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TRANSCRIPT
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Exhaust Gas Cleaning SystemsDetermining Economics of Scrubber Systems
Presented to:Lloyd’s Maritime Academy, Practical Guide to Scrubber Systems, North America20 November 2013, Miami
Presented by: Kevin J. Reynolds, PE, The Glosten Associates
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Exhaust Gas Cleaning SystemsBusiness Case Drivers
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
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Exhaust Gas Cleaning SystemsBusiness Case Drivers
Key Drivers:• ECA fuel consumption (More than 4,000 tons/year?)• Cost differential between residual and distillate fuel oil
IFO380 $632/MT, MGO $1026/MT, Avg. of 13 ports (19/11/2013 Bunkerworld.com)4,000 MT * (1026-632) = $1.58 million/year savings
(Houston (977.5 – 586) * 4,000 = $1.57 mm)
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
Page 3, Glosten Associates © 2013
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Exhaust Gas Cleaning SystemsBusiness Case Drivers
Key Drivers:• ECA fuel consumption (More than 4,000 tons/year?)• Cost differential between residual and distillate fuel oil
IFO380 $632/MT, MGO $1026/MT, Avg. of 13 ports (19/11/2013 Bunkerworld.com)4,000 MT * (1026-632) = $1.58 million/year savings
• Fuel cost escalation is CRITICAL (Year 10 at 8% yields $2.86 million/year)• Capital and Operating Expenses are important, but may NOT be primary
drivers!
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
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Key Drivers:• ECA fuel consumption (More than 4,000 tons/year?)• Cost differential between residual and distillate fuel oil
IFO380 $610.50/MT, MGO $940.00/MT, Rotterdam, 20/01/2013 Bunkerworld.com4,000 MT * (940-610.5) = $1.3 million/year savings
• Fuel cost escalation is CRITICAL (At 8%, year ten $2.9 million/year savings)• Capital and Operating Expenses are important, but NOT primary drivers!
Exhaust Gas Cleaning SystemsBusiness Case Drivers
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
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Key Drivers:• ECA fuel consumption (More than 4,000 tons/year?)• Cost differential between residual and distillate fuel oil
IFO380 $610.50/MT, MGO $940.00/MT, Rotterdam, 20/01/2013 Bunkerworld.com4,000 MT * (940-610.5) = $1.3 million/year savings
• Fuel cost escalation is CRITICAL (At 8%, year ten $2.9 million/year savings)• Capital and Operating Expenses are important, but NOT primary drivers!
Exhaust Gas Cleaning SystemsBusiness Case Drivers
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
Page 6, Glosten Associates © 2013
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Key Drivers:• ECA fuel consumption (More than 4,000 tons/year?)• Cost differential between residual and distillate fuel oil
IFO380 $610.50/MT, MGO $940.00/MT, Rotterdam, 20/01/2013 Bunkerworld.com4,000 MT * (940-610.5) = $1.3 million/year savings
• Fuel cost escalation is CRITICAL (At 8%, year ten $2.9 million/year savings)• Capital and Operating Expenses are important, but NOT primary drivers!
Exhaust Gas Cleaning SystemsBusiness Case Drivers
Fuel Cost Savings =+ (ECA Fuel Consumption * Distillate Premium)- (EGCS Capital and Operating Expenses)
Marine vessels burning at least 4,000 MT within an ECA may appreciate fuel cost savings that overwhelm integration and operational challenges. In fact, adoption of a scrubbing technology could become a competitive necessity.
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Exhaust Gas Cleaning SystemsSuggested Material: SOCP Selection Guide
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Exhaust Gas Cleaning SystemsSuggested Material: SOCP Selection Guide
http://www.socp.us/article.html?aid=107
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Life Cycle Cost AnalysisReview:• Analysis Method: Which
metrics matter?• Fuel cost predictions??• Variables: What can I
control? What can’t I control? Assumptions?
• Example vessels• Sensitivity analysis• Conclusions
Page 10, Glosten Associates © 2013
Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,800 18,300 21,000 83,900Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,500 5,000 4,500 8,700Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 9,800 24,200 27,200 94,800Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 500 900 1,700 2,200OM&R expenses, annual (1,000 USD/yr) 83 145 274 358Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 11‐Jan‐13 Residual (19 Nov 2013) 632Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
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Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual (19 Nov 2013) 632Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisReview:• Analysis Method: Which
indicators matter?• Fuel cost predictions??• Variables: What can I
control? What can’t I control? Assumptions?
