||The marine transportation sector stands as a major component of the global economy,
delivering goods from major producing markets in Asia and the Pacific region to major
consumer markets in Europe and North America. The United States Department of Transportation’s
Maritime Administration recorded over a billion tons of foreign trade through U.S.
ports in 2009. Given the economic importance of this sector, its inclusion in future
environmental remediation regimes is key. But any improvement in the environmental
performance of shipping must take into account the fact that requirements that make
shipping more expensive relative to other forms of transport would likely result in
an overall negative environmental outcome.
This master’s project investigates whether or not cold-ironing, a method by which
ships use shore-side electric power rather than auxiliary engines while in port, can
improve environmental performance in a cost-effective manner. The analysis involved
constructing a model that compared operational costs under business-as-usual conditions
with operational costs following the deployment of cold-ironing. A deterministic analysis
was first undertaken to explore how historic movements in fuel and electricity prices
affected the magnitude of savings. This was followed by a stochastic analysis using
a monte carlo simulation to explore how variations in fuel prices, electricity prices,
and ship operating characteristics affected the expected level of savings across an
The results demonstrated that cold-ironing could deliver substantial savings, dependent
on the relative magnitudes of fuel and electricity prices. Overall, smaller ships
did not experience savings as they could not recoup the costs of the cold-ironing
retrofit. A sensitivity analysis showed that changing operational characteristics,
such as the number of engines in operation on a ship, had a large impact on savings.
Governments and port authorities need to look where their interests in environmental
improvement align with those of ship operators that can benefit economically from
the use of cold-ironing to aid in the deployment of the shore-side infrastructure
necessary to expand the use of this tool.