Optimising port energy systems: key steps to a successful energy transition
As ports accelerate their transition toward net zero, the complexity of multi-vector energy system planning is growing. With mounting pressure from regulatory frameworks – in the EU, for example, brought in through the EU Green Deal and Fit for 55 – and from ports’ own net zero commitments, maritime stakeholders must make strategic decisions that balance sustainability, cost-efficiency and operational resilience.
We have previously highlighted how the critical issue of grid capacity at ports has emerged as a central challenge and how solutions to help grid network operators anticipate ports’ future needs are vital to overcome this issue.
One of the most powerful tools in ports’ energy decision-making arsenal is energy system modelling, underpinned by two critical metrics: Levelised Cost of Energy (LCOE) and Levelised Cost of Storage (LCOS). These metrics can unlock the optimal mix of renewable generation and storage technologies for port environments.
Understanding LCOE and LCOS: the financial lens for decarbonisation
LCOE represents the average cost per unit of electricity generated over the lifetime of a power generation asset. It accounts for capital expenditure including integration costs, operational costs, fuel costs (if applicable) and asset lifespan. This metric enables ports to compare technologies on a like-for-like basis, regardless of scale or location, including solar PV, wind or hydrogen fuel cells.
LCOS, on the other hand, applies the same principle to energy storage systems. It calculates the cost per unit of electricity discharged from a storage asset, factoring in installation, maintenance, efficiency losses and degradation over time. This is particularly relevant for ports considering battery storage, thermal storage or other energy storage systems to manage energy load variability and ensure energy security.
Together, levelized costs of energy and storage provide a comprehensive view of the financial viability of decarbonisation technologies. But they are only as useful as the assumptions behind them – which is where sensitivity analysis becomes essential.
Sensitivity analysis: navigating uncertainty with confidence
Ports operate in dynamic environments where energy demand, fuel prices and technology costs can shift rapidly. Sensitivity analysis allows decision-makers to test how changes in key variables affect the overall cost and feasibility of energy solutions by exploring different scenarios, such as:
- Shore power adoption rates for visiting vessels.
- Electrification of transport and machinery within and around the port.
- Future fuel and electricity price trajectories (e.g. e-methanol vs. LNG).
- Seasonal demand fluctuations and peak load profiles.
- Energy efficiency improvements across industrial users.
By modelling these scenarios ports can identify the least-cost combination of generation, storage and demand-side management options. This approach revealed not only the most financially viable technologies but also the optimal timing and scale for deployment.
Sensitivity analysis is not just a technical exercise – it’s a strategic imperative. It enables stakeholders to build resilient investment plans that can adapt to policy shifts, market volatility and technological innovation.
Strategic recommendations for integrating renewables and storage in port environments
Based on our tried and tested methodology and industry best practices, Ricardo have the following key recommendations for EU ports seeking to integrate renewables and storage technologies effectively:
- Adopt a place-based planning approach: each port has unique energy needs, industrial users and geographic constraints. A place-based strategy ensures that solutions are tailored to local conditions, maximising environmental and economic benefits.
- Prioritise technologies using LCOE and LCOS metrics: use these metrics to screen and rank candidate projects. Focus on technologies with the lowest cost per unit of energy or storage, but also consider co-benefits such as emissions reduction, grid stability and community impact.
- Combine generation with demand-side management and storage: renewables alone may not meet peak demand or ensure reliability. Integrating demand-side management programmes (e.g. load shifting, energy efficiency) with battery or hydrogen storage can create a balanced, flexible energy system.
- Assessment of avoided costs: the adoption of low or zero emission technologies may reduce operational costs through efficiency gains.
- Plan for grid connection and reinforcement costs: grid infrastructure can be a bottleneck. Early assessment of connection points, capacity limits and reinforcement requirements are critical to avoid delays and cost overruns.
- Seek expert guidance: energy system modelling, financial analysis (assessing IRR and NPV) and scenario planning require specialised expertise. Engaging consultants with deep technical knowledge and sector experience can accelerate progress, reduce risk and ensure strategic alignment.
From metrics to momentum
LCOE and LCOS are more than just numbers – they are strategic tools that, when combined with sensitivity analysis and expert guidance, can transform how ports approach decarbonisation. By investing in robust planning and experienced consultancy, ports can unlock cost-effective, resilient energy systems that position them for long-term success in the green transition.
Ricardo’s experienced team can provide support, clarity and confidence in the optimum route to decarbonisation for ports. By completing an in depth assessments of a port’s unique circumstances – from space and location to environmental and operational – our experts work to understand the options available, and rank these on a feasibility scale to deliver the current and future energy requirements to ensure a sustainable, low carbon and future-proof solution for the port and its wider network of stakeholders.
Utilising our extensive knowledge and experience in port decarbonisation, our expert team developed a tool which targets the specific needs of the ports and maritime sector. Using this tool, ports can manipulate the factors affecting their energy use to demonstrate the impact of changes in demand or energy sources. This enables strategic and informed decisions to be made prior to investment in energy and fuel changes, with clear expectations for return on investment and long-term decarbonisation goals.
Contact Ricardo today for a conversation about how to optimise your port’s energy systems to meet GHG targets at minimum cost. Ricardo’s in-house optimisation modelling capability for ports as energy hubs is an ideal solution to identifying cost savings for your energy transition investments.
