Navigating Energy Management Decisions

By Hector Sewell
Friday, September 28, 2012

Energy management means helping the industry understand, and navigate, a way through, the challenges of designing novel concepts and the adoption of new technologies. The shipping industry faces two big challenges right now that will most effectively be met by energy management and an understanding of new technology and how to use it. The two big challenges are the rising costs of energy in increased bunker bills and compliance with environmental regulation.
To some extent these challenges are, as has often been said, two different sides of the same coin. If carbon pricing or market based mechanisms directed at shipping were to be adopted they would be directly linked: fossil fuel bunker consumption, such as burning HFO as used by nearly all shipowners today,  not only leaves shipowners exposed to the market price of bunkers but also to any future carbon ‘price’ for using those bunkers. Conversely, in such a situation, reductions in fossil fuel consumption relative to other players in the market could provide a ‘win-win’ effect – reduced bunker bills and reduced exposure to carbon taxation or market mechanisms.


Energy Management in Practice
As we know, the industry is looking at alternative sources of bunker fuel, efficiency saving technologies, auxiliary propulsion options and operational measures to cut fuel consumption and address regulatory requirements. This is why there is so much excitement about LNG – the combination of no sulphur and low to zero NOx emissions as well as speculation about relatively low pricing based on dramatic expansion in assessments of exploitable gas reserves has got a lot of people pondering ... ‘is gas the future fuel for shipping?’ 
Where does this leave shipping today? The answer is the need to be acutely aware of operational performance and how it can be improved. We call this energy management. Shipowners will benefit from bringing a high degree of focus on their efforts to understand and manage their energy use. Some shipowners are doing this already. But few have a total approach to energy management.  What’s some good advice for shipowners looking to get to grips with energy management?
A good first step is to consider adopting the ISO 50001 energy management standard. This is probably the first standard available to shipping that could actively improve owners’ bottom line. The overall principle of the standard is to help companies identify, at a strategic level, how to reduce energy costs – in new designs, in existing ships and in all operations. With this approach adopted, complying with requirements such as SEEMP becomes much easier. Overall, making decisions becomes more straightforward – although not necessarily easy.

Asking the Right Questions
A question such as, ‘Should I use LNG as a fuel in my ships?’ becomes easier to address using an energy management approach. Most of the questions that need to be answered are along the lines of, ‘What risks do we face?’ Understanding risk is fundamental to then being able to make decisions. And we can see this as new technology emerges.
The industry needs new designs, it needs new technologies and it needs optimal methods to understand and implement them. Today nearly all new ships are built based on classification rules. But how do we approve and accept novel concepts where there are no rules? To some extent this question takes us right back to where classification began – when there were no rules.
Rules for the construction of ships emerged from an understanding of risk acquired through operational experience: the test was the voyage; a ship left for India and when (or if) it returned the experience and its performance on the voyage was shared, the materials and structure were examined and anecdotal evidence was shared. Today we can and need to assess risks in different ways but based on similar principles by applying a simple but effective methodology of identifying risk and verifying how those risks could be addressed.
Today, understanding future fuels, future engines and future designs is everything – for both newbuild and retro-fit. Shipowners need help making decisions. Providing the right decision making support through the design process is critical. Many technologies, many fuels, many designs can be made safe – but at what price? At the end of the day it all comes down to the bottom line. By understanding and verifying technical risk issues the owners and operators of the world will be in a better position to make critical commercial decisions. The methodology described below throws some light on the issues by looking at the topical issue of the location of LNG-as-fuel tanks.

Methodology: Novel concepts and designs 
In order to guide the industry in making decisions about novel concepts and new designs Lloyd’s Register has created a specific risk methodology. The methodology consists of single, scalable risk assessment process based on four stages:

•    concept study,
•    scoping the assessment itself,
•    detailed synthesis of design solutions, and
•    final assessment.


The methodology is structured so that the scoping phase generates an agenda that sets which risk studies to perform: the extent of the resulting scope is dependent on the degree of novelty of the proposed design. The assessment (typically an initial set of HAZID-type studies) identifies significant issues prior to engaging in designing. The synthesis involves a guided choice in the type and depth of detailed assessments needed to justify the equivalent level of safety and reliability asked for in our rules. The final assessment includes operational risk studies (e.g. typically HAZOP-type) on the proposed final design, so that all hazards associated with the operation and maintenance of the gas-fuelled system are identified and dealt with.
This methodology guides designers, builders, owners and technology developers in creating concepts that would be classed as being safe and reliable while meeting industry operational and other requirements. Knowing just how far to go both pre and post contract is crucial to the process. But, get it right pre-contract, involve the right stakeholders and document the process properly and all investors receive a welcome boost of confidence.
An example of where this is being used is in the approval of LNG-as-fuel gas tank location based on risk studies that demonstrate that the gas-fuelled machinery system includes adequate risk mitigation - so that the level of safety and reliability is equivalent to that associated with conventional oil-fuelled propulsion and auxiliary machinery. Lloyd’s Register has been, and is involved in, a number of projects where gas tank location is a significant issue. Most LNG-as-fuel applications either delivered or completed to date have been in small ferries but LR has been involved in some significant projects breaking new ground, namely the Viking Grace – at 56,000 gt the largest LNG-as-fuel application by far and the motor tanker Argonon, the inland waterway tanker and first newbuilding LNG-as-fuel tanker project to be delivered.
All of this brings us back to managing our two big challenges: the rising costs of energy in increased bunker bills and compliance with environmental regulation. Both solutions can co-exist in the same hull. We call this energy management.
 

(As published in the 3Q edition of Maritime Professional - www.marinelink.com)

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