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Shipping clean tech: credibility is reshaping the way technologies are brought to market

Posted 07.02.2017
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by Noah Silberschmidt, CEO, Silverstream first published in Sea Technology Magazine, October 2016

Across the world, ship owners and charterers are steadily becoming more forward-thinking about both their vessels and the future. Known for being a traditionally conservative industry, shipping is becoming more accepting of the proposition that clean tech can offer owners significant improvements in operational and environmental efficiencies. Reducing fuel burn and the associated costs also provides quantifiable reductions in emissions, contributing to the competitiveness of a ship owner’s fleet, as well as driving improvements in sustainability within the wider industry.

While in recent years ship owners have been enjoying the benefits brought about by low oil prices and significantly lower fuel costs, bunker fuel still represents the greatest cost to a vessel. Any opportunity to drive improvements in operational efficiency and further reduce fuel consumption needs to be taken.

This is particularly important in light of the recent decision from IMO on when it will implement the MARPOL Annex VI global 0.5% sulphur cap on fuel oil. Announced at the IMO Marine Environmental Protection Committee meeting (MEPC 70) in October 2016, a deadline of 2020 has been set for new regulation to come into force. The reality is that the majority of ship owners will be using distillates or distillate-based products to ensure compliance, given the lack of appetite for investment in scrubbers, as well as the lack of global LNG infrastructure. Right now, this seems a satisfactory solution, as distillates carry less than the same price as HFO two years ago.

However, the majority of analysts believe that crude prices will rise to between $60 and $80 per barrel by 2020, which will naturally influence the cost of distillates. While prices will not rise to the $1,000 per tonne of 2014 - where many ship owners were concerned about business continuity on the implementation of the 0.1% ECA in 2015 – fuel costs will increase significantly from what they are today.

This is why clean tech will play a significant role in increasing operational efficiencies to reduce fuel costs, and maximise levels of profitability.

On top of this, the IMO is under increasing pressure to show how shipping will contribute to achieving the global below 2-degrees warming targets agreed at the UNFCCC’s COP21 meeting in Paris at the end of 2015.  While shipping is not included within the agreement, with an annual GHG emissions output of one billion tonnes, which is set to increase by up to 250% by 2050 on a business as usual basis, there many commentators both inside and outside of the industry believe that shipping should take responsibility to reduce its impact on global warming and climate change.

On top of the impending, and inevitable regulatory pressure, there is also growing demand from charterers to see increases in sustainability within the shipping supply chain. Ship owners that can demonstrate the highest levels of efficiency and a real commitment to driving improvements in sustainability will therefore be more competitive in the eyes of their customers.

This has acted as a catalyst for new clean tech entering the market. However, making these clean technologies marketable to ship owners has remained a significant challenge. This is largely as a result of many manufacturers making claims on the efficiency benefits that their technologies can deliver that are not supported by hard data, reliable test results or transparent evidence.

In such a competitive marketplace, the onus is on the manufacturer to demonstrate a proven ability to deliver tangible and consistent results, backed up by genuinely credible data obtained through a rigorous and transparent sea trials process. It is only by achieving this that they can instil trust in the technology and increase uptake.

Silverstream Technologies has been proactive in driving the creation of the blueprint to bring about this step change to successfully trial and bring to market clean technologies.  The commercial success of the Silverstream® System air lubrication technology has set a new industry benchmark for proving the benefits of undergoing a rigorous and transparent testing and validation process following the success of its landmark sea trials.

Conducted during 2014, these trials have been well documented and scrutinised within the industry and positioned as a hallmark for future technology development.

Funded by Shell and carried out on leading ship owner Dannebrog Rederi’s (part of the WECO Group A/S), 40,000 DWT vessel MT Amalienborg, the trials (which were conducted in both ballast and laden conditions) proved that the Silverstream® System can confidently deliver net efficiency gains in excess of 4%.