• Example vessels• Sensitivity analysis• Conclusions
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Life Cycle Cost AnalysisAnalysis Method
Why NIST 135:• Highly vetted methodology• Developed for evaluating high value options for
energy and water conservation.Review:• Economic model accounting for owning,
operating, maintaining, and disposing.• When comparing options within project, LCCA
identifies the most cost-effective solution.• When considering different projects, LCCA
supports which project should be taken on first.• More complex than “Simple Payback,”
considering discounted cash flow, constant vs. current dollars, and price escalation rates.
Benefits:• Incorporates long-run cost consequences• Clarifies which opportunities are profitable
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Life Cycle Cost AnalysisAnalysis Method
Analysis Metrics:Do operational savings justify the investment?
Distillate? Natural Gas? Scrubber?• Net Savings: What is “today’s value” of the
one-time and recurring costs, when compared to a base case?
• Savings to Investment Ratio: Which approach is most cost effective, assuming limited funds?
• Adjusted Internal Rate of Return: Will project meet my minimum acceptable rate of return?
• Discounted Payback: How long will it take to return my investment in today’s dollars?
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Life Cycle Cost AnalysisAnalysis Method
Only metric suitable for comparing or ranking mutually non-exclusive options over life of project.
Use other metrics as supplementary measures.
Analysis Metrics:Do operational savings justify the investment?
Distillate? Natural Gas? Scrubber?• Net Savings: What is “today’s value” of the
one-time and recurring costs, when compared to a base case?
• Savings to Investment Ratio: Which approach is most cost effective, assuming limited funds?
• Adjusted Internal Rate of Return: Will project meet my minimum acceptable rate of return?
• Discounted Payback: How long will it take to return my investment in today’s dollars?
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Life Cycle Cost AnalysisAnalysis Method
Net Savings = Present Value Alternative –Present Value of Baseline
• Present Value and Discount Rate (What is tomorrow’s money worth to you today?)
• One-time Capital Expenditure• Annual Maintenance and Repair at “Real”
Inflation Rates• Annual Energy Costs at Predicted Escalation
Rates
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Life Cycle Cost AnalysisAnalysis Method
Net Savings = Present Value Alternative –Present Value of Baseline
• Present Value and Discount Rate (What is tomorrow’s money worth to you today?)
• One-time Capital Expenditure• Annual Maintenance and Repair at “Real”
Inflation Rates• Annual Energy Costs at Predicted Escalation
Rates
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Investment TermsBase (Analysis) Date 1‐Nov‐13Construction Date 4‐Jul‐14Service Date 1‐Jan‐15
Service Period (years) 10Rate of Inflation 3.0%Discount Rate 10.0%Energy & Chemical Escalation ???
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Life Cycle Cost AnalysisAnalysis Method
Net Savings = Present Value Alternative –Present Value of Baseline
• Present Value and Discount Rate (What is tomorrow’s money worth to you today?)
• One-time Capital Expenditure• Annual Maintenance and Repair at “Real”
Inflation Rates• Annual Energy Costs at Predicted Escalation
Rates
Page 17, Glosten Associates © 2013
Investment TermsBase (Analysis) Date 1‐Nov‐13Construction Date 4‐Jul‐14Service Date 1‐Jan‐15
Service Period (years) 10Rate of Inflation 3.0%Discount Rate 10.0%Energy & Chemical Escalation ???
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Life Cycle Cost AnalysisFuel Futures
Key Factor: Cost Difference Between Residual and Distillate Fuel Oil
Different Factors – Different Impacts• World economy continues to grow,
increasing distillate demand• Shift towards shale gas and ‘clean’
coal, reduces distillate demand• New refining capacity, particularly in
Middle East, increases distillate supply
• Marine vessels switching to distillate, complying with ECA, greatly increases distillate demand
• Marine vessels, installing scrubbers, eases distillate demand increases
Apply Past Trends to Today’s Prices(One of Many Approaches)• Select escalation rate, based on past ten
years of residual prices.• Select residual price, based on average
of last three months.• Select differential percentage, based on
past ten years of residual to distillate prices.
