how technology choices effect profitable business in ... … · manpower on demand, remote...

How technology choices effect profitable business in merchant shipping?

Teus van Beek, General Manager Market Innovation

19 October 2015 1 © Wärtsilä

Why should Financiers be involved in equipment selection?


Business Solution

Service

Technical Solution

Product

- ECAs through global manufacturing footprint - Optimized finance structures

To Reduce Financing Costs

- Through Performance / Uptime guarantees - Limiting Financial exposure due to failures

To Guarantee Revenue / Availability

- EPC package reduces Integration Risk - Avoid construction delays

To Reduced Construction Risk

- OEM Operation and maintenance of the equipment - Ensure asset liquitidy

To Maintain Asset Value

Agenda

How to meet legislation

How can a New Ship Concept be more profitable : concept study

Business environment for merchant shipping

Conclusion


Challenges

• Earnings low

• Overcapacity

• Unbalance between supply & demand

• Older ships need to be

upgraded - driven by legislation

• New ship based on Eco

concepts


How to improve your business in harsh market conditions?

Environmental challenges for operators!

November 7th, 2013 5

Acid rains Tier II (2011) Tier III (2016) NOx

Greenhouse effect EEDI adopted by IMO

CO2

Acid rains Sulphur content regulated SOx

Direct impact on humans Regionally regulated

Particulate matter

Operating in Emission Control Areas

ECAs areas copied from LR 2030 perspective


Best option to reduce emissions?

HFO

Scrubber

MDO DF-LNG

SCR SCR

After treatment(SCR) to reduce NOx

November 7th, 2013 8

Scrubbers to reduce SOx

November 7th, 2013 RETROFIT & GRIP Midterm Conference 9

Integration in to the ship

10

Turn-key delivery to include: • Equipment • Installation, piping, cabling • Interfaces to existing systems • Commissioning • Performance guarantee • Class approval • Certification • Documentation • Customer training

LNGPac

11 © Wärtsilä

The LNG fuel supply system

CO2

NOx

SOx

Particulates

Dual-Fuel engine in gas mode

Diesel engine

0

10

20

30

40

50

60

70

80

90

100

Emission values [%]

12 © Wärtsilä

-85%

-100%

-100%

• 25% lower CO2 Thanks to low carbon to hydrogen ratio of fuel • 85% lower NOX Lean burn concept (high air-fuel ratio) • No SOX emissions Sulphur is removed from fuel when liquefied

• Very low particulate emissions

• No visible smoke

• No sludge deposits

Natural Gas As Marine Fuel

Dual-Fuel advantages

Main advantages of the Dual-Fuel 4-stroke engine:

• Redundancy, backup without interruptions in power or speed.

• Able to operate on liquid fuel outside ECA-area (incl HFO) • Simple system, no PTI/”take me home” or double gas

system needed. • Vessel re-routing possible, gas supply not a limitation

We see growth in Gas fuelled vessel on shorter routes

13 © Wärtsilä

CHANGE TO MGO Run full time on Marine Gas

Oil (MGO).

Convenient No change over

High oper. cost

CONVERT TO LNG Convert engines to run on

gas (LNG).

Also reduces NOx and particulates Investment cost LNG availability

USE SCRUBBERS Install an exhaust gas

cleaning system (scrubber).

Works with high sulphur HFO Use everywhere Easy operation ROI depends on fuel oil price difference between low sulphur fuel oil and high sulphur HFO

14

FUEL SWITCH Switch to low sulphur fuel in

SECA

Flexible Small investment

High oper. cost Fuel change over Fuel availability

What is the best option to fulfil the limitation?

∆ Capex increase and ∆ Opex vs. Reference

∆ To reference case (W 46F Tier II)

0255075

100125150175200225250275300325350

SCR; MGO SCR; HSFO + scrubber DF engine

Delta Capex from Tier2 (€/kW)

-5

5

15

25

35

45

55

65

75

85

SCR; MGO SCR; HSFO + scrubber DF engine

Delta Opex vs. Reference Case (€/MWh)

Delta Opex (20% ECA) Delta Opex (50% ECA)Delta Opex (80% ECA) Delta Opex (100% ECA)

How new ship concepts improve your business

• Which factors are effecting the day rate mostly?

• Can we instead find a ship speed which give a better day rate?

• How can we beat these factors?

• What is needed to obtain this?

19 October 2015 WÄRTSILÄ CORPORATION 16 © Wärtsilä

Reducing Total Shipping Cost

Slow Steaming: Wärtsilä Technologies to Reduce Cost

Propulsion Cost Renewable Energies,(Wind) to reduce Energy consumption, Ultra Large Propulsors, Hull Design

Auxiliaries Cost WHR, Operation Profile

Cost Factor Selected Technologies

Crew Cost Automation, Remote Monitoring & Control, Manpower on Demand, Remote Maintenance, Remote Expert Support

Vessel CAPEX Design to Cost, Simplification

Why? Main cost drivers in shipping

10/19/2015 18

TOTAL Fuel cost Vessel CAPEX Cargo CAPEX Crew cost

Ship speed

Is this the future?

19

Features & Concepts for maximum efficiency

Ultra large fin propulsor

Low number of crew

Light weight hull structure

Decentral power generation

Energy storage to reduce load fluctuations

Ship speed optimised for auxiliary wind energy to reduce propulsive power

Zero emission fuel

Low hull resistance

Remote operation engine room

Is this the future?

20

Capex machinery versus Opex

OPEX CAPEX mach

• Ultra large fin propulsor 18% 8% • Low hull resistance 5% 5% • Light weight hull structure 2% - • Ship speed optimised for OPEX 5% • Auxiliary wind energy to reduce propulsive power 18% 50% • Decentral power generation - • Energy storage to reduce load fluctuations 3% • Zero emission fuel - • Low number of crew on board 1% -3% • Remote operation engine room -

TOTAL REDUCTION IN ENERGY CONSUMPTION: 42%


Financial benefit


Value: 1,2 m$ lower fuel cost per year at 2,8 m$ extra investment (5,4% of the vessel) Payback in 3 years at current level of fuel price

What is our key message today?

• We challenge the norm! – Why? …Todays market needs a change and we constantly work on this!

• There is more to cost savings than just reducing crew! – Automated ships are not the only answer!

• The future is still uncertain! – How to make it good? We believe that together we can create it!

In Short…

Technology choices really do matter for the future of sustainable & profitable shipping.


Thank you for your attention

Teus van Beek General Manager Market Innovations Wartsila Mobile: +31 653797704 E-mail: [email protected]


Slide Number 1Why should Financiers be involved in equipment selection?AgendaChallengesEnvironmental challenges for operators!Operating in Emission Control AreasBest option to reduce emissions?After treatment(SCR) to reduce NOx Scrubbers to reduce SOxIntegration in to the shipLNGPacNatural Gas As Marine FuelDual-Fuel advantagesSlide Number 14 Capex increase and Opex vs. ReferenceHow new ship concepts improve your businessReducing Total Shipping CostWhy? Main cost drivers in shippingIs this the future? Is this the future? Capex machinery versus OpexFinancial benefit What is our key message today?Thank you for your attention

how technology choices effect profitable business in ... … · manpower on demand, remote...

Documents