UK non-domestic electricity averaged 25.1p/kWh in the second half of 2025 — against 16.8p/kWh in Germany and 10.6p/kWh in France — and that gap now threatens to strand Britain's first multi-berth shore power system as an underused asset.

Portsmouth International Port, which launched the UK's first multi-berth, multi-frequency, high-voltage shore power installation, says operators plugging into the grid pay millions of pounds more than they would burning diesel alongside. Three vessels were connected by late September, two of them operated by Brittany Ferries.

"We have an impressive, industry-leading, UK-first, environmentally-pioneering shore power system, but it's expensive," Portsmouth's port director Mike Sellers said. "So expensive that operators are taking a financial hit to use it, as electricity costs millions of pounds more than their usual diesel-based fuel."

Why are operators paying over the odds?

The economics are structural, not operational. Electricity accounts for 80-85% of what a vessel pays to plug in at Portsmouth, with port charges making up just 15-20%, according to a white paper published by the port authority in September with input from the British Ports Association (BPA).

Grid-based electricity carries network charges, policy costs and taxes that do not apply to marine fuels. BPA senior sustainability advisor Rhona Macdonald quantified the exposure: a £10/MWh premium on electricity adds £100,000 a year for every 10 GWh supplied.

That cost gap creates a self-reinforcing decline. "High electricity prices suppress utilisation. Low utilisation increases the cost that must be recovered from every unit sold. And higher prices further discourage vessels from connecting," Macdonald said.

For carriers, the arithmetic is blunt. Brittany Ferries chief executive Christophe Mathieu described plugging in as "prohibitively" expensive and warned that shore power installations across the UK could become redundant assets if operators simply decline to use them.

What is the government being asked to do?

Sellers points to a precedent already set in Westminster. The UK government has temporarily removed the 5% VAT previously applied to qualifying domestic electricity bills in England, Scotland and Wales, effective 1 October 2026 through 31 March 2027.

Business electricity generally attracts the standard 20% VAT rate, with only some supplies qualifying for reduced or zero rates. Sellers argues shoreside power deserves the same treatment domestic users have received.

"Recognising shoreside electricity as a marine fuel and removing VAT would be a quick measure to help address this issue," he said.

The white paper calls for government intervention to narrow the cost gap. Macdonald set out three levers:

• Reduce the tax burden on electricity supplied at ports
• Review network charges that weigh heavily on shore power infrastructure
• Consider targeted support to lower the price operators pay for electricity

What does this mean for shippers and ports?

For port authorities that have already committed capital to high-voltage connection infrastructure, the risk is stranded investment. Portsmouth built the system; the market signal now discourages the very utilisation that would justify it.

For carriers, shore power shifts from a decarbonisation win to a line-item cost — one that competing ports in France and Germany do not impose at the same level. A ferry operator choosing between a UK berth and a Continental berth faces materially different plugging-in costs for the same emissions saving.

The BPA's figures frame the competitiveness problem squarely: UK operators pay roughly 50% more per kilowatt-hour than their German counterparts and close to two-and-a-half times the French rate, taxes and levies included.

Unless the Treasury extends the VAT relief logic to shoreside electricity or Ofgem revisits how network charges land on port infrastructure, the UK's shore power build-out risks stalling at the socket — with vessels reverting to burning marine diesel at the quay and newly installed connection equipment sitting idle.