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The global shore power market size was USD 1.12 billion in 2020 and is projected to grow from USD 1.26 billion in 2021 to USD 3.16 billion in 2028 at a CAGR of 14.0% in the 2021-2028 period. The global impact of COVID-19 has been unmatched and staggering, with shore power witnessing a negative demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of -21.4% in 2020 compared to the average year-on-year growth during 2017-2019. The rise in CAGR during the forecast period is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.
Shore power is also called onshore power or alternative marine power. It is the process of providing shoreside electrical power to a ship in the berth while its main and auxiliary engines are shut down. By plugging in and shutting off the engines, shore power virtually eliminates diesel emissions and other air pollutants that would otherwise come from running the vessel’s onboard auxiliary engines. It is an effective way of reducing pollutants that damage air quality and greenhouse gas emissions that contribute to climate change. It also helps to reduce operational costs and engine noise. Additionally, by providing ship operators with an alternative to run auxiliary diesel engines while docked, this technology helps to reduce the fuel cost, which increases its demand in the maritime industry.
Blockades in Maritime and Trade has Impaired the Market Growth amid COVID-19
The global pandemic occasioned by the spread of the novel coronavirus has had a harmful influence on every industry. Industries have underwent major damages in operative time owing to the execution of strict rules such as lockdowns to decrease the spread of the COVID-19 virus. Moreover, shutting down businesses except for essential services with minimal workforce affected international and domestic trade. As the market is primarily reliant on maritime activities, the decline faced by the marine and trade industry in a long time has also impacted the investment in this technology and this has directly impacted the maritime industry.
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Growing Number Of Cruise Liners to Accelerate Market Growth
The increasing traveling passengers on cruise ships is growing significantly, thereby promoting the shore power market growth. As per the State of the Cruise Industry Outlook report, published by the Cruise Lines International Association, the cruise industry hosted 29.7 million passengers worldwide in 2019. North America accounted for the highest rate of cruisers, with 15.4 million passengers cruising in 2019. According to the United Nations World Tourism Organization’s World Tourism Barometer report, international tourist arrivals increased to 4% from January to June 2019, accounting for 671 million, almost 30 million more than the previous year. Cruise travel grew by nearly 6% during 2018-2019, with a growth of nearly 1.7 million.
Hence, increasing cruise lines such as carnival cruise lines, celebrity cruises, costa cruises, Norwegian cruise lines, Royal Caribbean international, saga cruises, and other cruises in the shipping industry are adding impetus to the market.
Installation Of Retrofit Shore Power Systems Will Boost Market
Shipping lines are featuring marine power in new vessels and retrofitting their existing ones owing to the increasing number of terminals equipped with this power and development in regulation. The growing investments in retrofitting the ports will propel its demand in the market. For instance, in October 2019, Global Ports Holding had started operations at the Nassau cruise port, with an investment of USD 250 million for capacity expansion and retrofitting the existing port. In June 2021, Antwerp, Bremerhaven, Hamburg, Haropa Port, and Rotterdam made a joint declaration of zero-emission shipping in line with their green ports strategy. The ports stressed a strong business case for retrofitting or equipping large container ships for shore power and pointing to the readiness level among these vessels to use cold ironing. Hence, an increasing number of terminals and installation of retrofit systems on the port will bolster growth.
Government Regulation for Lowering Greenhouse Gases Emissions to Fuel Market Growth
Shore power helps in reducing greenhouse gases emission produced by auxiliary diesel engines while docked. Therefore, governments are focusing on investing in this technology in the global market. For instance, in August 2017, the government of Canada planned to invest USD 5 million in this technology for the Ports Program. Supportive government regulations and emission control initiatives will help the market rise.
In June 2021, trade body Maritime U.K. urged the government to invest USD 235 million marine power to build a viable charging network and reduce port emissions. For instance, the European Commission has mandated to the implementation of shore connection systems to all European ports. Hence, such supportive government regulation for reducing greenhouse gas emissions is likely to fuel the market growth during the forecasted period.
Reduction in Low-Frequency Noise and Emissions at Ports to Spur Demand in Market
Using marine power enables ships at a dock or in a dry dock to use shoreside electricity to power the onboard electrical systems, such as lighting, ventilation, cargo pumps, communication, and other critical equipment while turning off their auxiliary engines. It helps to reduce low-frequency noise and vibration and allows the crew to save the ship’s diesel engines while berthed. It is a critical way to reduce emissions and save costs for shipping companies. Additionally, it is a quicker and cheaper short-term solution for allowing shipping companies to achieve emissions targets. Hence, the aforementioned advantageous features of this power are expected to drive the market.
High Installation and Maintenance Costs May Restrict Market
Onboard frequency conversion cost and the cost of supplying the jetty with high-voltage electricity are the major factors responsible for the high installation cost of this technology. Additionally, these equipment are heavy, making transport bulky and limiting the overall flexibility, thereby increasing the maintenance cost. Hence, higher installation and maintenance cost restraints market growth. Global pandemic and outbreak of coronavirus (COVID-19) have emerged as a significant challenge of uncertainty to the maritime market, which would impact the transportation sector adversely during the projected period. Hence, the COVID-19 crisis has disrupted marine transportation, which affects the market in the upcoming years.
