Onshore Power Supply (OPS) Survey

Transcription

1 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

2 ONSHORE POWER SUPPLY (OPS) SURVEY Table of contents 2 1. Executive summary 4 2. Introduction About the CNSS project Objectives of this report Delimitations Disclaimer 7 3. Background Introduction The global context Stakeholders Legislative and political level Sector specific stakeholders Commercial stakeholders General policy framework on OPS Introduction International European port and shipping stakeholders Non-Governmental Organisations (NGOs) The European Union (EU) Regional level National level Sub-national level Municipal level Ports, ship owners and grid companies Shipping Indices Stakeholders: Summary and conclusion Corporate Social Responsibility (CSR) 24 4 Overview of available technical solutions OPS Introduction Low voltage connections High voltage connections Frequency Grid issues Other alternatives Technical aspects of OPS Ports Ships 29 5 Environmental impact of OPS Introduction Ship emissions in ports and at sea Noise reduction OPS a clean shipping technology? Environmental cost-benefit Mapping of OPS in the North Sea Region The North Sea Region National differences Sweden 36

3 6.2.2 Denmark Norway Germany Netherlands Belgium UK Conditions for different types of traffic Ferry/RoPax traffic Cruise traffic Global liner traffic Short-sea liner traffic Other traffic types Ship owners Status of OPS in ports in the CNSS area The commercial perspective Introduction Ports perspective Ship owner perspective Case studies Case study 1: Hamburg Case study 2: Stena Line Overall analysis Introduction Ship owners Ports The ship owner and port authority interface Type of traffic The public sector Technical aspects Commercial / Cost /Investment aspects Environmental benefit Status in the North Sea Region Main findings Regulatory issues Environmental perspective Commercial aspects Technical issues Recommendations Introduction Regulatory issues Environmental issues Commercial aspects Technical issues Bibliography List of interviewees and references 60 3

4 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 NO x, 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 CO 2 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 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 CO 2 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 4

5 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 CO 2 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 CO 2 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

6 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 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. 6

7 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

8 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 (SO x ), nitrogen oixides (NO x ), volatile organic compounds (VOCs), particulate matter (PM), carbon dioxide (CO 2 ) 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 This initiative is linked to the California At-Berth 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 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 Oakland 10. In the cruise industry there are several cruise line companies which can now connect 8

9 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. 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 Stakeholders Although OPS is an established technology and has been in use since the early 1980 s 13 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. 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 Legislative and political level 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 California Senate Bill No Legiscan website: (accessed on ) 3 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 % of a fleet s calls must be connected to shore power, 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. 5 Bankes-Hughes, L. Iron age spotlight on cold ironing, Bunkerspot Aug/Sept. 2009, 6 World Port Climate Initiative, 7 Paggie Leung. Cruise ships to get on-shore power supply. South China Morning Post, 19 July 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. 9 One such example is the ports of Stockholm and Barcelona. 10 World Port Climate Initiative, 11 They have all been awarded the Port of Seattle s Green Gateway Partner Award Luciano Corbetta, Cavotec, cited in CNSS presentation 22 November In 1984 the port authorities in Stockholm installed a low voltage OPS system for the Viking Line ferry. This system is still in use. 14 Interview with Thomas Ney, Region Skåne in south Sweden, The Länder government in Hamburg is actively involved in the plans to provide OPS for cruise ships in the port of Hamburg. 9

10 ONSHORE POWER SUPPLY (OPS) SURVEY 4. Municipalities: as the majority of ports in the North Sea region are municipally owned 16, 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 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 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 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 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 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 In Denmark the state owns or co-owns (as in the case of e.g. Copenhagen port) many ports. 17 Examples include Stockholm and Hamburg 18 ESPO Position paper on the taxation of electricity provided through Onshore Power Supply (OPS) systems Interview Bengt-Olof Jansson, CMP, : Copenhagen-Malmö Port Authority has investigated the possibility of providing OPS in central Copenhagen, which is a popular destination for cruise liners. 20 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 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. 10

