41 minute read
Conversion costs
MAN SEES ECONOMICS FOR LPIG CONVERSIONS CLOSE TO PARITY
With the looming introduction of EEXI and CII rules from 2023 as well as Scope 3 emissions reporting, shipowners are taking a close interest in the economics of engine conversions
8 The BW Gemini,
a VLGC from the BW LPG fl eet, has had its MAN B&W 6G60ME-C9.2 main engine retrofi tted to an MAN B&W 6G60ME-C9.5LGIP dual-fuel type, capable of operating on fuel oil and LPG
While the majority of attention has focused on the development of alternative fuels for the maritime industry as a means of meeting the IMO’s medium and long-term decarbonisation targets, comparatively less attention has been placed on the development of solutions that help existing vessels to meet decarbonisation targets.
MAN Energy Solutions has been focusing a significant amount of attention on the development of conversion solutions, leveraging its experience pioneering the conversion of low-speed, two-stroke engines to operate on a range of different alternative fuels.
Klaus Dahmcke Rasmussen, Head of Projects and PVU Sales at MAN PrimeServ explained to The Motorship that the focus of discussions around conversion projects was increasingly shifting away from discussions around technical feasibility, which had been demonstrated, and moving towards detailed considerations of economic and environmental businesses cases on a ship-level basis.
This represented a change from the earliest conversions, which had been completed on a trial basis, such as the conversion of the Wes Amelie to operate on LNG in 2017.
Converting VLGC conversion interest
Rasmussen noted that the very large gas carrier (VLGC) segment represented a particularly interesting market segment at the moment. The newbuild market has adopted the MAN B&W ME-LGIP engine as the standard for very large gas carriers since 2020, Rasmussen said (see “ME-LGIP advantages for VLGCs”).
Commercial enquiries around the possibility of converting a number of vessels to operate on LPG were continuing to arrive, and MAN hoped to be in the position to announce a number of further projects in spring 2022, Rasmussen said.
When asked by The Motorship why the majority of owners of the remaining 147 very large gas carriers were continuing to take a wait and see approach, Rasmussen responded that there was a perception that conversion costs would be too high.
Rasmussen noted that careful analysis of the cost of converting an existing VLGC to operate on LPG fuel revealed that the cost of conversion was essentially comparable with the price differential between ordering an LPG-burning newbuild compared with a diesel-fuelled VLGC.
Rasmussen noted that the estimates were based on the cost of the latest BW LPG conversions, adding that newbuilding costs might vary depending upon whether an order was placed with a Korean or Chinese yard. Similarly, the cost of the fuel supply system could be rationalised if a direct connection with the cargo tanks were specified, potentially eliminating the need for Type C deck mounted fuel tanks.
The scope for further reductions in the costs of engine retrofits was limited, as MAN PrimeServ was already able to leverage its purchasing power to supply parts competitively.
Future proofi ng investments
After discussing the economic and operational advantages for shipowners looking at converting their VLGCs to operate on LPG, Rasmussen began to look at the environmental aspects of ship retrofits.
8 Klaus Dahmcke
Rasmussen
One particular area of interest was how extending the operational life of a vessel would reduce the overall impact of the greenhouse gas emissions generated during the ship’s construction across its life span.
“Just as keeping your car for a year or two longer reduces the overall environmental impact [because the car assembly step is the most carbon-intensive stage of a car’s operational life], we think that extending the operational life of vessels is also an environmentally friendly thing to do.”
Rasmussen noted that converting a VLGC to operate on LPG fuel was significantly ‘greener’ than ordering a newbuilding, purely from the perspective of the emissions produced during the conversion.
“The emissions produced during a conversion are around 2,000 tonnes of CO2 equivalent, or 3% of those required for a newbuilding,” Rasmussen said, noting that this covered both the steel production step, as well as the painting, welding and yard power supply steps.
Learnings from BW Gemini conversion
In 2020, BW LPG commissioned the conversion of its very large gas carrier BW Gemini to operate on a two-stroke LPG dual-fuel engine.
The conversion of the main engine of the BW Gemini to a MAN B&W 6G60ME-LGIP dual-fuel type, capable of operating on fuel oil and LPG, from its original MAN B&W 6G60ME-C9.2 configuration in 2020 had been an important project for a number of reasons.
The project, which had been carried out with fuel gas supply system partner Wartsila Gas Supply and Chinese yard Yiu Lian, had demonstrated the importance of dedicating experienced project management and skilled engineering teams to the project.
“Treating conversion projects as a simple retrofit runs the risk of overruns,” Rasmussen noted, adding that Yiu Lian had demonstrated a high level of professionalism and competence throughout the series of BW LPG conversion.
CII and EEXI implications
While such discussions about the lifecycle emissions
Table 1 – Comparison of Price diff erentials Vessel Prices, US$ Time frame Off hire
VLGC Newbuilding with LGIP engine 83 – 88 18-24 Not applicable
VLGC Newbuilding with conventional engine 75-78 18-24 Not applicable
Retrofit to LGIP of existing Engine 11 12-14 60 days (Scheduled dry dock + 40 days)
Source: MAN Energy Solutions, 25 October 2021
Table 2 – Composition of Retrofi t costs
Investment Prices, US$ Activity Supplier
Engine retrofit 3.6 Engine Conversion, installation, commissioning, Gas & Sea Trial MAN ES
FGSS and tanks 4.5 Fuel Gas Supply System, Tanks and Design specification Wartsila Gas Supply
Shipyard work 2.0 Various Yiu Lian Dockyards Owner 0.9 Logistical costs, parts and local agency. Ship owner
Source: MAN Energy Solutions
generated from a dual-fuel retrofit are currently of most interest to company sustainability managers, the precise methodology for life cycle assessments is currently being discussed at the IMO. Such issues may become relevant for shipowners and their finance providers in the future, The Motorship notes. The current focus of many shipowners and financiers is about the impact of IMO EEXI and Carbon Intensity Indicator (CII) rules on assets, once they enter effect in 2023.