Shoreside Segment Dominated Global Market
The market by connection is segmented into shoreside and shipside.
The shoreside market segment is leading the market as it helps to eliminate ship engine emissions in port waters, reduces pollutants by about 90%, and greenhouse gas emissions by 50%. Additionally, it reduces noise, vibration, and engine wear and tear.
The shipside segment is also witnessing an increase in its market share due to a rise in demand for passenger vessels and growing demand for merchant's vessels. The shipside segment is further segmented into passenger vessel, merchant vessel, offshore support vessel, and specialized vessel.
New Installation Segment to Aid Dominance in Market
The shore power market by installation is segmented into the new installations and retrofit segments.
The new installation segment dominates the market due to the increasing demand for new installations with upgraded infrastructure. Additionally, the lower cost of new installations than retrofit installations is a key driving factor for the segment.
The retrofit segment is also expected to witness a significant rise due to the growing number of terminals with marine power infrastructure. The the new installation segment is expected to grow during the projected period owing to supportive government regulations.
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Frequency Converter Segment to Aid Dominance in Market
When segmented by component, the market is segmented into the transformer, switchgear, cables & accessories, frequency converter, and others.
The frequency converter segment dominates the shore market by component, due to growing transportation and the increasing number of ports and terminals. . Hence, the rising demand for the frequency converter segment for shore power technology is expected to drive the market during the forecast period.
The switchgear segment increases the shore power market share due to the growing application for switchgear components for safety measures in the maritime industry.
The transformer segment is also witnessing a significant share due to the increasing application of transformers to cater to the growing power demand.
The cables & accessories segment is also experiencing substantial growth owing to the ever-increasing demand for marine power for the ship at berth
Asia Pacific Shore Power Market Size, 2020 (USD Billion)
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The global market is segmented into North America, Europe, Asia Pacific, and Rest of the World.
The Asia Pacific market was USD 0.41 billion in 2020 and is forecasted to increase its share to USD 1.16 billion by 2028, owing to the increasing number of terminals at the port and investments in improving marine infrastructure. According to the Ministry of Transport, in 2018, the container throughput capacity of China's major ports increased to 5.3% from the previous year, which is about 250 million standard containers. Additionally, China has seven out of the world's ten largest ports in terms of annual cargo and containers. Ports of Shanghai and Qingdao are getting more investments to install the shore power system in China's ports, increasing the market demand for this energy, further reducing air and noise pollution.
Europe contributes to 90% of seaborne trading, which expands the marine industry significantly. Major European countries are primarily dependent on marine transportation. As per the European Commission, nearly 400 million passengers embark and disembark at European ports. Additionally, the maritime industry is an contribute majorly to the employment and income for the European economy.
The North American region is also anticipated to witness a significant share in the market. According to the Bureau of Economic Analysis, the U.S. trade imports of goods and services increased to USD 264.9 billion in 2018. Hence, increasing transportation and growing investments in marine trade and transport are expected to propel the market during the projected period.
The rest of the world is expected to witness a huge growth, especially with countries such as Brazil investing in the technology with projects by Hindrovias do Brasil, which are likely to be completed by 2022.
Significant Investments in Maritime Industry, Propels Cavotec, ABB, and Schneider Electric into Competitive Market
The market's competitive landscape depicts significant investment in the maritime industry, improving transportation and delivering quality to traveling passengers. Supportive government regulation for emissions on the port and the increasing number of cruise liners in the shipping industry are the prominent factors responsible for the growth of marine power, which brings the leading company to enter into the competitive market. Very few regional and domestic players in market have entered the competitive market for providing marine power. Hence, the high entry barrier has led to low competition among the major players. This factor is projected to impact the global market share during the forecast period positively.
An Infographic Representation of Shore Power Market
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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming product developments. Besides this, the report offers insights into the market, current trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion)
Fortune Business Insights says that the global market size was USD 1.12 billion in 2020 and is projected to reach USD 3.16 billion by 2028.
In 2020, the Asia Pacific market value stood at USD 0.41 billion.
Growing at a CAGR of 14.0%, the market will exhibit steady growth in the forecast period (2021-2028).
The frequency converter segment is expected to be the leading segment in this market during the forecast period.
Supportive government regulation for reducing greenhouse gas emissions and implementing marine power to reduce low-frequency noise and emissions at ports are key driving factors in the market.
The Asia Pacific dominated the market in terms of share in 2020.
ABB, ESL Power Systems, Inc., Schneider Electric, SmartPlug Systems, Cochran Marine LLC, Siemens, and Wärtsilä are top companies in the market.
Marine power is a clean and reliable source of energy. It helps in reducing emissions and greenhouse gases. It is used by marine vessels to plug into the local electricity grid and turn off auxiliary engines when at-dock.
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