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Investment TermsResidual (19 Nov 2013) (USD/m.ton) ???Differential (Disti l l . vs. Residual) ???Energy & Chemical Escalation ???
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ExamplesIFO 380 (USD/MT)
MGO (USD/MT)
Differential(%)
December 2008 222 529 138%February 2012 744 1,025 38%
Base Case 632Calc from Differential 55%
Life Cycle Cost AnalysisFuel Futures
Key Factor: Cost Difference Between Residual and Distillate Fuel Oil
Apply Past Trends to Today’s Prices(One of Many Approaches)• Select escalation rate, based on past ten
years of residual prices.• Select residual price, based on average
of last three months.• Select differential percentage, based on
past ten years of residual to distillate prices.
• Round off as reasonable, avoiding implied accuracy.
• Tends to under-estimate potential future increases in distillate (makes calculations conservative)
• Use your own company’s fuel futures if available
Page 19, Glosten Associates © 2013
Investment TermsResidual (19 Nov 2013) (USD/m.ton) 631Differential (Distil l . vs. Residual) 55%Energy & Chemical Escalation 8.0%
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Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual (19 Nov 2013) 632Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisReview:• Analysis Method: Which
indicators matter?• Fuel cost predictions??• Variables: What can I
control? What can’t I control? Assumptions?
• Example vessels• Sensitivity analysis• Conclusions
Page 20, Glosten Associates © 2013
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Life Cycle Cost Analysis
Variables and Example Vessels
Key Variables• Review Routes and
Logistics• Focus on Port vs. At Sea
Times, Different Consumption Factors
Containership Transpacific
Containership US West Coast
Tankship US West Coast
Cruise Ship North
AmericaShip Speed (knots) 23 20 14.5 19.75Port Name Shanghai Tacoma Anacortes Seattle
Latitude (degree) 31.20 N 47.27 N 48.52 NLongitude (degree) 121.50 E 142.21 W 122.61 W
Distance from Last (n.miles) 5345 1453 1117 70non‐ECA (n.miles) 5345 726.5 0 0ECA (n.miles) 0 726.5 1117 70
Transit Timenon‐ECA (days) 9.68 1.51 0.00 0.00ECA (days) 0.00 1.51 3.21 0.15
Port Time (days) 2.00 0.25 0.75 0.50Port Name Los Angeles Anchorage Long Beach SitkaDistance from Last (n.miles) 5643 1453 1117 804non‐ECA (n.miles) 4882 726.5 0 0ECA (n.miles) 761 726.5 1117 804
Transit Timenon‐ECA (days) 8.84 1.51 0.00 0.00ECA (days) 1.38 1.51 3.21 1.70
Port Time (days) 1.00 0.42 0.75 0.25Port Name Oakland Victoria, BCDistance from Last (n.miles) 374 743non‐ECA (n.miles) 0 0ECA (n.miles) 374 743
Transit Timenon‐ECA (days) 0.0 0.00ECA (days) 0.68 1.57
Port Time (days) 1.0 0.25Trip Total (days) 24.6 6.7 7.9 4.4Transit Timenon‐ECA (days) 18.5 3.0 0.0 0.0ECA (days) 2.1 3.0 6.4 3.4
Port Time (ECA) (days) 4.0 0.7 1.5 1.0Page 21, Glosten Associates © 2013
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Life Cycle Cost Analysis
Variables and Example Vessels
Key Variables• Estimate Fuel
Consumption Rates• Review Machinery
Plant Efficiencies• Review Propulsion,
Cargo, Hotel Loads Separately
• Estimate Fuel Consumptions
Containership Transpacific
Containership US West Coast
Tankship US West Coast
Cruise Ship North America
Installed EquipmentPropulsion (kW) 1 x 36,000 1 x 16,000 1 x 10,100 3 x 10,520
(gr/kW‐hr) 170 175 175 175Auxiliary (kW) 3 x 1,000 3 x 1000 3 x 1,000 2 x 7,500
(gr/kW‐hr) 185 185 185 175Annual Ops (days) 320 320 320 320
Transit (kW) 30,200 14,700 9,000 24,668Non‐ECA (hours/yr) 5,788 3,459 0 0
Fuel (MT/yr) 29,714 8,899 0 0ECA (hours/yr) 643 3,459 6,225 5,939