Rasmussen notes that for a 84,000cbm VLGC, a conversion to operate on ME-LGIP would offer a 14% improvement in EEXI score. This would improve the vessel’s performance, so that it was comparable with an EEDI Phase 3 compliant newbuilding.
A similar improvement was seen in the CII performance, with Rasmussen estimating that the CII rating for a 84,000cbm VLGC would be improved by a 16%.
“If shipowners opt for LPG, their vessel will not go into [CII] Class D before the end of the vessel’s operational life,” Rasmussen said. By comparison, vessels that continue to operate on HSFO as at present will fall into [CII] Class D by 2025.
ME-LGIP advantages for VLGCs
The operational advantages for VLGCs have seen the VLGC segment rapidly adopt LPG-fuelled propulsion as a standard. “All newbuilds ordered since 2020 have specified LPG-burning main engines, reflecting the operational advantages that LPG engines offer.”
The MAN ME-LGIP engines offer around an 8% reduction in fuel consumption compared with conventional diesel-fuelled engines, while opex costs are reduced, as steam boiler and purifier requirements are lowered.
One additional operational advantage was an increase in vessel availability. Restrictions on SIMOPS for VLGCs mean that eliminating the regular monthly bunkering halt could increase operating up time by up to 180 hours a year.
While fuel differentials between LPG and HSFO have reversed in recent months, this reflects the current volatility in energy markets, The Motorship notes. Based on average price differentials between oil and gas prices seen over the past five years, operators of VLGCs would expect to see operational savings of several thousand US dollars per day. “Unfortunately, markets are not like engines. Past performance isn’t always a good guide to future behaviour,” Rasmussen noted drily. Looking ahead, there is greater certainty about upcoming CO2 emission reduction requirements. By switching to ME-LGIP engines, BW LPG has stated that it expects to lower CO2 emissions by around 3,000 tonnes per year. The fuel offers wider environmental benefits, with sulphur emissions lowered by between 90% and 100%, and NOx emissions reduced by 10-15%, and CO2 between 13 and 18%. Particulate Matter (PM) emissions were reduced by 90%.
ESD SUPPLIERS SEE REGULATORY FACTORS FANNING INTEREST
Regulatory factors are stoking interest in ESD solutions from some trades, although a broader industry-wide focus on fuel effi ciencies, and altering fuel supply economics, are also contributing, Kari Reinikainen hears
It is a sign of maturing interest in fuel effi ciency technology that customers are moving beyond technical discussions towards detailed discussions about the economics of investments. The payback periods are already within two to fi ve years, before taking into account potential future rises in fuel prices, or the imposition of carbon surcharges.
“We cannot wait for new propulsion technologies or future fuels but need to act now reduce emissions as much as possible,” said Marc Sima, co-founder and CEO of Fuel Save GmbH in Germany.
FuelSave technology
The company, founded in 2012, started business by focusing on how to reduce emissions from trucks and utility vehicles, but quickly expanded its scope to include the maritime sector. Its FS Marine system uses intelligently controlled hydrogen syngas generator and injector, which combine proprietary gas injection with other processes to enhance the efficiency of diesel engines.
The system reduces fuel consumption between 10% and 15%, cuts CO2 emissions by about the same amount, filter smoke number (FSN) by 40% and NOx by between 30% and 80%, the company says. Engine wear and tear will also be reduced by the use of the system, which cuts maintenance and repair costs.
Sima said that the demand for the company’s products is very strong. Maersk McKinney Centre for Zero Carbon Shipping said in late October said that the global shipping industry would not be able to meet a target of net zero emissions by 2050 without a levy on fuel to encourage the use of alternative fuels. This has emphasized the need to act now, Sima noted.
Sima distinguished between the wider market, where certain sectors such as container shipping were coming under intense pressure from large customers to reduce their net emissions, and FuelSave’s own business.
The largest market for FuelSave at the moment is the offshore oil & gas industry, where tightening environmental regulations in certain markets are creating a need to reduce emissions, Sima concluded.
Sima noted that economics of investing in efficiency devices were changing in the commercial shipping market. The FS+ system was particularly well suited to vessels with high hotel loads or large auxiliary draws, such as cruise ships or vessels that spend a significant amount of time on dynamic positioning. He noted that those were precisely the vessel types that were likely to be most affected by the carbon intensity index (CII).
“We aim for a payback time of three years and below and try to only focus on such projects where this is feasible,” Sima told The Motorship.
The actual payback time depends on numerous factors, such as the usage of the ship, the load and operational profiles, the annual fuel oil consumption, the emission tax area, the fuel oil price etc. “The higher the fuel oil cost, the faster the return on investment,” he summarised.
Credit: SAL
Credit: Orcan Energy 8 FuelSave fi tted
its FS+ kit on the MV Trina, where it was applied to both the main 12.5MW 58/64CD MAN engine and three 1MW auxiliaries
8 Installation of an
effi ciency PACK on the Van Oord hybrid water injection dredger, Maas
Waste Heat Recovery
Other energy saving devices, such as waste heat recovery technologies, are also reporting increasing demand. The rise in LNG-fuelled shipping is increasing interest in waste cold recovery as an additional source of efficiencies, while expectations of higher fuel prices for alternative fuels in the future are also fanning interest.
