A life cycle cost analysis of different shore power incentive policies on both shore and ship sides based on system dynamics and a Chinese port case

Gu, Yimiao; Yu, Xinyi

doi:10.1007/s11356-024-33009-2

A life cycle cost analysis of different shore power incentive policies on both shore and ship sides based on system dynamics and a Chinese port case

Research Article
Published: 06 April 2024

Volume 31, pages 29563–29583, (2024)
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Abstract

Shore power (SP) is widely recognized as an efficient strategy for reducing air pollution in port areas. Unfortunately, the adoption of SP has been relatively low, resulting in limited emission reductions and financial losses. To address these challenges, this paper focuses on enhancing the utilization rate of SP, which is meaningful for emission control and environmental protection. This paper combines system dynamics with a study of the benefits of SP, which bridges the research gap to some extent. We propose a system dynamics model that assesses the impact of various incentive policies on the economic and environmental benefits of SP. The model considers the life cycle cost and comprises four subsystems. By conducting a case study on Nansha Port, we find that price subsidies are more effective than construction subsidies in overcoming economic barriers. Furthermore, we observe that the overall economic benefits only increase when the electricity price decreases. This is because lowering the electricity price enhances the profitability of ships without negatively affecting port revenue. Additionally, it is the proportion of the electricity price and service price that determines the overall economic benefits, rather than the SP price itself. Hence, it is recommended to provide preferential subsidies for the electricity price.

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Shore Power Price Competition Between Ports

Onshore power one option to reduce air emissions in ports

Article Open access 25 May 2020

Northern Sea Route Infrastructure and Shipbuilding Development

Data Availability

The data of this study are available from the corresponding author, upon reasonable request.

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Acknowledgements

This research received funding support from the Natural Science Foundation of Guangdong Province, China (Grant No. 2023A1515010950) and the Philosophy and Social Science Foundation of Guangdong province (Grant No. GD22XGL03).

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Department of Electronic Business/Institute of Digital Business & Intelligent Logistics, South China University of Technology, Guangzhou, China
Yimiao Gu & Xinyi Yu

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Yimiao GU: Conceptualization, Supervision, Review & Revising Manuscript, Funding Acquisition;

Xinyi YU: Methodology, Writing Original Draft.

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Correspondence to Yimiao Gu.

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Appendices

Appendix I

Table 7

Table 7 The following notations are introduced:

Full size table

Appendix II

Main equations of model in Fig. 7.