Silverstream has continued to collect in-service operational data from the vessel, allowing for the analysis of two and a half years of independently verified data that is then used to inform developments and improvements to the Silverstream® System. Further analysis of the data gathered through this extensive trials process predicts that for larger vessels, the efficiency savings would be as much as 8%. It also demonstrated savings commencing at 10 knots, which proves that increased speed brings increased savings. Silverstream Technologies has continued to develop and enhance the system by making engineering improvements, which have resulted in negligible drag when the system is switched off, as well as improvements in compressor efficiency and installation footprint. These improvements will further increase the savings and net efficiency of the technology.

On top of the positive results, it is the credibility and integrity in the delivery of the results that has facilitated the translation to commercial success. As a direct result of the success of the trials, commercial take up of the Silverstream® System has been significant.  In March 2015, the company announced the first installation of the Silverstream® System on the Norwegian Cruise Line vessel Norwegian Bliss, which will be delivered in Spring 2017 from one of Europe’s leading yards, Meyer Werft in Germany. Silverstream now has a strong pipeline of further vessels from different vessel classes, both retrofit and newbuild.

Appetite has also been especially considerable from the cruise sector. For these vessels, both regulatory change (MARPOL Annex VI regulations) and corporate social responsibility are driving an increase in cruise operators’ desire to implement clean technologies.

Many cruise lines have already seen a rise in fuel costs due to the significant amount of time that they operate within 0.1% ECA zones. And given the consumer-facing nature of the sector, cruise operators feel that it is their responsibility to offer assurances to their customers that they are proactively looking to minimise the environmental impact of their operations without negatively impacting services. They are doing this by getting ahead of regulations and implementing proven clean technologies that increase efficiencies and reduce fuel consumption and associated emissions.  And their enthusiasm for the Silverstream™ System is a direct result of the transparent – and proven - results from the sea trials process.

Part of this benefit comes from the specifications of the technology, which are perfectly suited for cruise vessels. For example, comparative air lubrication systems for cruise vessels use a greater number of larger compressors and air pipes, requiring significantly more space within a vessel’s hull. This increases the complexity of engineering, and greatly extends the time required to install and operate these systems. With space on a cruise vessel at a commercial premium, it is essential that impact on the vessel is minimal.

The simplicity of retrofitting the Silverstream™ System – which can be done in just 14 days - means less downtime for vessels, and also reduces the cost of the technology by as much as 30%, compared to other technologies. Most significantly, the Silverstream™ System uses 66% less energy than other air lubrication systems to power the compressors, resulting in a more energy efficient system, which returns greater fuel savings.

The Silverstream™ System is also the only air lubrication technology that is applicable for both new-build and existing vessels. To begin the process of an installation, the vessel is evaluated to ensure that the system will deliver optimum efficiency gains when it is installed.

To ensure optimum operational efficiency, Silverstream’s team of expert engineers and naval architects will assess vessel drawings and data from sea trials to conduct a performance analysis in terms of speed, range, and hydrodynamics. This information then allows Silverstream to determine where to position the cavities on the vessel for best effect, as well as determine the power required, to maximise the efficiency savings delivered by the system.

Crucially, from a practical perspective, the system is very simple to operate. It can be easily switched on or off, and the maintenance requirement is identical to any other standard, non-essential equipment. To power the technology, an automation system regulates compressors to deliver the required lubricating air. The compressors maintain constant bubbles of air at the right pressure in the cavities in the hull, which, as the vessel steams, is released behind each cavity, creating a thin but rigid layer of micro-bubbles. This carpet of air bubbles covers the whole flat bottom of the hull, reducing the frictional resistance between the water and the hull surface, dramatically reducing fuel consumption and associated emissions.

The process of driving new innovations from concept through to commercialisation requires meticulous attention to detail and a commitment to rigour and transparency.  In a shipping industry that is cautious in its approach to adopting change, uptake has not been exponential, despite the commercial and environmental opportunities that can be realised through the application of credible clean tech.

To ensure success, clean tech manufacturers must demonstrate investment in a significant period of R&D that includes both a process of tank testing and sea trials to successfully generate interest from the key decision makers in the industry.

Doing this sends a clear message to technology manufacturers everywhere: there is simply no room for cutting corners in the process of bringing technology to market.

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