Orcan, another German technology group that offers energy saving solutions to the maritime industry, points out that there are four sources of waste heat that can – and should – be used to generate electricity. These are exhaust gases, jacket cooling water, thermal oil and waste steam. Its efficiency PACK can generate between 100 kW to 200kW of electricity per module and each module can cut CO2 emissions by up to 450 tonnes per year.
The company ran a development project of marine products jointly with MTU, the diesel engine builder, from 2014 to 2017 and the first system was installed on a Dutch hybrid propulsion domestic ferry in 2017. The product rollout took place last year and more than 20 projects are currently in development.
“Typically, we target an internal rate of return of up to 20, or a payback of two to four years, or in case of a newbuilding ship, the installation must create a positive accumulated cash flow from day one of operation. Assets are financed, so fuel savings minus finance cost must be positive from day one,” said Marcel Flipse, Head of Marine Applications at Orcan.
A payback time between three and five years is the target for Climeon, a provider of energy efficiency technology, headquartered in Stockholm, Sweden. Running hours, available waste heat, fuel type, whether the ship in question is a newbuilding or retrofit and generator type all affect the payback time, said Fredrik Thoren, Head of Maritime at Climeon.
Its waste heat recovery technology, the Climeon Heat Power System, uses principals of an Organic Rankine Cycle (ORC), but at much lower pressure levels.
“The patented low-pressure technology allows for optimal efficiency from low-temperature heat sources such as jacket cooling water. Exploiting the temperature difference between the hot and cold water sources, Climeon’s Heat Power System produces usable electric power for the ship’s electrical demand, reducing the load on the ship’s generators,”
A control system automatically and continuously ensures that the power output is maximised or optimised, based on site preferences.
“The system's compact and modular design offers the highest efficiency conversion of low-grade waste heat within the ORC market, and its ability to utilise sea water as the cooling source, allows for simple integration with the vessel's existing systems and makes it highly suitable for marine applications,” he told The Motorship.
As a proven technology since 2015, the Climeon Heat Power System has received approval from major certification companies and helped ship owners like the Finnish cruise ferry company Viking Line and Virgin Voyages to increase their energy efficiency, saving fuel costs and reducing impact on the environment.
“We have had a pilot installation Climeon Ocean 100 installed on Viking Grace - this was the first generation of Ocean system with a nominal power output of 100 kW (maximum 120 kW). This installation was a part of EU project, so the cost of equipment and installation received an EU contribution,” recalled Kari Shao, Project Manager at Viking Line.
Generates 700 MWh per year on large cruise ferry
Viking Grace is a 57,565 gross ton cruise ferry that entered service in 2013. It was one of the first large dual fuel engine passenger ships and it has used LNG as fuel since entering service. Shao is now project manager for Viking Glory, a 63,000 gross ton newbuilding nearing completion at the Xiamen shipyard in China.
“Viking Grace was, already before installing Climeon Ocean, the world’s most environmentally-friendly passenger ferry. With the Climeon Ocean this was further improved. The Climeon Ocean system was installed in 2015 on Viking Grace and has proven to deliver more than 700 MWh of electricity per year from heat that otherwise should be wasted. This corresponds to almost 300 tons of CO2 saving per year, and a payback time including integration costs of less than three years,” Shao pointed out.
Viking Grace is powered by four eight cylinder Wartsila 50 DF engines with a combined output of 30,400 kW that drive electric motors connected to two propellers.
With the system fully deployed, one ship has the potential to save up to 750 tons of fuel and up to 1,900 tons of CO2 per year. “On Viking Glory we have the new model of this ORC and what’s new is a steam turbine,” Shao noted.
Shao declined to comment on the payback period for the installation, citing commercial confidentiality, as Viking Line was not involved in the equipment procurement.
However, Shao acknowledged that there is a great interest in cost effective fuel efficiency equipment. The speed with which regulations are introduced appeared to be outpacing the development of new technology, Shao said, adding that the company had specified that Viking Glory should have this state-of-the-art technology installed.
“To inform the public about this technology is a little more difficult when it’s not visible as a sail or solar panel,” Shao concluded, referring to an experiment to use a Norsepower concluded, referring to an experiment to use a Norsepower rotor sail on Viking Grace.rotor sail on Viking Grace.
8 The Viking Glory
will be feature Climeon’s new steam turbine when it enters service
8 Marc Sima,
ceo of FuelSave
BABCOCK LGE SEES MULTIFUEL FUTURE FOR SHIPPING INDUSTRY
Andrew Scott, Business Development Director at Babcock LGE, shares his thoughts on the emerging alternative fuel markets and gives an insight into the market leading technology of LGE in an exclusive interview with The Motorship
Since we interviewed [Babcock LGE’s Technical and
Sales Director] Alan Duckett in 2019, we have seen signifi cant developments in market for alternative liquid and gaseous cargoes. Could you share your perspective on how you expect the changing composition of energy generation to lead to changes in types of cargoes transported by sea?
While investment in the production of renewable energy has risen significantly over the past few years, action must be taken before we reach 100% renewable energy, which will require huge investment and could be perhaps decades away.
Demand for ‘cleaner’ fuels like LPG, LNG and ethane has increased, requiring many newbuild liquefied gas carriers to meet global transportation requirements. We also expect to see an increase in the transportation of both hydrogen and ammonia over the next few years, driven by increased demand for zero carbon fuels across the market.