(1)Annual berth use time = 365*24*IF THEN ELSE( Time = 0, Berth utilization rate, IF THEN ELSE( Berth utilization rate + Berth utilization rate*(Port throughput-23731)/23731 < = 0.7, Berth utilization rate + Berth utilization rate*(Port throughput-23731)/23731, 0.7)).
(2) Annual CO2 emission reduction = Power consumption*CO2 reduction factor.
(3) Annual cost of port = SP fault cost of port + SP maintenance cost of port + SP operating cost of port + SP disposal cost of port.
(4) Annual income of port = SP price*Annual SP use time*Total power of SP/10000 + Annual SP use time*Subsidy for SP price per kWh*Total power of SP/10000.
(5) Annual NOx emission reduction = NOx reduction factor*Power consumption.
(6) Annual SO2 emission reduction = Power consumption*SO2 reduction factor.
(7) Annual SP use time = Annual berth use time*SP utilization rate*0.9
(8) Annual subsidy to port for SP price = Subsidy for SP charge.
(9) Benefits of port = INTEG (Discounted income-Discounted cost, -682.3 + Subsidy to port for SP construction).
(10) Benefits of ship = INTEG (Discounted inflow-Discounted outflow, -200 + Subsidy to ship for SP construction).
(11)CO2 emission reduction accumulation = INTEG (Annual CO2 emission reduction, 0).
(12)Cost factor = 0.0537.
(13)Discount factor([(0,0)-(20,1)],(0,1),(1,0.909091),(2,0.826446),(3,0.751315),(4,0.683013),(5,0.6209),(6,0.5645),(7,0.5132),(8,0.4665),(9,0.4241),(10,0.3855),(11,0.3505),(12,0.3186),(13,0.2897),(14,0.2633),(15,0.2394),(16,0.2176),(17,0.1978),(18,0.1799),(19,0.1635),(20,0.1486).
(14)Discounted cost = Annual cost of port*Discount factor(Time + 1).
(15)Discounted income = Annual income of port*Discount factor(Time + 1).
(16)Discounted inflow = Power generation cost of auxiliary engines*Discount factor(Time + 1).
(17)Discounted outflow = SP cost of ship*Discount factor(Time + 1).
(18)Effect coefficient = 0.01.
(19)Electricity charge paid to the power grid company = Electricity price*Annual SP use time*Total power of SP/10000.
(20)Environmental benefits = CO2 emission reduction accumulation + SO2 emission reduction accumulation + NOx emission reduction accumulation.
(21)Environmental cost = Ship's annual berthing time*Cost factor*Total power of auxiliary engines/10000.
(22)Fixed investment = 100 + GDP of Port Hinterland*The impact of GDP on investment.
(23)Fuel oil power generation cost = Fuel price*Total power of auxiliary engines*Ship's annual berthing time/10000.
(24) GDP of Port Hinterland = Environmental benefits*The impact of emission reduction on GDP(Time).
(25)Government subsidy = Subsidy to port for SP construction + Subsidy to ship for SP construction + Total subsidy to port for SP price.
(26)Gross register tonnage = 10.
(27)Incentive conversion factor = 0.022.
(28)Incentive effect = (Environmental benefits + Government subsidy + Fixed investment)*Effect coefficient.
(29)NOx emission reduction accumulation = INTEG (Annual NOx emission reduction, 0).
(30)Port throughput = GDP of Port Hinterland *The influence factor of GDP on Port throughput(Time).
(31)Power consumption = Annual SP use time*Power tonnage ratio*Load factor*Gross register tonnage/100.
(32)Power generation cost of auxiliary engines = Fuel oil power generation cost + Environmental cost + Auxiliary engines maintenance cost.
(33)SO2 emission reduction accumulation = INTEG (Annual SO2 emission reduction, 0).
(34)SP cost of ship = SP operating cost of ship + SP fault cost of ship + SP maintenance cost of ship + SP disposal cost of ship.
(35) SP disposal cost of port = IF THEN ELSE(Time = 19, -SP residual value of port, 0).
(36)SP disposal cost of ship = IF THEN ELSE(Time = 19, -SP residual value of ship, 0).
(37)SP operating cost of port = Transformer capacity cost + Electricity charge paid to the power grid company.
(38)SP operating cost of ship = (Total power of SP*Ship's annual berthing time*SP utilization rate*SP price)*0.9/10000 + Power generation cost of auxiliary engines*SP utilization rate*0.1 + Power generation cost of auxiliary engines*(1-SP utilization rate).
(39)SP price = Electricity price + SP service price-Subsidy for SP price per kWh.
(40)SP utilization rate = SMOOTH( IF THEN ELSE(Incentive effect*Incentive conversion factor*Incentive for captain < = 1, Incentive effect*Incentive conversion factor*Incentive for captain, 1), 2).
(41)Subsidy for SP charge = Ship's annual berthing time*Subsidy for SP price per kWh*Total power of SP*SP utilization rate*0.9/10000.
(42)The impact of emission reduction on GDP.
([(0,0)-(6,10)],(0,0),(1,4.7),(2,2.5),(3,1.25),(4,0.6),(5,0.34),(6,0.17))
(43)The impact of GDP on investment = 0.05.
(44)The influence factor of GDP on Port throughput.
([(0,0)-(6,20)],(0,0),(1,15.52),(2,16.1),(3,14.18),(4,13.14),(5,12.05),(6,11.7))
(45)Total benefits = Benefits of port + (Annual berth use time/Ship's annual berthing time)*Benefits of ship.
(46) Total subsidy to port for SP price = INTEG (Annual subsidy to port for SP price, 0).
(47)Transformer capacity cost = 138.

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Gu, Y., Yu, X. A life cycle cost analysis of different shore power incentive policies on both shore and ship sides based on system dynamics and a Chinese port case. Environ Sci Pollut Res 31, 29563–29583 (2024). https://doi.org/10.1007/s11356-024-33009-2

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Received: 19 November 2023
Accepted: 16 March 2024
Published: 06 April 2024
Issue Date: April 2024
DOI: https://doi.org/10.1007/s11356-024-33009-2

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A life cycle cost analysis of different shore power incentive policies on both shore and ship sides based on system dynamics and a Chinese port case