December 9, 2023

Alternate Marine Power Market Analysis: Trends, Growth, and Future Outlook 2030

The surge in shipping activity has recently faced criticism due to its environmental impact, prompting shipping companies and port authorities to focus on adopting Alternate Marine Power (AMP) solutions. Large vessels have been associated with significant air and noise pollution during idling and berthing. In response to growing concerns about pollution, Fairfield Market Research anticipates that the global alternate marine power market will witness substantial growth, driven by the implementation of stringent environmental regulations in the shipping industry.

Alternate marine power, also known as “cold ironing” or shore power, involves supplying berthed ships with land-based electricity, eliminating the need to burn heavy fuels on board. This innovative approach has gained prominence globally, with ports providing consistent power to cruise vessels, container ships, Ro/Pax, and Ro/Ro ferries, thus reducing emissions during berthing. As the world embraces environmentally friendly initiatives, the shipping industry is reevaluating its power consumption, and numerous ports are gearing up to offer AMP solutions, combating air pollution characterized by high sulfur and carbon dioxide content.

Legal Requirements Drive Investments in Alternate Marine Power

The global alternate marine power market has witnessed steady investments as the shipping industry endeavors to comply with legal frameworks. Cruise lines, ferry companies, and ports, driven by consumer demand and operating primarily in urban areas, are investing in shore power systems to mitigate their environmental impact. Mandates such as the 2014/94/EU directive on the Deployment of Alternative Fuel Infrastructure require all ports to equip their berths with alternate marine power by 2025. Similarly, vessels berthing at ports in California must use shore power by 2027, as mandated by the Air Resources Board. These regulatory requirements are expected to drive significant investments in infrastructure to support shipping activities, including transportation, trade, and leisure.

Implementing alternate marine power alongside port facilities does increase the overall capital cost for fleet owners. Vessels must be equipped with auxiliary engines (AE), onboard transformers, and other retrofit installations to receive shore power. On average, the capital cost for a port equipped with alternate marine power for small, medium, and large fleets ranges between US$ 60,000-80,000 per berth per year.

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Amendments to SOLAS Treaty Accelerate AMP Adoption

Carbon emissions in the maritime industry currently account for about 3% of total CO2 emissions, and this figure is expected to rise, possibly reaching 17% by 2050, according to estimates by the European Parliament. To address this pressing issue, demand for shore-side power has surged by approximately 70%, as reported by the International Maritime Organisation (IMO). The IMO is actively working on amendments to the Safety of Life at Sea (SOLAS) treaty to promote the adoption of cold ironing techniques, making greener solutions safer and more sustainable. These efforts are expected to further boost the global alternate marine power market in the coming five years.

Container Vessels Lead the Charge

Fairfield Market Research predicts that container ships will emerge as the primary users of alternate marine power in the next five years. Despite challenges posed by the COVID-19 pandemic and trade restrictions, container vessels continue to play a vital role in global maritime trade. As the shipping industry returns to normalcy since mid-2020, the demand for supporting container ships with alternate marine power at ports will provide significant momentum to this segment. The United Nations Conference on Trade and Development states that approximately 80% of globally traded goods and 60% of all global trade depend on maritime transport, underscoring the enduring importance of container ships in the post-pandemic world.

North America Takes the Lead

Developed regions are expected to dominate the global alternate marine power market between 2021 and 2026. Shore power adoption is particularly prevalent in European and North American ports, as per the U.S. Environmental Protection Agency (EPA). Regulatory frameworks and heightened awareness regarding the detrimental effects of berthing bode well for these regional markets. Meanwhile, other parts of the world are also exploring the adoption of shore-side power systems, with initiatives such as subsidies for vessels using shore power or low-sulfur fuels during berthing in ports like the Port of Shenzen in Asia Pacific.

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Key Players Drive Research, Development, and Installations

Prominent players in the global alternate marine power market, including Piller Group GmbH, ABB Ltd., Schneider Electric, Cavotec SA, Nidec ASI, MacGregor, PowerCon, Siemens, ESL Power Systems, Inc., Danfoss, VINCI Energies, Wartsila, Ratio Electric B.V., and Wabtec Corporation, are expected to focus on research, development, and installations. Notably, in 2018, the Port of Los Angeles and Cavotec jointly installed the world’s first in-service container vessel-compatible alternate marine power system. Similarly, in August 2019, Nidec ASI installed a power management system on the mega Yacht Wider 165, designed to enhance power management with a zero-emission mode that enables the yacht to operate on battery power.

Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2023-2030 – By Product, Technology, Grade, Application, End-user, Region: (North America, Europe, Asia Pacific, Latin America and Middle East and Africa)

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This press release first seen on Brilad