Separately, but linked, is LCO2 shipping, which is required to ship CO2 captured at emission source, liquefied and transported to depleted offshore oil fields for long-term storage. As more Carbon Capture and Storage (CCS) projects come into operation, there will be growing demand for this kind of carrier. These may be dedicated LCO2 carriers, or multi-gas carriers – with LPG or ethylene capability for example – dependent on the project specifications. Zero carbon emission targets will inevitably limit the growth of the LCO2 shipping market over the long term, but as previously mentioned, immediate action is necessary to limit the growth of global carbon emissions, meaning these vessels will serve an important role in the mid-term.
Do you have any expectations about increased demand for LPG, or hydrogen carriers such as ammonia and methanol?
Ammonia, LPG and methanol will each have an important role to play in the short to medium term fuel mix, however, ammonia, especially ammonia produced from renewable energy, is the only one which can deliver zero carbon emissions. It is therefore likely to see the most investment and growth over the next 10-20 years.
In terms of the demand evolution for ammonia, LPG and methanol, it is useful to take LNG as an example. LNG has been used as fuel on LNG carriers for many years and its use as a transition fuel on a number of other ship types has been a big step in the right direction. While LPG and ammonia differ from LNG in that they are utilised as liquid fuels, as opposed to vapour, and bring additional ‘challenges’ – LPG is heavier than air and will settle to the bottom of an engine room or machinery space, ammonia is toxic – they are likely to experience a similar evolution process. Their technical issues are not insurmountable and are already being addressed for gas carriers burning LPG or ammonia as fuel but, as with the expansion of LNG into nonLNG carriers, the education and training processes for operators of other ship types cannot be ignored.
QCould you discuss how you see the prospects for novel fuels, such as hydrogen, or new trades such as
liquid CO2? Do you think the expansion of LCO2 will depend upon the introduction of an international carbon price?
Whilst hydrogen is – on paper – a great option as an alternative fuel, in practice it is much more complex. Today, there are limited quantities of renewable hydrogen (also known as Green Hydrogen) available, with almost all hydrogen currently produced by Steam Methane Reforming (SMR), which creates H2 during methane production – therefore still utilising fossil fuels. To obtain quantities of Green Hydrogen sufficient to meet global energy demand – and at an affordable price - will be a monumental task. Q Existing global infrastructure would require upgrading to handle hydrogen in the energy grid and supply chains will have to be established. Shipping hydrogen, as would be required due to the nature of global supply and demand centres often being separated by thousands of miles, is another issue, as it is currently difficult to contain and transport as a liquid economically due to its physical properties – namely the requirement to be stored at 253°C – as well as low density, wide flammability range and small molecular size. However, hydrogen is high on the agenda of many governments worldwide and with their financial backing – as well as from financiers with a green agenda – multiple projects are working towards solutions for the above mentioned problems. LCO2 shipping is forecast by many to be a market set to ‘boom’. The number of Carbon Capture and Storage (CCS) projects is growing at a rapid rate, driven by the required decarbonisation of hard to abate industries like steel and cement manufacture. CCS is also high on the agenda of many governments – similarly to hydrogen – and is therefore seeing significant investment from both public and private sector finance.
A
8 Andrew Scott,
Business Development Director at Babcock LGE
A low carbon price has been a major factor causing the lack of progress in the Carbon Capture and Storage (CCS) market, as it is simply uneconomical for companies to pay for the infrastructure required when the price for emissions is so low. However, the carbon price of the EU Emission Trading Scheme (ETS) is now up over EUR50/tonne, and only likely to increase. Therefore, it is safe to assume that, with growing pressure from governments and the general public, many of the larger carbon emitters will turn to CCS in the not so distant future.
Turning to Babcock LGE’s work in developing Fuel Gas
Supply Systems for alternative fuels, you have been at the forefront of such developments. Could you share any details about your research into the development of systems for the new fuels, noting the fuel-specifi c technical challenges each poses for product developers.
With more than 50 years’ experience in liquefied gas and a record of consistently securing over 50 percent of the market share in LPG cargo handling systems, it was a natural extension of LGE’s capabilities to design and deliver the world’s first newbuild LPG Fuel Gas Supply System, ecoFGSS™. LGE’s system has been market leading ever since and we have secured more than 20 contracts, with six now in service, operating worldwide.
As always with designing a brand new system, there were some technical challenges, but with co operation between all the parties involved, these were resolved. Working closely with the engine manufacturers as they ‘fine-tuned’ their designs for the new fuels was vital, from the initial design phase though to commissioning and sea trials. The gas shipping industry has an enviable safety record and the development of ecoFGSS™ maintained this as a core objective.
In addition, LGE has also been contracted to deliver ethane fuel gas supply systems for four Very Large Ethane Carriers (VLEC)s, the first of which will deliver in November 2021. This system – named ecoETHN® - enables the carriage of higher methane content commercial ethane cargoes by integrating the vessel’s reliquefaction system with the fuel gas supply system. ecoETHN® provides condensation of ethane/ methane Boil-Off Gas (BOG) from the reliquefaction system to the fuel gas supply system, with up to 2.0 mol% methane in the liquid phase. By harnessing the methane component specifically as an energy/fuel source, the methane content of the cargo is reduced during the voyage, resulting in a ‘purer’ cargo on delivery.