11 Port authorities Ship owners Investors and financial institutions Grid owners and power companies OPS technology suppliers Regional authorities & municipalities Ship engine suppliers National governments, incl. legal authorities OPS Sector organisations and NGOs (lobbying) Intergovernment al organisations The logistics supply chain 3.4 General policy framework on OPS 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 International At the macro level, intergovernmental and international sector organisations like the International Maritime 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. To a limited extent (so far) such organisations have also promoted deployment by offering grants and subsidies to ports and ship owners. 11

12 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 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 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 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 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

13 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 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 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 For an in-depth analysis of this area, see Policies and Instruments A baseline of Knowledge. Report 1 CNSS project, February Dr. Ash Sinha and Dr Martyn Lightfoot (eds). 23 Marpol revised Annex VI. 24 with the adoption of amendments to MARPOL Annex VI (resolution MEPC.203(62)), by Parties to MARPOL Annex VI. Source: 25 The CO 2 reduction level (grams of CO 2 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 (Source: Ibid) Ibid 28 World Port Climate Initiative European Seaports Organisation, 30 Ibid 31 Ibid

14 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 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) 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 , 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 Green10 39 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 14

15 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 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 The European Union (EU) 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 climate goals), transport, 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 OPS 43. In the policy negotiations surrounding the EU Strategy on Alternative Fuels and the work leading up to the EU commission Directive proposal 44, DG Environment was in favour of making OPS infrastructure mandatory in ports 45, 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: 33 Interview with Antonis Michail, Sustainability Manager, ESPO, ESPO position paper on the deployment of alternative fuels infrastructure European Community Shipowners Association, 36 E.g. in regard to the revision of the EU tax Directive Clean Shipping Coalition, 38 Friends of the earth, 39 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 Bellona, 41 NABU (Nature and Biodiversity Conservation Union), 42 A workshop on this topic was organised in February 2013, in which the issue of OPS was one of the topics of discussion 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). 44 European Commission, Proposal for a Directive on the deployment of alternative fuels infrastructure, 2013/0012 (COD), 24 January 2013, 45 Interview with Frederik Neuwahl, DG Environment, EU Commission European Commission, Proposal for a Directive on the deployment of alternative fuels infrastructure, 2013/0012 (COD), 24 January 2013, 15

16 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 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 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 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: 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, The Directive allows OPS as an alternative 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

17 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 Gdynia- Karlskrona, 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 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 , 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 Under the Commission Implementing Decision of 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. 47 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, 48 World Port Climate Initiative, 49 European Commission, DG Mobility and Transport, Annual Report of the Coordinator - Priority Project 21, Motorways of the Sea, Trans- European transport network, 50 European Commission, Project description: On Shore Power Supply - an integrated North Sea network, 2011-EU P 51 Interview with Gert Jakobsen, DFDS European Commission, Project description: Baltic Link Gdynia-Karlskrona 2009-EU P, 53 Interview, Pieter de Meyer, European Commission, DG Mobility and Transport 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

18 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 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 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 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 Swedish 61 and German models for supporting OPS through the tax route is interesting and would like to see more countries adopt similar systems 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 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. 18

19 Trans-European Seaport network Interview with Pieter de Meyer, European Commission, DG MOVE, European Commission, C(2012) 8508 final Commission Implementing Decision of 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 , 58 World Port Climate Initiative, 59 ESPO, 60 World Port Climate Initiative, 61 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) 62 Interview with Antonis Michail, Sustainability Manager, ESPO, 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,

20 ONSHORE POWER SUPPLY (OPS) SURVEY SECAs and CO 2 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 CO 2 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 CO 2 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 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 project 66, of which this report is a result. Since the collapse of communism in the 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 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 government 68 involvement and proactivity regarding the OPS issue. In the region, Sweden, Germany and Norway are leading the way in this regard 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 Commission 69 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 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 20