Fuel (MT/yr) 3,299 8,899 9,805 25,638Ships Service (kW) 1200 800 350 9,000Non‐ECA (hours/yr) 5,788 3,459 0 0
Fuel (MT/yr) 1,285 512 0 0ECA (hours/yr) 1,892 4,221 7,680 7,680
Fuel (MT/yr) 420 625 497 12,096Cargo Support (kW) 800 800 2000 0ECA (hours/yr) 1,250 762 1,455 1,741
Fuel (MT/yr) 185 113 538 0Fuel Total Fuel (MT/yr) 34,903 19,046 10,840 37,734Non‐ECA Fuel (MT/yr) 30,999 9,410 0 0ECA Fuel (MT/yr) 3,904 9,636 10,840 37,734
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Life Cycle Cost Analysis
Variables and Example Vessels
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Key Variables• Estimate Equipment
Costs Using General Factors
• Equipment Quotes• Review Scope of Quotes• Estimate Installation,
Design, O&M, Repair, Mid-Life Refit
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Life Cycle Cost Analysis
Variables and Example Vessels
Key Variables• Estimate Equipment Costs
Using General Factors• Equipment Quotes• Review Scope of Quotes• Estimate Installation, Design,
O&M, Repair, Mid-Life RefitAnalysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
Plant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%
Redline for Open Loop Scrubber
Page 24, Glosten Associates © 2013
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Life Cycle Cost AnalysisBaseline Cases:• Net Savings• Looking good >4,000
MT/year
Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual (19 Nov 2013) 632Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%Page 25, Glosten Associates © 2013
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Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual (19 Nov 2013) 632Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisBaseline Cases:• Net Savings• Looking good >4,000
MT/year
Page 26, Glosten Associates © 2013
Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489
Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358
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Life Cycle Cost AnalysisBaseline Cases:• Net Savings• Looking good >4,000
MT/year
Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 1,900 16,300 18,700 76,200Operating Savings, Annual (1,000 USD/yr) 900 2,400 2,600 9,600
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,500 5,000 4,500 8,700Equipment (1,000 USD) 4,500 3,500 3,100 5,200Engineer/Review/Training (% equip) 9% 9% 9% 9%Installation (% equip) 50% 50% 50% 75%
Fuel Cost Savings, Life Cycle (1,000 USD) 9,000 22,300 25,100 87,300Fuel cost savings, annual (1,000 USD/yr) 1,035 2,555 2,875 10,007ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489Scrubber parasitic load (% fuel) 2.0% 2.0% 2.0% 2.0%
ECA distillate option (m.tons/yr) 3,717 9,173 10,320 35,923Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%
ECA residual baseline (m.tons/yr) 3,904 9,636 10,840 37,734Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0Chemical expenses, annual (1,000 USD/yr) 0 0 0 0Chemicals (% fuel cost) 0.0% 0.0% 0.0% 0.0%
OM&R Expenses, Life Cycle (1,000 USD) 600 1,000 1,900 2,400OM&R expenses, annual (1,000 USD/yr) 90 160 304 388Operating engineer (% position) 15% 30% 60% 60%M&R of equipment (% equip cost) 1.0% 2.0% 4.0% 4.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 1‐Jan‐13 Residual (20 Jan 2013) 650Construction Date 4‐Jul‐14 Differential (Distil l . vs. Residual) 50%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 300 Energy & Chemical Escalation 8.0%
Review Technology:• Consider Baseline
Containership US West Coast• Review Various Technologies