As a next stage of development, LGE is considering ammonia as a fuel for shipowners and making the necessary design adjustments to allow ammonia as a fuel on-board both gas carriers and other ship types. Toxicity is a key consideration, but these challenges can be overcome, as we have been designing systems for ammonia carriage for many years. ecoFGSS™, which has been designed for LPG, will be ‘upgraded’ to ecoFGSS-FLEX®, allowing owners to utilise LPG, ammonia, methanol or DME as their fuel of choice.
One issue that all alternative fuels face is that their energy density is less than conventional fuels, resulting in a greater volume being carried for the same energy output – but that is an inevitable consequence of the change. As the use of alternative fuels increases, the bunkering infrastructure to support this growth has to be addressed – the industry cannot face the same ‘chicken and egg’ scenario that the uptake of LNG as a fuel experienced.
Could you share any details about research or newbuilding projects in which you are active?
In addition to internal development projects, LGE has been involved in a number of alternative fuel projects involving shipyards, shipowners, engine manufacturers, Classification societies and flag states. The two projects that are in the public domain are AiP from ABS for an ammonia fuel gas supply system and AiP from DNV for a dedicated ammonia carrier utilising ammonia as fuel. The latter was a joint development project with a number of key industry players, including Navigator Gas, MAN, DNV, and the Norwegian Maritime Authority (NMA), to develop a fully ammonia optimised mid-sized gas carrier, ready for the ammonia revolution.
8 xxxxxxxxx
ecoSMRT® Competitor 1 Competitor 2 Competitor 3
Specific power consumption (kWh/kg) 0.656 1.040 0.952 0.937
Relative efficiency 100% 63% 69% 70% Reliquefaction rate at 100% capacity (tonne/hr) 1.900 1.700 1.600 1.700
8 ecoSMRT®
delivers higher reliquefaction capacity for lower power consumption
Q A
QTurning to your existing product portfolio, you have established a leading position as a supplier to the
LPG market. Your Vent Gas Cooler (VGC) solution is widely used among LPG carriers. Are you looking at upgrading the solution’s performance? Separately, you are seeing increasing uptake of your new LPG FGSS for vessels operating on LPG? Are there possible areas where you can improve the performance of two systems through integrating the two systems?
AIn terms of the VGC™, we are looking at new ways to improve/upgrade the system, either by increasing the efficiency or reducing the cost, and ideally a combination of both. However, we are, as is everyone in the business, constrained by the laws of thermodynamics in terms of increasing efficiency. Our ecoETHN® design for ethane already integrates the reliquefaction and fuel gas systems, and a similar development for LPG is under investigation. Of course, whatever comes out of this will be applied to ammonia and other fuels. The uptake of LPG fuel gas supply systems is likely to increase as owners’ future-proof their assets, but the use of LPG as the primary fuel will, of course, be influenced by the market price for LPG compared to conventional fuels.
QTurning to LNG, you have established solutions for LNG carriers. The ecoSMRT reliquefaction system is
particularly competitive in terms of energy consumption and space requirements, refl ecting the integrated precooling step, for example, when it launched. Are you looking at further product refi nements?
AecoSMRT® is always being looked at from the perspective of refining/improving the initial objectives of reduced CAPEX, reduced OPEX and deck space required, with a view to maintaining the competitive advantage. Of particular importance is operational feedback from the many systems in operation and incorporating these into future designs, ranging from software tweaks to changes to items of equipment.
The refined/improved design is also being stretched to provide units with larger capacities than the current 60+ off 1.9 tph units that we have supplied to date.
QThe expansion of the LNG market is creating new opportunities, with increased demand for smaller
sized bunker vessels. Are you looking at products that address the diff erent requirements of smaller LNG carriers, for example?
AWe are focusing on where our reliquefaction technology – ecoSMRT® – offers the most significant benefit to customers, which at this stage, is the very busy 174,000m3 LNGC market and not attempting to fit a square peg into a round hole. Whilst the small-scale LNG bunkering sector is not something we are actively pursuing at the moment, it is still on our radar as and when suitable opportunities arise. Q We expect the effi ciency of cargo containment systems to become increasingly important as LNG
suppliers seek to reduce GHG emissions from their supply chains. How does your system’s Coeffi cient of Performance (CoP) compare with competing designs?
AWe prefer to allow our systems to speak for themselves rather than benchmark against competitors’ systems but, for comparative purposes, please see the table below which shows that ecoSMRT® delivers more for your money. The efficiency of cargo containment systems is already very high, and new systems coming into the market, but at some point, it will get to the point of diminishing returns, so any incremental advantage that can be gained from reliquefaction will become more significant.
8 x
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PFF 2021: REGULATORY ISSUES COME TO FORE ON DAY ONE
The fi rst day of The Motorship Propulsion and Future Fuels Conference 2021 brought together ship owners, ship operators and industry leaders to discuss the challenge of decarbonisation and strategies to meet existing and future IMO targets
The fi rst day’s proceedings focused on the upcoming introduction of the IMO EEXI rules and CII rules followed by a series of presentations about recent retrofi t projects, including examples of wind-assisted propulsion, engine conversions to operate on LPG as well as the continuing commercialisation of the Gate Rudder solution.
Dominik Schneiter of WinGD exclusively revealed that the company had achieved methane slip reductions to below 1g/kWh in a recent trial of its iCER solution for multiple turbochargers.
The centrepiece of the day was an extremely wide-ranging high-level ship owners’ discussion about the implications of the extension of the EU emissions trading scheme to cover shipping in a well-attended opening day at the Motorship Propulsion and Future Fuels Conference 2021 in Copenhagen, Denmark yesterday.
