When Energy flows to Money
There is no argument: International maritime transport is the most energy efficient mode of mass transportation available today. The entire world fleet contributes less than 2.7% to global CO2 emissions according to a 2007 IMO report and those emissions are shrinking as “slow-steaming” is applied to every sector. The IMO MEPC work on energy efficiency and GHG emission control has developed technical and operational reduction measures that will no doubt improve the maritime sector’s carbon footprint even further. The “ECO” in the halls of today’s IMO is therefore all about emissions and the industry’s cooperative effort to address global warming.
EEDI + SEEMP + EEOI = ECO
The IMO Energy Efficiency Design Index (EEDI) establishes a minimum energy efficiency requirement for new construction dependent on ship type and size. The algorithms are coupled with a mechanism to guarantee energy efficiency in future years. The EEDI is a performance-based calculation leaving the choice of technologies in a specific ship design to the shipbuilder and the owner. Maintain the required energy-efficiency level and ship designers and builders are free to use the most efficient solutions to comply with the regulations. These new “ECO” designs are fast becoming available in every market sector, promising reductions in fuel consumption and in turn dominance over an existing fleet when considering the cost of fuel. The EEDI reduction level in the first phase is set to a 10% improvement. 30% reductions are envisioned for periods reaching into 2025 to 2030 when fuel cell, LNG and Hybrid technologies become accepted in maritime propulsion.
The “ECO” in the Far East building docks is all about reduced fuel consumption. Ignoring the reported “oversupply” of tonnage and poor charter markets, some owners are nevertheless rushing to take advantage of both rock bottom shipbuilding prices and the new fuel economics that the eco-ship designs offer.
To cover the existing fleet at sea, the IMO introduced a mandatory management tool for energy efficient ship operation labeled the SEEMP. A regulation developed to assist the shipping industry in achieving cost-effective efficiency improvements in their operations uses the Energy Efficiency Operational Indicator (EEOI) as a monitoring tool and benchmark. The ECO debate is forcing Owners with existing fleets to look at modifications and improvements necessary for them to compete with the new energy efficient designs. These include, among others, hull coating systems, propeller ducting, trim optimization software and detailed slow steaming procedures. Some have also taken the changes to the extreme, analyzing parasitic load of light bulbs and hotel HVAC, as they prepare their crews for the new operating parameters. And that preparation is important: Class surveyors will be monitoring your SEEMP and senior officers will need to embrace it in order to be successful. Their positive response alone can reap large rewards without a penny of investment.
The Path to the Promised ECO Land
The industry debate now quite correctly centers on how – and why – to go green. Will you modify your existing tonnage to comply or is new construction the best way to go. And, why are we doing this at all? Is it in the name of reduced emissions, fuel consumption, profit, or all three? The owners of existing tonnage exceeding ten years of age are concerned their fleets may be technically obsolete or may require major upgrades and investment to remain competitive. If not modified, they risk being dropped into the second tier of a rumored two-tier charter market. The “ECO” in the passageways of older tonnage could lead to ‘Ecocide.’
It is an interesting debate taking into account many technical issues. What is more interesting is the question of whether those issues now lead commercial decisions affecting charter rates, freight levels and market recoveries in trades that were historically governed by supply and demand trends or indexes. Where IMO decisions of the past decade painted all paths “green” and led to the MEPC emissions work, picture now the flow of clean energy towards the new “green” – Money. Arguably, the Eco-Ship owners/builders are winning the debate. If you have the appetite to build – ECO is the way to go. You will earn more on your daily rate.
Look at the 50,000 deadweight medium range product tanker market as an example. Approximately 160 ships are contracted through 2013 and into 2014 with several of the new construction shipyards in Korea claiming fifth generation designs and fuel oil savings reaching 30% over existing tonnage on the water. But recent projects and specifications suggest that there can be issues with the math.