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Analysis: Impact of Vessel Types Open Loop Scrubber (All Cases)and Trade Routes Container‐ Container‐Amounts in Present Value. ship ship Tankship CruiseshipTotals and sub‐totals rounded to 100,000. Trans‐ US West US West NorthSavings compared to burning distillate in ECA. Pacific Coast Coast America
NET SAVINGS, LIFE CYCLE (1,000 USD) 2,600 18,300 21,200 84,800Operating Savings, Annual (1,000 USD/yr) 1,000 2,600 2,800 10,500
Key VariablesPlant (Prop. & Ship Service) (MW) 39 19 13 47Fuel burned inside ECA (%) 11% 51% 100% 100%
Initial Investment, One Time (1,000 USD) 6,900 5,300 4,700 9,200Fuel Cost Savings, Life Cycle (1,000 USD) 10,000 24,600 27,700 96,400Fuel cost savings, annual (1,000 USD/yr) 1,124 2,775 3,121 10,865ECA residual/scrubber (m.tons/yr) 3,982 9,829 11,057 38,489
Chemical Expenses, Life Cycle (1,000 USD) 0 0 0 0OM&R Expenses, Life Cycle (1,000 USD) 500 1,000 1,800 2,400OM&R expenses, annual (1,000 USD/yr) 83 145 274 358
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Life Cycle Cost Analysis
Variables and Example Vessels
Estimate Differences:• Parasitic Loads• Chemical Consumption and
Costs• Engineering, Installation,
O&M, Repair, Mid-Life Refit
and …
• And Capital Costs
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Apply All Technologies to Containership US West Coast
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Life Cycle Cost Analysis
Variables and Example Vessels
Apply All Technologies to Containership US West Coast
Analysis: Impact of Various EGCS Containership US West Coast (All Cases)Technologies on Single Vessel Open Closed Hybrid DryAmounts in Present Value. Loop Loop (Open & ChemicalTotals and sub‐totals rounded to 100,000. Scrubber Scrubber Closed Loop) ScrubberSavings compared to burning distillate in ECA. ScrubberEquipment (1,000 USD) 3,500 4,100 3,500 3,500Engineer/Review/Training (% equip) 9% 11% 11% 7%Installation (% equip) 50% 60% 60% 40%Scrubber parasitic load (% fuel) 2.5% 1.0% 2.1% 0.5%ECA distillate option (m.tons/yr) 9,173 9,173 9,173 9,173Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%Chemical expenses, annual (1,000 USD/yr) 0 204 52 407Chemical cost (USD/ton) 0 300 300 350Chemicals consumption (% fuel weight) 0.0% 7.0% 1.8% 12.0%OM&R expenses, annual (1,000 USD/yr) 160 232 220 160Operating engineer (% position) 30% 50% 50% 30%M&R of equipment (% equip cost) 2.0% 2.0% 2.0% 2.0%
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Analysis: Impact of Various EGCS Containership US West Coast (All Cases)Technologies on Single Vessel Open Closed Hybrid DryAmounts in Present Value. Loop Loop (Open & ChemicalTotals and sub‐totals rounded to 100,000. Scrubber Scrubber Closed Loop) ScrubberSavings compared to burning distillate in ECA. Scrubber
NET SAVINGS, LIFE CYCLE (1,000 USD) 18,000 15,300 16,900 15,900Operating Savings, Annual (1,000 USD/yr) 2,600 2,400 2,500 2,300
Initial Investment, One Time (1,000 USD) 5,300 6,700 5,800 4,900Equipment (1,000 USD) 3,500 4,100 3,500 3,500Engineer/Review/Training (% equip) 9% 11% 11% 7%Installation (% equip) 50% 60% 60% 40%
Fuel Cost Savings, Life Cycle (1,000 USD) 24,300 25,200 24,500 25,400Fuel cost savings, annual (1,000 USD/yr) 2,744 2,835 2,767 2,866ECA residual/scrubber (m.tons/yr) 9,877 9,732 9,841 9,684Scrubber parasitic load (% fuel) 2.5% 1.0% 2.1% 0.5%ECA distillate option (m.tons/yr) 9,173 9,173 9,173 9,173Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%ECA residual baseline (m.tons/yr) 9,636 9,636 9,636 9,636Fuel burned inside ECA (%) 51% 51% 51% 51%
Chemical Expenses, Life Cycle (1,000 USD) 0 1,800 500 3,600Chemical expenses, annual (1,000 USD/yr) 0 204 52 407Chemical cost (USD/ton) 0 300 300 350Chemicals consumption (% fuel weight) 0.0% 7.0% 1.8% 12.0%
