Abstract
Considering the rapid development of maritime logistics, the reduction of energy consumption at ports is important in the sustainable development of global economics. Oceans have been known as sources of clean energy, and wave energy is attracting more and more attention from both scholars and practitioners. Even though much effort has been made to develop advanced technologies of wave energy, it is still not clear how ports and electricity plants will evaluate its performance and make decisions on the investment. This paper analyzed the decision framework of ports and electricity plants that can decide how much to invest into wave energy converters, by considering the uncertainty of wave energy supply. A mathematical model is developed to obtain the optimal decisions of a single port and electricity plant for different cases. We show that in most cases, the port has a no lower motivation for investing in the wave energy than the electricity plant. Our theoretical analyses also shed light on the impacts of the parameters on the optimal decisions. Considering the difficulty in estimating the uncertainty of wave energy supply, we extend the distribution-free model to our problem which can make our model more practical.
Highlights
Greenhouse gas emissions are a serious problem in sustainability in the modern world
The Ministry of Transport of China announced China’s thirteenth five-year plan about the target reduction of greenhouse gas emission. It proposes that compared with the year of 2015, both of the energy consumption per unit throughput and CO2 emission of ports in China should be respectively decreased by 2% until 2020
The fixed cost of this implementation can be high due to the preliminary investigation into the wave condition, construction of infrastructure, staff training, and so on. This high investment leads to high average cost of wave energy that may make small ports or electricity plants hesitate to invest in wave energy converters
Summary
Greenhouse gas emissions are a serious problem in sustainability in the modern world. Many new approaches have been developed to reduce greenhouse gas emission on the side of energy supply for port and shipping, such as wind turbines, photovoltaics, wave energy, and foldable containers [2,3,4]. Even though the error can be limited within a range, making decisions to maximize the expected profit by considering the uncertainty of wave supply could be more appropriate in some cases than making decisions by using an exact amount of wave supply obtained from the prediction We show that this supply uncertainty makes the wave energy share the same modeling logic of newsvendor-type products (see Section 3).
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