Most of the daily fuel consumptions are based upon ISO conditions applied to specific fuel oil consumptions recorded at the main engine shop tests; a slight correction when on the water, but a correction nevertheless. The majority of specifications and consumption warranties are calculated using an energy factor of 10,200 Kcal for marine diesel oil despite the fact most vessels will burn 380 cst heavy fuel oil with a Kcal of 9,800 or less. Correct your consumption figures again. The shipyards have also developed a new illusion called “design draft” and “scantling draft” when determining how much cargo your ship actually lifts. Your “design draft” consumption being far less then what you consume at summer load line. Once sea trialed, ship deliveries historically considered a 15% sea margin in the fuel oil calculation. Many of the “ECO” designs now show zero margin when boasting of savings. The phrase “Let the buyer beware” is good advice when contracting for your new energy efficiency ship as many of the new designs of this ship size claim daily consumptions ranging from 21 metric to 24 metric tons under the specification parameters. At sea, and with real world corrections those claims may be closer to 25 to 29 metric tons when the Master sends the noon report.
That said; there have been some significant changes in hull form and construction in the tanker sector. Remodeled stern sections make space available for larger more efficient propellers creating cleaner flow into the wheels. Where those lines are not clean the installations of Becker Marine ducts to aid in achieving propeller efficiency have proven successful in some designs - others not. Modifications to the forward part of the hull have included a move away from the “Esso Bulb” of the 1960’s to smaller bulbs or in some cases none at all.
Confusing? It should be, as we are led to believe this recent rush to fuel efficiency is something new in the marine industry. It is not. The 1965 sales brochure introducing the “Esso Bulb” claimed “Power and fuel consumption can be decreased by about 10 to 15 percent without sacrificing either speed or deadweight capacity”. Most claim this current “ECO” drive for efficiency is governed by fuel prices. Crude oil prices in 1964 were $1.80/barrel when the “Esso Bulb” was introduced. Clearly, this industry has always moved towards efficient operation.
What has recently changed is speed. “Slow steaming” has been the largest contributor to both reduced emissions and reduced fuel consumption. The latest “ECO” designs are now de-rating engines to nearly 70% of Maximum continuous rating (MCR) when historical levels were set at 90%. Operating speeds have been reduced to 11 to 12 knots in many sectors where 16 knots and above was the norm. Some question what will occur when the markets improve and the charterers look again for speed; the existing tonnage on the water having the power and advantage to meet that request. Others hope only wish for the market improvement when they consider the amount of new construction that continues to be delivered.
Spending Money to Make Money?
Emissions and environmental considerations aside, look to the investment that is required to bring your existing tonnage up to the new design standards and achieve a reduction in fuel consumption. Keep always in mind that “slow steaming” alone produces nearly a 40% reduction when dropping from 14 to 11 knots and greater savings when historical speeds are above 18 knots.
Prudent use of electrical power at sea and in port and the addition of energy efficient lighting can result in savings up to 0.7mt/day. Adjusting speed to plan efficient ship arrivals and circumvent waiting at the anchorages can save 1% to 5%; weather routing another 2% to 3%.
In most cases, hull improvements are difficult. However advances in propeller design and a match to your newly de-rated main engine can produce savings up to 8% at a cost of about $350,000 including modeling and design work. Add a Becker Marine Mewis Duct to accelerate and optimize your wake field for another $280,000 and you may see a further 3% reduction depending on your aft hull lines. Once this equipment is installed in drydock, coat your ship with International Paint 8000 LPP Lubyon Polymers and a further 6% is achievable. In some instances, improvements are “guaranteed.”
There have been several research projects listing these modifications and the results they promise. New technology and software analyzing propulsion efficiency, trim optimization and electrical load coupled with the modifications above are estimated at a cost of USD $2 million. The investment payback advertised to be recovered in 3.5 to 4 years pending trade route and ship operating history. Overall efficiency (not including slow steaming) is rated at 10% to 13% reduction when compared current fuel consumption figures.
Is it all spin? Only time will tell as the first and second generation eco-designs are only now being delivered into operation. Will the sales pitch continue? Without a doubt. A recent article in a major shipping company’s newsletter praised the Master and Chief Engineer for arriving into port using wind and current and “without” the main engine. The fuel savings were reported at 7 metric tons. In days gone by, this was described as “Losing the Plant” and “off hire.” In the days of wooden ships it was called “sails.” Now it’s Eco-efficiency.
(As published in the 2Q edition of Maritime Professional - www.maritimeprofessional.com)