First day Chairman, Lars Robert Pedersen, Deputy Secretary General, BIMCO opened the conference and set the tone for the day’s discussions. While the COP26 conference was taking place in Glasgow, the birthplace of the steam engine, he closed the keynote with a stirring call to action. This is where we talk about action.
Christos Chryssakis of DNV noted that the very fact the conference was taking place hopefully represented a welcome return to normality. Turning to the political environment, he noted that nothing exemplified the increasing pressure on the industry better than the reception for the IMO’s decarbonisation targets. Lauded in 2018, they are now being criticised for not going far enough, Chryssakis noted. The regulatory landscape was becoming more complex, with the EU introducing regulations affecting shipping and other countries considering similar measures. Insurers and financial institutions were increasingly setting up schemes that would affect the industry. Forums such as the PFF conference offered a useful venue for participants to share experiences as the industry undergoes a period of change in the short term.
The high-level panel brought together Claus Graugaard, Head of On-board Vessel Solutions at the Maersk McKinney Moeller Center for Zero Carbon Shipping, MSC Group’s EVP for Maritime Policy and Government Affairs, Bud Darr, Wolfram Guntermann, Hapag-Lloyd’s regulatory affairs director, and Christopher Fee, Oldendorff Carriers’ GM, Environment and Sustainability.
During an opening presentation, Graugaard outlined the challenge facing the sector, noting that if global trade volumes increased by 1.3% on a CAGR basis until 2050, global shipping’s emissions will increase by 20% by 2050 to reach 1.5 gigatonnes of CO2 equivalents.
Graugaard noted that reducing the emissions from global fleet to bring it within the target 2 degree Celsius rise would require significant investments. Drawing on modelling work produced by the Center, Graugaard told the conference that a levy of up to $230/t would be required to incentivise significant changes, although modelling suggested that the cost of the scheme could be mitigated by rebates to early adopters.
The panel turned its attention to the potential role of market-based measures, such as the extension of the EU’s Emissions Trading System (ETS) to cover emissions from vessels calling at European ports.
8 Dominik
Schneiter of WinGD exclusively revealed that WinGD had reduced its methane slip below 1g/kWh - “a record low for any leanburning engine” - during a recent test of concept trial of its iCER solution for multi-turbocharger applications
When Martin Kroeger said that “the industry is very open to discuss market-based measure mechanisms,” he summarised the consensus of the panel.
Wolfram Guntermann and Christopher Fee spoke for many ship owners in the room when they emphasised their preference for international regulation to be introduced at the IMO level.
The potential extra-territorial application of the ETS to voyages between the EU and third countries was also identified as a particularly sensitive area.
The particular ownership and operational structure of international shipping posed a number of challenges for a scheme that had originally been designed for application to fixed assets in the energy generation and heavy industry sector.
Christopher Fee and Bud Darr separately noted that the structure of the scheme needed to clarify where the responsibility for the emissions generated lay.
From the perspective of the bulker sector, Fee said he was a little concerned that the polluter pays principle is not being respected by the proposals, as it places the responsibility for paying the emissions to the ship owner. He added that ship owners’ ability to influence operational behaviour was limited during time charters.
The second session presented a number of presentations about the implications of the upcoming introduction of EEXI and CII.
Christos Chryssakis offer an uncompromising message about the applicability of efficiency measures, noting that the 11% increase in fuel efficiency that they would require meant that speed reduction measures alone would be insufficient after 2026. Chryssakis offered the example of the tanker market, with a significant proportion of the fleet at risk of falling into the lower D and E categories after 2026.
Mike Konstantinidis of METIS identified the opportunities that the use of digital solutions might play in reducing emissions, likening improved operational performance to an unexploited opportunity for the industry, while Chris Waddington of the ICS stressed that engine power limitation was likely to remain the simplest solution for shipowners in the short term.
The penultimate session of the day introduced a range of retrofit solutions. Dr Elias Boletis of Wartsila Propulsion described the continuing progress of the Gate Rudder solution, and noted that the solution was being looked at by vessels up to the size of VLCCs.
Vincent Bernatets of Airseas announced that the Nantesbased company has expected to complete its first commercial order in December. Rob van Solingen of Wabtec outlined the commercial advantages that its retrofit of MS Amadea’s engines offered.
Jonas Nyberg of Berg Propulsion presented the results of its Twin Fin electric propulsion system for Polarcus, noting that the diesel electric propulsion solution balanced total ship resistance and propeller thrust performance to obtain maximum gain in terms of net thrust performance while minimising noise and vibration.
MS Award fi nallists
Klaus Dahmcke Rasmussen, Head of Projects and PVU Sales at MAN PrimeServ, outlined the scale of the work involved in the conversion of BW Gemini to operate on a two-stroke LPG dual-fuel engine.
The project, which had been carried out with fuel gas supply system partner Wartsila Gas Supply and Chinese yard Yiu Lian, had demonstrated the importance of dedicating experienced project management and skilled engineering teams to the project.
The final session of the day provided delegates with a choice between three competing projects for The Motorship Editor’s Award, along with the BW Gemini conversion project.
Jan Thore Forss of UECC introduced the company’s A-Class LNG battery hybrid PCTCs - the first of their type - and told the audience that gas trials of the first delivery were due to start imminently, with delivery due in December.