OM&R Expenses, Life Cycle (1,000 USD) 1,000 1,400 1,300 1,000OM&R expenses, annual (1,000 USD/yr) 145 207 195 145Operating engineer (% position) 30% 50% 50% 30%M&R of equipment (% equip cost) 2.0% 2.0% 2.0% 2.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual 11/2013 (USD/m.ton 632Construction Date 1‐Jul‐14 Differential (Dist. vs. Residua 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisVarious Technologies:• Net Savings Vary by
less than +/- 10%• Investment Costs Vary
by ~16%• Annual Operating
Savings Vary by ~7%• All Differences are
within Margin of Error
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Analysis: Impact of Various EGCS Containership US West Coast (All Cases)Technologies on Single Vessel Open Closed Hybrid DryAmounts in Present Value. Loop Loop (Open & ChemicalTotals and sub‐totals rounded to 100,000. Scrubber Scrubber Closed Loop) ScrubberSavings compared to burning distillate in ECA. Scrubber
NET SAVINGS, LIFE CYCLE (1,000 USD) 18,000 15,300 16,900 15,900Operating Savings, Annual (1,000 USD/yr) 2,600 2,400 2,500 2,300
Initial Investment, One Time (1,000 USD) 5,300 6,700 5,800 4,900Equipment (1,000 USD) 3,500 4,100 3,500 3,500Engineer/Review/Training (% equip) 9% 11% 11% 7%Installation (% equip) 50% 60% 60% 40%
Fuel Cost Savings, Life Cycle (1,000 USD) 24,300 25,200 24,500 25,400Fuel cost savings, annual (1,000 USD/yr) 2,744 2,835 2,767 2,866ECA residual/scrubber (m.tons/yr) 9,877 9,732 9,841 9,684Scrubber parasitic load (% fuel) 2.5% 1.0% 2.1% 0.5%ECA distillate option (m.tons/yr) 9,173 9,173 9,173 9,173Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%ECA residual baseline (m.tons/yr) 9,636 9,636 9,636 9,636Fuel burned inside ECA (%) 51% 51% 51% 51%
Chemical Expenses, Life Cycle (1,000 USD) 0 1,800 500 3,600Chemical expenses, annual (1,000 USD/yr) 0 204 52 407Chemical cost (USD/ton) 0 300 300 350Chemicals consumption (% fuel weight) 0.0% 7.0% 1.8% 12.0%
OM&R Expenses, Life Cycle (1,000 USD) 1,000 1,400 1,300 1,000OM&R expenses, annual (1,000 USD/yr) 145 207 195 145Operating engineer (% position) 30% 50% 50% 30%M&R of equipment (% equip cost) 2.0% 2.0% 2.0% 2.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual 11/2013 (USD/m.ton 632Construction Date 1‐Jul‐14 Differential (Dist. vs. Residua 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisSensitivity:• Installation Expenses• Fuel within ECA• OM&R Expenses• Fuel Cost Differential
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Analysis: Impact of Various EGCS Containership US West Coast (All Cases)Technologies on Single Vessel Open Closed Hybrid DryAmounts in Present Value. Loop Loop (Open & ChemicalTotals and sub‐totals rounded to 100,000. Scrubber Scrubber Closed Loop) ScrubberSavings compared to burning distillate in ECA. Scrubber
NET SAVINGS, LIFE CYCLE (1,000 USD) 18,000 15,300 16,900 15,900Operating Savings, Annual (1,000 USD/yr) 2,600 2,400 2,500 2,300
Initial Investment, One Time (1,000 USD) 5,300 6,700 5,800 4,900Equipment (1,000 USD) 3,500 4,100 3,500 3,500Engineer/Review/Training (% equip) 9% 11% 11% 7%Installation (% equip) 50% 60% 60% 40%
Fuel Cost Savings, Life Cycle (1,000 USD) 24,300 25,200 24,500 25,400Fuel cost savings, annual (1,000 USD/yr) 2,744 2,835 2,767 2,866ECA residual/scrubber (m.tons/yr) 9,877 9,732 9,841 9,684Scrubber parasitic load (% fuel) 2.5% 1.0% 2.1% 0.5%ECA distillate option (m.tons/yr) 9,173 9,173 9,173 9,173Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%ECA residual baseline (m.tons/yr) 9,636 9,636 9,636 9,636Fuel burned inside ECA (%) 51% 51% 51% 51%
