Destination 2050: Switching up port electrification

Carolyn Newsham (Financing Partner to Siemens GB&I, Siemens Financial Services UK) explains how specialist marine financing can help ports meet bold emissions reduction targets.

The shipping sector is responsible for over a tenth of global transport emissionsⁱ, and almost 3% of global CO₂ emissionsⁱⁱ. To add further context, emissions from shipping have grown more than 90% since 1990.ⁱⁱⁱ

In contrast, UK maritime emissions have declined by 30% since 1990.^iv Domestic and international shipping account for 7.9% of total UK transport emissions, according to 2022 figures.^v

To accelerate this downward trend, the UK government’s new maritime decarbonisation strategy, released March 2025, sets domestic maritime emission reduction goals to:

30% greenhouse gas (GHG) emissions reduction by 2030;
80% GHG emissions reduction by 2040 (compared to 2008 levels);
and zero GHG emissions by 2050.^vi

This aligns with the higher end of the target ranges set by the International Maritime Organisation (IMO).^vii

The first 2030 milestone is fast approaching, which means that any measures taken must be ambitious in scope and impact.

Docking port emissions

Turning to ports specifically, the government’s strategy document notes that, “Almost half of the GHG emissions from UK domestic maritime (excluding inland waterways) come from vessels at berth in our ports…”. As well as carbon emissions, ports also emit harmful sulphur oxides, nitrogen oxides and fine particulate matter^viii, to the detriment of those who work and live in port towns.

Following a call to evidence, the government may also introduce a requirement for zero or near-zero GHG emissions from vessels at berth, which may then come into effect in the late 2020s or 2030s. All the more reason for operators to take immediate action.

Why electrify?

In the transition from fossil fuels to alternative fuel sources, the electrification of port infrastructure – such as diesel-powered mobile cranes or cargo-handling equipment – will be essential to reducing emissions. This electricity may be generated via a battery, hydrogen fuel cell, or an electrical source such as the utility grid or solar photovoltaic panels.^ix

As well as the environmental benefits (improved air and water quality, and noise reduction), there is scope for cost savings, and energy independence over time. Ports that are already converting to electric will also be in prime position to take advantage of innovations and technological advancements. In Portsmouth, for instance, the Sea Change project brings together academics, marine specialists and technology SMEs alongside Portsmouth International Port and Brittany Ferries to deliver the project.^x

Obstructions to shore power

According to a study by the UK Chamber of Shipping, almost 80% of respondents acknowledged the lack of port infrastructure as an obstacle to installing shore power technology on their vessels.^xi Retrofitting costs (45% of the respondents) and regulatory requirements (41%) were cited as the second and third barriers.^xii

In a separate survey by the British Ports Association, on barriers to shore power, capital costs were the most commonly identified barrier (for installing infrastructure and for any remedial work needed on the local distribution network), followed by the related challenge of energy network capacity (which typically comes at a large cost to remedy, the survey report notes), the cost of electricity and a lack of demand.^xiii

As the survey report states, “UK ports operate on a commercial basis and investment and spending therefore must have a viable business case”.

Financing the conversion

How can port operators overcome this financial barrier? Even if the maritime strategy assures that, “we want to establish the right incentives and requirements to encourage the uptake of the technology needed to reduce these emissions [from vessels at berth]”^xiv, public sector finance alone will not be sufficient to achieve the targets in the designated period.

In the UK, investment of around £40 billion per annum in new assets is required to meet the UK’s net-zero target of 2050, and the government wants at least half of that to come from the private sector. Additionally, the National Wealth Fund (NWF) will target a public-to-private investment ratio of 1:3, potentially unlocking more than £70 billion of private investment into the UK’s clean energy and growth industries^xv.

Private finance solutions allow businesses to immediately invest and seize opportunities without capital expense, spreading repayments over an agreed period to accommodate cash flow requirements.

In some cases, where ports introduce energy efficiency measures as well as an element of self-generation, marine financing structures can keep operating costs at zero net increase over current energy payments, and maintain this until the capital investment is written off. After the end of the financing period, the organisation benefits from lower energy costs in perpetuity, all without raising loan capital. This tends to be the province of specialised finance providers, like Siemens Financial Services.

