The global shore power market size was valued at USD 1.45 billion in 2022 and is projected to reach USD 3.8 billion by 2031, registering a CAGR of 11.3% during the forecast period (2023-2031).
Shore power, sometimes known as cold ironing, is a mechanism that lets ships turn off their engines and connect to the electrical grid while docked. This method offers an environmentally favorable alternative to using auxiliary engines while ships are berthed, which release damaging pollutants and greenhouse gases.
Shore power market growth is anticipated due to driving factors such as an increase in the number of luxury ships in the shipping industry and the establishment of retrofit shore power systems during the projected period. The cost of setup and maintenance impedes the growth of shore power demand. Initiatives by the government to decrease greenhouse gas emissions from ports present substantial prospects for the shore power market. The high maintenance and installation costs of shore electricity impede the market's growth.
Environmental Regulations and Sustainability Initiatives
Governments and international organizations have enforced stringent environmental rules to decrease greenhouse gas emissions and air pollution from ships, driving the maritime industry to employ shore power alternatives. Shore power promotes the transition to cleaner and greener maritime operations and coincides with sustainability goals. In California, for example, environmental rules promote shore power development. The California Air Resources Board (CARB) has severe restrictions to reduce emissions from ships anchored at California ports. The "Shore Power for Ocean-Going Vessels Regulation" requires container ships, passenger ships, and refrigerated cargo ships to utilize shore power while docked in California. In addition, several regions and countries, like the European Union, China, and South Korea, have implemented or are considering similar environmental rules to minimize ship emissions. These restrictions foster the expansion of the shore power sector by requiring shipping businesses to comply with the regulations and embrace cleaner, more sustainable practices.
High Setup Cost
Implementing shore power systems at ports and terminals necessitates significant infrastructure investment, such as establishing electrical connections, improving power distribution systems, and providing ships with appropriate shore power equipment. The initial startup cost can be a substantial obstacle for some ports and shipping businesses, particularly those operating in poor countries or with limited budgets. Port X, a major container port in a developing country, intends to install shore electricity to reduce greenhouse gas emissions and meet environmental laws. However, the port suffers financial limits due to other infrastructure development projects, and the expense of constructing shore power infrastructure becomes a hurdle.
According to IMO research, the average cost of providing shore power at a single berth can range between USD 2 million and USD 5 million, depending on the port's size and electrical infrastructure requirements. The cost for big ports with several berths can approach tens of millions of dollars. Thereby leading to a decline in shore power market share.
Retrofit Shoreline Installation
Shipping companies are putting marine power on their new ships and making changes to their old ones because more and more ports have it, and the rules are changing. More money will be spent on updating the ports, which will boost its demand on the market. For example, in October 2019, Global Ports Holding began running the ship port in Nassau after investing USD 250 million to increase the port's capacity and fix up the old one. Antwerp, Bremerhaven, Hamburg, Haropa Port, and Rotterdam made a joint statement in June 2021 about zero-emission shipping as part of their green ports plan. The ports said there was a strong business case for retrofitting or equipping big container ships with shore power and that these ships were ready to use cold ironing. So, growth will be helped by adding more platforms and installing retrofit systems at the port.
The global shore power market is segmented based on connection, installation, component, and region.
The connection segment is further segmented into Shipside and shoreside for better understanding.
Shoreside holds the major share of the market.
The shoreside connection refers to the equipment and facilities at the port or dockside that supply electrical power to the ships. This entails installing shore power outlets or receptacles on port infrastructure so vessels can connect to and draw electrical power from the grid while berthed at the port. Shoreside connections ensure ships have a consistent and efficient power supply. They may turn off their onboard generators and rely on cleaner, more sustainable shore electricity while parked.
The equipment and infrastructure built on the vessel to permit the connection to the shore power supply are referred to as the shipside connection. This covers the onboard power reception systems and related components that allow the ship to receive power from a shoreside source. Shipside connections are normally made using power sockets or plugs on the vessel that are compatible with the port's shore power infrastructure.
The installation segment can be further bifurcated into New installation and retrofit.