Graham Harvey, CEO of Windship Technology introduced the company’s Zero Emission Solution, which features a triplewing aerofoil with a wider Zero Emission shipping concept. DNV had just completed an independent computer-based analysis of the concept’s emissions abatement potential, assessing that Windship Technology’s solution captures 100% of the CO2 generated whilst providing 49% fuel savings of the expected fuel consumption of an Aframax Tanker.
WinGD methane slip breakthrough
Dominik Schneiter of WinGD presented the engine designer’s iCER exhaust recycling system, noting that the solution offered significant reductions in methane slip emissions. Schneiter exclusively revealed that WinGD had recently completed a test of concept trial of the extension of the iCER solution to multi-turbocharger applications upon a production engine in China.
The trial results demonstrated that the solution was compliant with IMO Tier II in diesel mode, offering a fuel consumption improvement of >8g/kWh, but the more significant results were achieved in gas mode, where the solution was able to run higher compression ratios, resulting in a GHG reduction of “over 8%” using this technology. Schneiter noted that this reduced the methane slip below 1g/kWh, “a record low for any lean-burning engine”.
Day two of the conference is in progress now and the discussions continue on ammonia, LNG, methanol, hydrogen and fuel cells, wind-assisted propulsion and electrification.
8 Christos
Chryssakis of DNV said forums, such as the Propulsion & Future Fuels conference, off ered a useful venue for participants to share experiences
PFF 2021: ALTERNATIVE FUELS DOMINATE DAY TWO AGENDA
As the PFF conference began its second day on Thursday 4 November in Copenhagen, the focus shifted slightly towards the short-term to medium-term outlook for the industry, and the range of alternative fuels that will fuel shipping later this decade
Having focused on the likely impact of changes in the regulatory environment for existing tonnage in the fi rst day’s session, accompanied by sessions focusing on potential retrofi t and conversion solutions, such as Rob van Solingen’s description of Wabtec’s upgrade solution for the Amadea’s gensets, the second day focused on technical and safety issues connected with the introduction of alternative fuel solutions for the market.
There were a number of significant announcements for the market, including Frank Harteveld’s revelation that Wärtsilä’s initial Otto cycle route ammonia combustion tests had achieved CO2 equivalent savings of up to 60%, Alfa Laval’s beginning of ammonia tests in 2022, and MAN ES’ announcement that it planned to introduce a 4-stroke hydrogen engine, subject to demand, as soon as 2023.
Setting the scene
The second day opened with a magisterial overview of the current and upcoming decarbonisation landscape from Charlotte Røjgaard, becomes Global Head of Bureau Veritas’ Marine Fuel Services. Before identifying the pros and cons of each of the potential alternative solutions, the industry had successfully weathered the IMO 2020 transition, and Røjgaard identified “ambition towards [meeting] these new targets, and… a can do attitude” within the industry. The economics and technical characteristics of different fuels would vary, while aftertreatment solutions would be a key focus, Røjgaard said, citing biofuel’s NOx emissions profile, US$2,000/t cost and lower energy content as challenges to the fuel’s wider adoption, before considering bunkering and upstream supply issues. Røjgaard also reminded the audience that as many new fuels have lower energy that cost comparisons should be made on an IFO380 equivalent ratio basis rather a simple per tonnes basis. “Pre COVID, LNG was a good choice. It was cheaper for energy content compared to the high sulphur fuel. But today, it’s almost three times more expensive.”
Røjgaard was succeeded by Hartmut Schneider of Woodward, who outlined the potential role that green Power-to-X fuels could play in the maritime transition. Looking beyond LNG, Schneider expects ammonia to be used slightly more than methanol for deep-sea shipping “because it might be cheaper in the production than methanol”. Schneider’s presentation about the different challenges facing engine designers developing solutions for alternative fuels, with a specific focus on the relative advantages of high and medium pressure fuel injector system for use with different alternative fuels was compelling. Schneider’s focus on the energy requirements for compressing alternative fuels, giving the example of gaseous or liquified hydrogen to the 600-700 bar required by a highpressure dual-fuel engine, was particularly topical.
Frank Harteveld of Wärtsilä noted that engine test results from Wärtsilä’s ammonia combustion research programme had revealed CO2 equivalent savings of up to 60% for the first vessel tests of its gaseous ammonia Otto cycle approach. The tests had also revealed that higher proportions of ammonia than expected could be introduced into the LNGammonia fuel at higher engine loads (above 50%). Wärtsilä had also begun running liquid Diesel cycle route tests earlier in the summer. Harteveld added that Wärtsilä’s multi-fuel engine development plans included the planned introduction of retrofit kit solutions for existing dual-fuel engines “after we have learned more about the engines of our current portfolio”.
ETS coming by 2024
The introductory session was followed by a Q&A session with Ngoc-Lan Lang, a policy officer within DG CLIMA at the European Commission, handling the extension of the EU’s ETS system to the maritime sector. The interview saw Lang respond to detailed questions about the scheme’s design and reveal that it would permit ship owners to contractually assign the responsibility for ETS submissions to ship operators. A review of the scheme, scheduled for 2027, would permit appraisal of developments at the IMO level, and would also follow the end of a tapered introductory discount.
The conference subsequently divided into two separate
8 The European
Commission’s Ngoc-Lan Lang fi elded questions from conference delegates during a Q&A session dedicated to the upcoming ETS extension
streams, forcing delegates to choose between high-level discussions of developments in the LNG and methanol markets.
