)	170	1000	800
Container vessels (>140 m)	1200	8000	5000
Container vessels (total)	800	8000	4000
RoRo- and vehicle vessels	1500	2000	1800
Oil and product tankers	1400	2700	2500
Cruise ships (< 200 m)	4100	7300	6700
Cruise ships (> 200 m)	7500	11000	9500
Source: Shore side electricity. A feasibility study and a technical solution for an on-shore electrical infrastructure to supply vessels with electric power while in port, Chalmers University

Business model

Despite the clear environmental gains, implementation of OPS is slow to get out of the starting blocks in the maritime sector. MOVE’s Torsten Klimke can’t name a single commercially successful installation that’s up and running. ‘Various ports are hosting pilot projects, but as yet we’re not aware of any port authority that has an overall infrastructure in place’, the spokesman for the EU directorate general says.

Uwe Fuchs, OPS project manager at electronics giant Siemens’ head office in Germany, sees a wealth of opportunities for onshore power supply but adds he can see why sea ports aren’t offering it yet. ‘There is a host of opportunities for OPS in Europe, Asia and the US,’ he says. ‘

A classic chicken and egg debate is how Rob Winkel of international research agency Ecofys describes the situation in the sector

We’re monitoring them worldwide. But the main obstacle is the business model – it must be feasible for both parties; for ports as well as shipping operators. Particularly portside the investments are huge, because in most cases the required MW-power for the ships isn’t there. Depending on the location and the port’s infrastructure, several MW of power needs to be available in port. In addition you need to build substations, converter stations and cable management infrastructure along the quays.’

The biggest factor driving up investment and operating costs are the highly expensive transformers required to accommodate vessels from different parts of the world where voltage, power and frequency levels vary. ‘You need transformers because US ships have onboard electrical systems of 60Hz, while 50 Hz is the norm in Europe’, explains Joris Knigge of EDSO for Smart Grids, an organisation of European power distribution companies. ‘And the situation is further complicated by the fact that it’s difficult for energy suppliers and distributors to know exactly how much power is required and when. You don’t know when which ship is going to berth. On the other hand, you can’t opt for an infrastructure that’s powerful enough to sustain ten refrigerator ships linking up to the grid at exactly the same time. That’s simply unaffordable.’

Varying electrical frequencies

Electrical frequencies also differ depending on vessel category and size. Ocean-going vessels calling at European ports tend to be fitted with 60 Hz onboard electrical systems, while smaller vessels not used for intercontinental crossings usually have 50 Hz systems.

Vessel type	50 Hz	60 Hz
Container vessels (<140m)	63 %	37 %
Container vessels (>140 m)	6 %	94 %
Container vessels (total)	26 %	74 %
RoRo- and vehicle vessels	30 %	70 %
Oil and product tankers	20 %	80 %
Cruise ships (< 200 m)	36 %	64 %
Cruise ships (> 200 m)	0 %	100 %
Cruise ships (total)	17 %	83 %
Source: Shore side electricity, A feasibility study and a technical solution for an on-shore electrical infrastructure to supply vessels with electric power while in port, Chalmers University

A cost-benefit analysis conducted by the Gothenburg port authority supports Fuchs’ conclusion that onshore power along every quay simply isn’t feasible. The Swedish port has already installed onshore power along the quays used by Stena Line’s ferries. The same vessels berth here time and again, so there are no problems with compatibility and no need for expensive 50 to 60 Hz transformers. But so far there are no plans to extend OPS to neighbouring quays. According to the port authority’s assessment, while OPS could generate ‘relevant environmental benefits’ in the container sector for the costs involved in enabling ships to connect to quayside electricity supplies, ‘in the Car Terminal there is currently no major environmental benefit in relation to the cost of developing onshore power supply’. The cost-benefit ratio was even less attractive for the tanker port situated some distance away, the port authority’s analysis concluded.

According to that same report, a major bottleneck hampering the widespread introduction of OPS is that shipping companies will also be required to invest heavily in their onboard power systems. ‘The initial costs for developing onshore power supply options are high

As long there’s no demand, there’s no supply; as long there’s no supply it won’t generate demand

and in most cases it is only through the more general introduction of onboard OPS equipment that a real benefit can be obtained from investing in equipment onshore.. (...) for onshore power supply to be an effective preventive measure it is required that a large proportion of ships that berth are converted for onshore power supply and also connect to onshore electricity. (...) However in consideration of the substantial initial costs, this presupposes interest from ship owners/shipping companies and product owners to equip their ships for connection.’

