Victoria's cruise port aims for shore power integration amid fiscal uncertainty

James MacDonald / Capital Daily

As the global shipping and cruise industries look toward a green future focused on sustainability, Victoria is preparing to join a group of ports committed to the growing adoption of shore power. Shore power allows ships to plug into the electrical grid while docked, drastically reducing their environmental impact.

On Thursday, federal Transport Minister Anita Anand announced $35.5 million in funding to increase infrastructure at BC ports and terminals as part of its Green Shipping Corridor Program. The program is designed to create domestic supply chain resilience, and to reduce the impacts of emissions and noise from vessels on coastal communities and the environment.

“Investments like this in infrastructure are channelled towards making the highest and best use of time and resources,” Anand said at the announcement at Ogden Point.

On Thursday, federal Transport Minister Anita Anand announced $35.5 million in funding to increase infrastructure at BC ports and terminals as part of its Green Shipping Corridor Program. The program is designed to create domestic supply chain resilience, and to reduce the impacts of emissions and noise from vessels on coastal communities and the environment.

“Investments like this in infrastructure are channelled towards making the highest and best use of time and resources,” Anand said at the announcement at Ogden Point.

It also ensures that we're making use of available supply chains in a green manner.”

The biggest portion of the investment—$22.5 million—was earmarked for Ogden Point to install onshore power (OSP) for cruise ships.

Onshore power is one of the most promising technologies used to decarbonize the cruise and shipping industries. Cruise ships dock with the engines running to provide the power needed onboard, but by allowing vessels to shut off their engines while docked, shore power reduces both greenhouse gas (GHG) emissions and air pollution. According to the Cruise Lines International Association (CLIA), 85% of cruise ships set for delivery over the next four years will have the capability to plug into shoreside electricity

Victoria is poised to follow in the wake of other cruise ship ports such as Vancouver, Seattle, and Juneau, which were among the first along the West Coast to offer shore power plug-in options. In 2022, electrical infrastructure was installed at Prince Rupert Terminal’s north berth and upgrades were made to the south berth through a partnership between the Prince Rupert Port Authority (PRPA) and BC Hydro.

Ports like Victoria, where vessels with high energy consumption, such as cruise ships, make frequent calls and stand to benefit the most environmentally from OSP technology in their promise of significant reduction of Greenhouse Gas (GHG) emissions.

At the announcement, GVHA Board Chair Mark Mawhinney said the 316 cruise visits to Ogden Point last year brought some 970K passengers to Victoria—equalling cruise ship numbers from 2023, with 10 fewer ship visits. Many of those passengers disembark and visit Victoria, albeit only for a handful of hours, but long enough to contribute an estimated $113 million to the local economy, supporting some 800 related jobs.

A Maritime Impact report shows traditional cruise ships require 10–100 megawatts of power for propulsion, lighting, air conditioning and on-board amenities. To put that in perspective, a single megawatt can power between 400 and 900 homes. The power used by the hotel facilities on cruise ships represents 47% of their electricity requirements.

Given those steep energy requirements, the successful adoption of shore power in Victoria depends on the will of the cruise ship owners and operators. The good news is that cruise lines like Disney, Princess, and Norwegian, which frequent Victoria's harbour, have already embraced shore power technology in other ports.

This onshore power project aligns with the city’s net-zero environmental initiatives at the same time the cruise industry is seeking to reduce its carbon footprint. Victoria's ability to offer shore power could give it a competitive edge in attracting environmentally conscious cruise lines.

However, with shifting fiscal priorities—following a Yes vote in last weekend’s referendum to allow the city to borrow $160+ million to build a new Crystal Pool and Premier David Eby’s announcement on Thursday, that the province was facing a $9-billion deficit—the city's progress on the project will not be without challenges.

Funding is one of them; hydro supply is another.

The announcement of the deficit could result in some provincial clawbacks or delays in previously promised funding for various initiatives, including the hydro upgrades and the shore power retrofit.

The money from the feds looks secure. Anand said the money had already been committed in previous budgets, and that some of it was “is flowing already.”

Provincial fiscal uncertainty, though, puts pressure on the Greater Victoria Harbour Authority (GVHA), which owns and operates deep-water marinas and upland holdings throughout Victoria's harbour.

The GVHA will be on the hook for a portion of the costs associated with the shore power integration, though the exact cost-sharing agreement with the City of Victoria is unclear and Capital Daily was unable to get a response from either the city or the GVHA, prior to publication, on what that cost-sharing model might look like.

The city and GVHA will need to collaborate closely on complementary infrastructure elements to ensure the project's success. Additionally, the GVHA may need to prepare for potential cost overruns, particularly given the uncertainty surrounding funding from the provincial government.

In Montréal, the 2017 retrofit of the Alexandra Pier to accommodate shore power was funded through a cost-sharing model, with the federal government contributing $5 million and the provincial government of Québec providing $3 million. The Montreal Port Authority covered the remaining costs. However, the escalating costs of construction and labour, in recent years, raise the concerns that the price tag for a similar, albeit smaller project in Victoria could be much higher than the $22.5 million offered by the feds.

Critical among its cost challenges is ensuring that the local electrical grid can provide sufficient power for the additional demands of electrified terminals. The potential need for additional power sources to meet the demand of shore power facilities is a concern, as the current supply grid may not be large enough to handle multiple high-demand terminal berths at Ogden Point at the same time.

Last year, the province announced $3.2 billion in funding for new power lines, electrical stations and hydro infrastructure as part of its $36 billion rollout of upgrades provincewide over the next decade. BC Hydro  likely would be one of the key suppliers of this energy, but with the province's fiscal situation in flux, it remains to be seen whether there will be enough political will to fund any necessary hydro infrastructure upgrades.

Some wind for the sails of the project may come from the fact that, as was the case with the Montreal retrofit, the bulk of the revenues generated by the sale of electricity from ships at berth was collected by the provincial government because the supplier, Hydro Québec, is a Crown corporation. BC Hydro is also a Crown corporation and will benefit from the sale of energy to the port electrification project, but only if it can get the power there in a cost-effective way.

In Montreal, Hydro-Québec installed a new 25-kilovolt line to supply power to a new substation at the cruise terminal. The question for Victoria is whether BC Hydro will be able to provide the necessary infrastructure in a cost-effective way, especially given the budget constraints facing the provincial government.

There are other options.

In some cases, ports have explored alternative power generation systems, including LNG (liquefied natural gas) generators and renewable energy sources like wind and solar power, to mitigate the risk of power shortages. These solutions, while effective, come with their own set of environmental and financial trade-offs. The installation of LNG generators at Ogden Point would add to the city’s carbon footprint, not subtract from it.