Optimal subsidy design for shore power usage in ship berthing operations

Maritime transportation is the backbone of international trade but ships emit a large amount air pollutants at ports. To encourage to use clean energy while berthing port, subsidies are provided ship operators that and subsidy generally determined based on subjective judgment. We, therefore, examine optimal design for government-operated ports, aiming balancing environmental benefits expenses. Considering uncertainty requirements by ships, we build stochastic optimization model. Taking advantage problem structure, convert model into deterministic one applying sample average approximation binomial distribution. The then linearized solved CPLEX. A series numerical experiments with realistic parameters conducted validate useful managerial insights obtained.