‘A classic chicken and egg debate’ is how Rob Winkel of international research agency Ecofys describes the situation in the sector. ‘As long as there’s no demand, there’s no supply; as long as there’s no supply it won’t generate any demand. That’s because major investments are required on both sides – and you’ll only take the step once you’re sure that your opposite number is also completely committed.’

Obligation

According to Winkel, research shows that making it mandatory for ports to supply OPS and for shipping lines to use it would break the current impasse. A statutory obligation would solve the problem of underutilized onshore power units while at the same time making it more profitable to adapt ships’ onboard electrical systems. ‘Then a skipper isn’t doing it for just one or two ports, but for wherever he berths.’ For energy companies and related market players a statutory obligation also represents an interesting proposition because of the scale of the potential customer base.

As long as there are no binding EU regulations in place, Uwe Fuchs of Siemens Germany would like to see ports and vessel operators forge their own agreements. ‘In those locations where port and vessel operators have a close relationship, the projects are moving forward. In other locations the projects are on hold’, he says. ‘Commercially any OPS is a risk so long as there aren’t any fixed agreements between port and shipping operators.’

Several years ago Siemens itself took part in an experimental project in Lübeck, Germany, where the quays accommodating Stena Line ferries were equipped with OPS. But since then no new projects have been realized because they are too expensive. ‘For example, a cruise liner terminal with 12MW OPS is budgeted at around €8 million, including infrastructure.’ As such, voluntary implementation is asking too much in terms of goodwill on both sides, the Siemens project manager says. ‘Typically the return on investment is poor – such projects are driven principally by local authorities’ desire for ecological solutions.’

Like Winkel, Van der Laar and Knigge, Fuchs ascribes a key role to the EU in resolving the impasse. ‘The European Commission has issued regulations, but it hasn’t yet set up any authorities to monitor implementation. That makes it easy to circumvent the rules.’ Europe is currently rethinking the future of onshore power supply, says MOVE’s Torsten Klimke.

Harmonisation is now in its final stages

The initiative lies with the industry and its commercial partners, he emphasises. But he hints the EU may take a harder line in the future, given the poor response to earlier stimulation measures and the current absence of progress. ‘If local air quality doesn’t improve fast enough, the commission isn’t ruling out the mandatory implementation of OPS in ports coupled with an obligation for vessels to use it,’ he says. ‘After all, our initial recommendations on boosting air quality in ports through OPS date back to 2006.’ In 2009 the Commission again pushed for the introduction of OPS in ports, citing its importance in a paper on EU Maritime Transport Strategy to 2018. In addition MOVE has made funds available for infrastructure development and new techniques in the Trans-European Networks for Transport (TEN-T) initiative.

Harmonisation is also now in its final stages, with the International Standardisation Organisation having issued an ISO-standard for onshore as well as onboard electrical systems in July 2012. This standard, designated IEC/ISO/IEEE 80005-1, ensures that ships converting to OPS can use it in every port throughout Europe. ‘That way there are no additional costs or unnecessary investments’, Klimke says.

Tax breaks

Although it’s stopped short of making OPS mandatory, the EU is planning new stimulation measures. ‘In 2011 the Commission presented a proposal for a revision of the Energy Taxation Directive’, Klimke explains. ‘The proposal provides for an obligatory tax exemption on shore-side electricity over a period of eight years. The proposal is still being discussed by the Council’s working group on tax matters, with no final agreement having yet been reached. But currently Germany and Sweden have both implemented tax reductions on shore-side electricity used by ships berthed in port.’

The MOVE official believes the energy and shipping industries both support OPS and are eager to grab the opportunities it offers. But right now the directorate general is looking for more feedback on its proposals. ‘At present we lack an impact assessment on the implementation of OPS. Any stakeholder who has a vision on this is welcome to share it with us,’ he says.

But given the substantial investment required, can OPS ever compete commercially with a whirring generator? All the stakeholders say it can. Provided the infrastructure is fully utilized, the environmental benefits for ports and local authorities will outweigh the investment cost, so research agency Ecofys and others believe.

And it will also be a positive development for ship owners, believes Winkel of Ecofys, particularly if governments offer tax breaks. ‘When you compare diesel prices to electricity tariffs, it will turn out to be more economical for skippers to use onshore power than to keep their generators going day and night.’

While there are alternatives such as clean fuel generators, onshore power supply is seen as one of the best ways of improving local air quality, Klimke says, adding: ‘We definitely want to kick-start the implementation of this technique.’