LNG
Alexandre Tocatlian of GTT introduced the LNG session, and shared details about product refinements introduced by GTT, including new higher pressure containment tanks for Ponant’s LNG-fuelled expeditionary vessel, Le Commandant Charcot. GTT is also seeking to lower the cost of LNG retrofit projects to US$25 million, while exploring the possibility of an LNG retrofit/vessel lengthening solution targeting 12,00014,000 teu container vessels (jumboisation) to further improve project economics.
Frank Harteveld of Wärtsilä returned to discuss the LNG market and discussed the potential advantages (including an extension of operational life beyond 25 years) that LNG retrofits might offer for owners of mid-life vessels, as an alternative to speed limitation and early demolition. Recognising the challenging choices confronting owners, Harteveld noted that bio-methane was likely to improve the greenhouse gas footprint of LNG-fuelled engines as it enters the market in greater volumes towards the end of the decade. Wärtsilä expected to further lower methane emissions by improvements to cylinder geometries, he added during the Q&A.
Rene Sejer Laursen of ABS noted that over 230 LNG carriers equipped with steam turbine propulsion systems remain in operation. Turning to ammonia conversions, Laursen noted that altering LNG containment systems to handle ammonia would require significant membrane strengthening and hull reinforcement work.
Dieter Hilmes of TGE presented the company’s recent work on fuel gas supply systems, noting that a trilobe tank solution might increase the tank capacity for smaller vessels, while simplifying pump and equipment requirements.
Methanol
During the concurrent methanol session, Berit Hinnemann of A.P. Moller Maersk introduced the company’s recent 16,000 teu container vessels, which will be capable of operating on methanol. The vessels would each consumer up to 45,000 tons of green methanol per year, and would collectively reduce Maersk’s CO2 footprint by 1 million tons, or by around 3% of the company’s emissions from its fleet.
Greg Dolan of the Methanol Institute outlined how the transparency of methanol bunker prices and the production cost of blue methanol and potential bio-methanol and e-methanol successors had improved. Even at mature production cost levels, bio-methanol would remain over twice the price of conventional methanol, while e-methanol could fall to a 50% premium of EUR630/t.
Lars Skytte Jorgensen of Alfa Laval told the audience that the company was introducing two new solutions that were aimed at the methanol-fuelled market, including a power from waste energy ORC-based solution, as well as a new fuel cell-based solution that the company plans to begin testing late this year. Jorgensen also told the meeting that testing on ammonia, both as a fuel for fuel cells, but also as a combustion fuel would begin in 2022.
Olivier Cartier of Bureau Veritas concluded the methanol session by outlining the main classification and regulatory requirements for methanol. Cartier noted that one of the areas attracting attention was fire safety rules, given the need to adjust fire detection systems to handle the clean burning and light blue flame of methanol, as well as its ignition characteristics. Cartier also added that Bureau Veritas was currently developing a methanol-ready notation for newbuilds.
The first session after lunch saw delegates confronted with the choice between an ammonia session and a hydrogen focused session.
Ammonia
Peter Kirkeby of MAN Energy Solutions provided a detailed overview of the ammonia engine development project in the opening presentation of the ammonia session. He directly addressed a number of high-profile challenges to the development of the solution, including how to prevent N2O (laughing gas) formation, which MAN expected to address through an on-engine solution, through combustion tuning, and ensuring decomposition before releasing the exhaust valve. Kirkeby also noted that the initial versions of the engine were likely to use a pilot fuel ignition concept, at around 5%, although subsequent developments may seek to alter the fuel type. Kirkeby also introduced the solution for eliminating ammonia discharges via the venting system.
Rene Sejer Laursen of ABS noted that the development of ammonia-fuelled boilers and gensets were likely to be necessary on ammonia-fuelled vessels in the future, and identified a number of four-stroke manufacturers who were working to bring ammonia-fuelled engines to market by 2026, including HiMSEN (by 2024), MAN ES and Wartsila.
Christian Berg of Yara described the company’s efforts to establish a green bunkering business, including the conversion of a 500,000 tonne/year plant at Heroya to green ammonia production by 2026. He added that the announcement by the new Norwegian government that the Norwegian offshore fleet should switch to operation on carbon neutral fuels as soon as practically possible was driving interest in ammonia from ship owners active on the Norwegian shelf.
Hydrogen
Since hydrogen’s first inclusion on the agenda of PFF in 2019, there has been rapid progress in the development of the technology. Sami Kanerva of ABB explained that the production of larger sized MW units would require the development of hydrogen-proof enclosures with process air and ventilation channels as well as a common balance of plant system.
Alexander Feindt of MAN ES discussed the company’s plans to develop 4-stroke combustion engines capable of operating on hydrogen fuel. The first of the two concepts under development is a dual-fuel H2 engine, using port fuel injection, which will be able to operate on hydrogen at up to 25% combined with LNG or diesel, which could be introduced as soon as 2023. The second concept is a compression ignition engine that would be capable of operating on pure hydrogen, which could be introduced as soon as 2026.
Electrifi cation
The electrification panel featured discussions around the potential market opportunities for battery hybrid or electrification solutions in the market, as well as consideration of safety aspects. Sverre Eriksen of DNV noted that adequate ventilation of the ESS compartment had been identified as one learning from recent safety incidents, adding that experience had shown that the use of seawater rather than freshwater to fight battery room fires had led to unfavourable outcomes.
The session was completed by a fascinating presentation by Dominik Schneiter of WinGD, who explained how the engine designer intended to integrate energy storage systems into propulsion solutions around WinGD’s 2-stroke engines. The solutions offered particular benefits for container feeders, PCTCs and other vessels with regular port calls, as well as for reefers.
