With new regulation constantly updating as the shipping industry transitions to a low carbon future, Tuomas Riski, CEO of Norsepower, highlights how innovative wind propulsion solutions make a significant contribution to decarbonising the international shipping industry.
There is no doubt that ship owners and operators - as well as cargo owners and shippers - are all recognising the need to adapt and make shipping more environmentally-friendly as the pressure to adhere to existing and forthcoming environmental regulations intensifies. Shipping is heavily relying upon new, innovative ideas and concepts in order to achieve its decarbonisation goals.
Wind as an additional power source to enable a reduction in fuel consumption and emissions is a natural next step for the maritime transport industry as it seeks to remain cost-efficient and meet environmental regulations. It is one of the most freely available energy sources, and 100% carbon neutral, making wind-assisted propulsion extremely viable.
Making compliance work commercially
Under the EEXI regulation, at the first annual survey after entry into force in 2023, ships are required to demonstrate compliance with EEXI standards. When looking at meeting compliance and exploring technologies like Norsepower’s Rotor Sails it is important to remember one factor - every ton of fuel makes over three tons of CO2. The installation of a Rotor Sail achieving mean fuel, fuel cost, and emissions savings of for example 10% would always also improve a vessel’s EEXI rating by around 5-15%, depending on the actual case of each vessel. This EEXI improvement is a direct consequence of massive decreases in fuel consumption and costs – making investments in wind propulsion technologies sound even when looked at on a simple financial basis.
Not only does a retrofit or newbuild installation of the Rotor Sail support compliance with the new EEXI and CII rules, it also significantly decreases fuel consumption and costs. Investment in such clean technology that reduces fuel consumption also offers an opportunity to future proof vessels against inevitable fuel price increases as new fuels like ammonia and hydrogen enter the market, as well as against forthcoming CO2 emission taxes and/or emissions trading. For example, a 10% fuel saving from a Rotor Sail can mean the difference between operating profitably or not, as new fuels enter the market and a cost for carbon emissions is implemented.
The successful installations we have completed to date have built confidence in the value in utilising Rotor Sails - not only cutting emissions but also reducing fuel costs. For example, one recent project was the installation of two 35m tall and 5m wide Rotor Sails on a Ro-Ro vessel, SC Connector, with leading logistics provider in the North Sea market, Sea-Cargo. This is the first time the Rotor Sails have been designed to tilt to almost horizontal – a necessity for the SC Connector due to the height restriction on its key routes. We make incremental design changes to our design and ensure the right size Rotor Sail is fitted to the vessel, in the right location, and the right number are fitted. The savings achieved are currently estimated to be up to 25% emissions and fuel savings.
Additionally, the most recent installation on a 325,000 dwt VLOC was installed with five 24m high and 4m diameter Rotor Sails which can be tilted by using hydraulic cylinders. Norsepower has analysed the routes for the vessel chartered by Vale and estimates that its technology would be able to achieve an efficiency gain of up to 8% and a consequent reduction of up to 3,400 tons of CO2 per year. The payback depends on the properties of the ship, the vessel’s route and the wind conditions, so it varies in each case. Due to increasing energy prices, inclusion of CO2 emissions pricing, Rotor Sails are becoming more and more attractive from a commercial standpoint.
Future-proofing ship finance
In addition to cost savings, sustainable investing is also becoming a key driver in financing fleets that are fit for the future. The Global Maritime Forum’s Poseidon Principles and the Sea Cargo Charter, as well as the newly formed The Mission Possible Partnership (MPP), represent a much wider recognition of environmental, social and governance (ESG) measures at the core of future business from investors and a growing number of customers. Even though almost a third of shipowners say that ESG criteria barely influences their investment decisions, according to a report by Watson Farley Williams, nearly 90% of financiers regard ESG as having some or even crucial importance. Consequently, investments are increasingly being based on vessels’ efficiency and emissions performance as well as age. According to the Poseidon Principles Association, emissions are just as much about operations as they are ship design. They advocate that existing fleets are better retrofitted than building new ships with old technology and that operational data can be used to justify lending to an older ship.
Norsepower’s Rotor Sail installations have clearly demonstrated that wind propulsion can make a significant difference to the propulsion dynamics of large commercial vessels. If you combine our solution with other measures, vessels can be extremely cost-effective and environmentally friendly, meeting regulation but also providing financial benefits to the ship owner, operator and cargo owner with significant fuel reduction costs. This also means when vessels are transitioning to future fuels, which potentially needs more space to provide the same amount of energy, most likely at a far greater cost per tonne equivalent, the Rotor Sails continue to ensure maximum efficiency.
Wind-propulsion innovation, particularly through the use of Rotor Sails, is a solution available for the market now deliverable tangible and significant results. The wind-propulsion market is only expected to grow as the shipping community recognises its value as a readily-available resource to exceed regulatory compliance standards and benefit shipping on a commercial level too. It is essential to act now, so ships can be prepared and savings can be made quickly.
Originally published in ShipBuilding Industry magazine issue 3 (June) 2021.
For more information on this topic, watch Norsepower’s latest webinar on Going beyond Compliance.