Costs and Benefits of Shore Power at the Port of Shenzhen
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WHITE PAPER DECEMBER 2015 COSTS AND BENEFITS OF SHORE POWER AT THE PORT OF SHENZHEN Haifeng Wang, Ph.D., Xiaoli Mao, and Dan Rutherford, Ph.D. www.theicct.org [email protected] BEIJING | BERLIN | BRUSSELS | SAN FRANCISCO | WASHINGTON ACKNOWLEDGEMENTS This report was commissioned by the China Environment Forum (CEF) at the Woodrow Wilson International Center for Scholars as part of its Choke Point: Port Cities initiative, funded by the Henry Luce Foundation. The authors thank Irene Kwan and Simon Ng for their technical support and Tim Leong for his critical review of the work. The authors also especially thank Shenzhen Human Settlements and Environmental Committee and the Port of Oakland for their review and recommendations for the report. ABOUT THE CHINA ENVIRONMENT FORUM (CEF) Since 1997, the China Environment Forum (CEF) has been the “go-to” resource for convening policy, business, research, and NGO practitioners on the most pressing energy, water, and pollution problems facing China. Through meetings, publications, and exchanges, they play a unique nonpartisan role in creating multistakeholder dialogues around China’s energy and environmental challenges, identifying new areas of collaboration. CEF’s work is frequently featured in mainstream media, including: The New York Times, The Wall Street Journal, The Washington Post, BBC News, The Guardian, Bloomberg Businessweek, and Foreign Policy. For additional information: International Council on Clean Transportation 1225 I Street NW Suite 900 Washington, DC 20005 USA [email protected] | www.theicct.org | @TheICCT © 2015 International Council on Clean Transportation TABLE OF CONTENTS Executive summary .................................................................................................................. iv 1. Onshore power overview .......................................................................................................1 1.1 Introduction ........................................................................................................................................ 1 1.2 Technical considerations of shore power ............................................................................... 2 1.3 The costs and benefits of shore power ...................................................................................4 2. Shore power in Shenzhen .................................................................................................... 5 2.1 The port overview ........................................................................................................................... 5 2.2 Shore power at the Port of Shenzhen ..................................................................................... 6 3. The electricity generation mix in Hong Kong ................................................................... 8 3.1 Current generation mix ................................................................................................................. 8 3.2 The generation mix in 2020 ........................................................................................................ 9 4. Emis sions from shore power and marine diesels ............................................................ 11 4.1 Emissions intensity from power plants in Hong Kong .......................................................11 4.2 Emissions intensity from marine diesel engines .................................................................12 5. Methodology: Activity-based approach .......................................................................... 14 5.1 Auxiliary and boiler emissions from shipping ......................................................................14 5.2 Data and assumptions ..................................................................................................................15 6. Findings .................................................................................................................................17 6.1 Emissions at berth from container ships in Shenzhen .....................................................17 6.2 Emissions reduction from shore power in 2020 .................................................................18 6.3 Peak demand ....................................................................................................................................18 7. Cost-benefit analysis............................................................................................................21 7.1 Data, assumptions, and methodology ....................................................................................21 7.1.1 Introduction ............................................................................................................................21 7.1.2 Data and assumptions ........................................................................................................21 7.1.3 Methodology: discounted cash flow (DCF) ..............................................................22 7.2 Results ................................................................................................................................................23 7.3 The cost effectiveness of existing onshore power............................................................25 7.4 Comparison with low sulfur fuel strategy ............................................................................26 8. Conclusion ............................................................................................................................27 References ................................................................................................................................29 i ICCT WHITE PAPER LIST OF TABLES Table 1. Ports using shore power ...............................................................................................................1 Table 2. Specifications of shore power ..................................................................................................3 Table 3. Areas that constitute the Port of Shenzhen ........................................................................6 Table 4. Emissions caps for power stations in 2017 and 2020 .....................................................9 Table 5. Emissions intensity of marine diesels .................................................................................. 12 Table 6. Auxiliary engine and boiler default values ......................................................................... 15 Table 7. Emission factors used ................................................................................................................. 16 Table 8. Emissions from container ships in Shenzhen in 2012 and 2020 ................................ 17 Table 9. Cost of reducing pollutants using onshore power in Shenzhen (80% penetration rate) .............................................................................................................................. 23 Table 10. Cost of reducing pollutants using onshore power in Los Angeles, Long Beach, and Oakland estimated by CARB with an 80% compliance rate .................... 24 Table 11. Per-tonne cost-benefit of reducing various emissions for a 6,000 TEU container ship ....................................................................................................................... 25 Table 12. Cost-benefit of berths already installed with onshore power ................................. 26 Table 13. Emissions reduction from switching to MGO ................................................................. 26 ii COSTS AND BENEFITS OF SHORE POWER AT THE PORT OF SHENZHEN LIST OF FIGURES Figure 1. Container throughputs at the largest ports in the world in 2013. ............................. 5 Figure 2. An example of shoreside shore power infrastructure in Shekou .............................. 7 Figure 3. Electricity generation mix in Hong Kong in 2012 (Hong Kong Environment Bureau, 2012). .............................................................................................. 8 Figure 4. Projected electricity generation mix in Hong Kong in 2020. .....................................9 Figure 5. Emissions intensity of power stations in Hong Kong in 2012 and 2020. ...............11 Figure 6. Emissions reduction by switching from marine diesels to electricity via shore power. ..............................................................................................................................................13 Figure 7. Emissions from container ships at berth in Shenzhen (2012) and Hong Kong (2007). .......................................................................................................................................17 Figure 8. Emissions reduction for different shore power penetration rates. ..........................18 Figure 9. Reserve capacity and reserve margin of the electricity supply in Hong Kong. ....19 Figure 10. Shore power penetration rates and estimated reserve margin of the Hong Kong electricity grid in 2020. .............................................................................................. 20 Figure 11. Cost effectiveness of reducing NOX at the Port of Shenzhen by using onshore power. ...................................................................................................................................24 Figure 12. Cost effectiveness of reducing PM at the Port of Shenzhen by using onshore power. ...................................................................................................................................25