The availability of such specialist financing for port electrification and renewable energy projects – in addition to government incentives – is therefore vital to making a strong business case, and achieving emissions targets in a timely manner. There are already a number of pioneers in the port community who are taking advantage of specialist financing structures and leading the way for their fellow operators around the country and the continent.

A new onshore power system provides ships at the Port of Kiel with sustainable power
Cruise ships and ferries have become a burden in many ports, especially because of the emissions from their diesel generators. The electricity on these ships is supplied by onboard diesel generators, which are left running while the vessels are in harbour. The noise and vibration from these giant generator sets disturb nearby residents, while exhaust gases impact the air quality and climate.
The authorities in the north German port city of Kiel were no longer willing to tolerate this situation. Kiel is a popular departure point for cruises and is also the starting point for ferries bound for Norway, Sweden, and the Baltic. About 2.4 million passengers pass through the terminal facilities in Kiel on their way to or from ships of one kind or another.
To minimise the environmental impact and the health risks for nearby residents, the Port of Kiel decided to enable ships to obtain their electricity supplies from the local grid while in port, instead of having to continue generating it using their diesel engines. That allows port operators to supply the ships with power from renewable sources like photovoltaic plants and wind turbines. The port conserves about 12,000 metric tons of CO2 annually, equal to the amount emitted every year by 2,600 passenger vehicles.
Kiel designed its new onshore power system to provide a simple, fast, and flexible connection between land and ship. To supply ships the size of a small town with clean electricity, the onshore power system needs to manage a lot of power. But that isn’t all it needs: onboard networks operate using different voltages and frequencies than the local power network. That’s why supplying the ships from the mainland requires additional power electronics capable of managing these differences.
With Siemens’ SIHARBOR shore connection, berthed ships can draw the needed energy from onshore and shut down their generators, thus meeting the strong environmental regulations that are being taken for ports. SIHARBOR provides a fast, simple and flexible connection to the ship via a cable management system.
In Kiel, SIHARBOR synchronizes the two ship networks and automatically begins the supply process just a few minutes after being connected. The system continuously coordinates the autonomous ship networks in order to ensure an efficient and uninterrupted supply.
Learn more: https://www.siemens.com/global/en/company/stories/infrastructure/2021/onshore-power-systems-why-vessels-should-be-plugged-in.html

i https://www.transportenvironment.org/topics/ships#:~:text=Shipping%20emits%201%2C000%20Mt%20CO,contributes%20to%20poor%20air%20quality.

ii https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Fourth%20IMO%20GHG%20Study%202020%20Executive-Summary.pdf

iii https://www.statista.com/topics/11288/shipping-emissions-worldwide/#topicOverview

iv https://www.edie.net/maritime-emissions-uk-government-to-unveil-updated-net-zero-pathway/#:~:text=While%20maritime%20emissions%20have%20declined,UK%20transport%20emissions%20in%202022.

v https://www.edie.net/maritime-emissions-uk-government-to-unveil-updated-net-zero-pathway/#:~:text=While%20maritime%20emissions%20have%20declined,UK%20transport%20emissions%20in%202022.

vi https://www.gov.uk/government/news/course-charted-for-carbon-free-shipping-by-2050

vii https://www.imo.org/en/MediaCentre/HotTopics/Pages/Cutting-GHG-emissions.aspx

viii https://www.transportenvironment.org/te-united-kingdom/articles/the-uks-most-polluted-ports-ranks#:~:text=In%202022%2C%20in%20Milford%20Haven,cars%20in%20the%20same%20areas.

ix https://www.pnnl.gov/projects/port-electrification-handbook

x https://portsmouth-port.co.uk/about-us/sustainability/sea-change/

xi https://safety4sea.com/cm-uk-chamber-of-shipping-electrification-will-play-a-key-role-in-the-industrys-decarbonization/

xii https://safety4sea.com/cm-uk-chamber-of-shipping-electrification-will-play-a-key-role-in-the-industrys-decarbonization/