New installation leads the market.
Integrating shore power infrastructure into newly constructed ports or terminals is a new installation. When a new port or terminal is constructed and built, shore power technology can be part of its infrastructure. This entails building and installing the electrical equipment and connections to supply shoreside power to berthed vessels.
Adding shore power infrastructure to existing ports or terminals not initially intended with such technology is retrofitting. In other words, retrofitting entails updating or changing port facilities to allow vessels to receive shore electricity.
The component segments can be further classified into Transformer, Switchgear, Cables and Accessories, Frequency Converter, and Others.
Frequency converter owns the highest share in the market.
When the frequency of the electrical power provided by the onshore grid differs from the vessel's typical operating frequency, frequency converters are used. These converters alter the frequency to match the ship's needs, allowing for continuous power supply during port calls.
Switchgear is the electrical equipment used to control, safeguard, and isolate electrical circuits. Switchgear is used in shore power installations to manage the power supply to vessels, guaranteeing seamless and safe switching between the shore power source and the ship's onboard power system.
The global shore power market research is analyzed in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.
Asia-Pacific is predicted to rise at a substantial CAGR of 11.6% throughout the forecast period, owing to growth in port terminals and expenditures in strengthening marine infrastructure. According to the Ministry of Transport, the container throughput capacity of China's major ports increased by 5.3% in 2018 over the previous year, amounting to around 250 million standard containers. Furthermore, China boasts seven of the world's ten largest ports in terms of yearly freight and container traffic. More investments are being made in the ports of Shanghai and Qingdao to develop shore power systems, increasing market demand for this energy and reducing air and noise pollution. Key players include China. The country is working to reduce port air pollution and carbon emissions. One of China's biggest ports, Shenzhen, has shore power facilities to connect docked vessels to onshore electricity. This effort has reduced port air pollution and greenhouse gas emissions. Japan, South Korea, Singapore, and Australia have supported shore power schemes to accomplish sustainability goals. To accommodate eco-friendly ships, several ports are adding shore power facilities. As more Asia-Pacific ports invest in shore power infrastructure, technology, equipment, and service providers should benefit.
Europe holds a sizeable global market share and is expected to boost at a CAGR of 11.2% during the forecast period. Europe accounts for 90% of seaborne trade, considerably expanding the marine industry. Major European countries rely heavily on maritime transportation. The European Commission says almost 400 million passengers board and disembark at European ports yearly. Furthermore, the marine industry contributes significantly to the European economy's jobs and income. European countries have actively promoted shore power ventures through regulatory regulations and financial incentives. To reduce emissions, the European Union's Directive on deploying alternative fuel infrastructure, for example, contains provisions for shoreside power for maritime ports. Many EU countries, like Germany, Sweden, and Norway, have enacted particular legislation to encourage the use of shore power. According to a European Union report, the usage of shore power in European ports is expected to increase significantly in the next years, helping the EU meet its emission reduction targets. According to the survey, more than 20 major European ports have already established shore power facilities, with many more planned to do so shortly.
The North American area is also expected to have a large market share. According to the Bureau of Economic Analysis, trade imports of goods and services into the United States climbed to USD 264.9 billion in 2018. The Environmental Protection Agency (EPA) and the Coast Guard in the United States have been actively pushing shore power programs through various regulatory measures. Ports like the Port of Long Beach and the Port of Seattle have invested in shore power projects to meet state and federal emission reduction targets. As a result, rising transportation costs and rising investments in marine trade and transportation are estimated to boost the market throughout the forecast period.
While shore power is still in its nascent stages in the Middle East and Africa, and Latin America region, there is rising awareness of its benefits regarding environmental preservation and sustainability. Several countries in the region have begun conversations and studies to assess the viability of adopting shore power solutions at their ports. For example, the Dubai Maritime City Authority in the United Arab Emirates has expressed interest in investigating shore power infrastructure to reduce carbon emissions from ships in the Port of Dubai. Other countries in the area, including Egypt, Oman, and Saudi Arabia, are considering similar schemes.
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