Chemical Expenses, Life Cycle (1,000 USD) 0 1,800 500 3,600Chemical expenses, annual (1,000 USD/yr) 0 204 52 407Chemical cost (USD/ton) 0 300 300 350Chemicals consumption (% fuel weight) 0.0% 7.0% 1.8% 12.0%
OM&R Expenses, Life Cycle (1,000 USD) 1,000 1,400 1,300 1,000OM&R expenses, annual (1,000 USD/yr) 145 207 195 145Operating engineer (% position) 30% 50% 50% 30%M&R of equipment (% equip cost) 2.0% 2.0% 2.0% 2.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual 11/2013 (USD/m.ton 632Construction Date 1‐Jul‐14 Differential (Dist. vs. Residua 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisSensitivity:• Fuel Cost Differential• Fuel within ECA• Installation Expenses• OM&R Expenses
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Analysis: Sensitivity of Fuel Differential
Amounts in Present Value.Totals and sub‐totals rounded to 100,000. Open Loop Scrubber (All Cases)Savings compared to burning distillate in ECA. Containership US West Coast (All Cases)
Distillate Fuel Premium over Residual 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 200 10,500 20,800 31,100 41,400Operating Savings, Annual (1,000 USD/yr) 600 1,700 2,900 4,100 5,200
Fuel Consumed within ECA by Weight 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 3,300 13,100 22,800 32,500 42,300Operating Savings, Annual (1,000 USD/yr) 900 2,000 3,100 4,200 5,300
Installation to Equipment Cost Percentage 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 19,500 18,800 18,100 17,400 16,800Operating Savings, Annual (1,000 USD/yr) 2,600 2,600 2,600 2,600 2,600
OM&R Expenses as Percentage of EquipmentOperating engineer (% pos i tion) 20.0% 40.0% 60.0% 80.0% 100.0%M&R of equipment (% equip cost) 2.0% 4.0% 6.0% 8.0% 10.0%Net Savings, Life Cycle (1,000 USD) 18,400 17,600 16,700 15,900 15,000Operating Savings, Annual (1,000 USD/yr) 2,600 2,500 2,400 2,300 2,100
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Analysis: Impact of Various EGCS Containership US West Coast (All Cases)Technologies on Single Vessel Open Closed Hybrid DryAmounts in Present Value. Loop Loop (Open & ChemicalTotals and sub‐totals rounded to 100,000. Scrubber Scrubber Closed Loop) ScrubberSavings compared to burning distillate in ECA. Scrubber
NET SAVINGS, LIFE CYCLE (1,000 USD) 18,000 15,300 16,900 15,900Operating Savings, Annual (1,000 USD/yr) 2,600 2,400 2,500 2,300
Initial Investment, One Time (1,000 USD) 5,300 6,700 5,800 4,900Equipment (1,000 USD) 3,500 4,100 3,500 3,500Engineer/Review/Training (% equip) 9% 11% 11% 7%Installation (% equip) 50% 60% 60% 40%
Fuel Cost Savings, Life Cycle (1,000 USD) 24,300 25,200 24,500 25,400Fuel cost savings, annual (1,000 USD/yr) 2,744 2,835 2,767 2,866ECA residual/scrubber (m.tons/yr) 9,877 9,732 9,841 9,684Scrubber parasitic load (% fuel) 2.5% 1.0% 2.1% 0.5%ECA distillate option (m.tons/yr) 9,173 9,173 9,173 9,173Distillate calorie correction (% fuel) ‐4.0% ‐4.0% ‐4.0% ‐4.0%Residual heat & process (% fuel) ‐0.8% ‐0.8% ‐0.8% ‐0.8%ECA residual baseline (m.tons/yr) 9,636 9,636 9,636 9,636Fuel burned inside ECA (%) 51% 51% 51% 51%
Chemical Expenses, Life Cycle (1,000 USD) 0 1,800 500 3,600Chemical expenses, annual (1,000 USD/yr) 0 204 52 407Chemical cost (USD/ton) 0 300 300 350Chemicals consumption (% fuel weight) 0.0% 7.0% 1.8% 12.0%
OM&R Expenses, Life Cycle (1,000 USD) 1,000 1,400 1,300 1,000OM&R expenses, annual (1,000 USD/yr) 145 207 195 145Operating engineer (% position) 30% 50% 50% 30%M&R of equipment (% equip cost) 2.0% 2.0% 2.0% 2.0%Investment Terms Analysis based on NIST Handbook 135, published 1995Base (Analysis) Date 19‐Nov‐13 Residual 11/2013 (USD/m.ton 632Construction Date 1‐Jul‐14 Differential (Dist. vs. Residua 55%Service Date 1‐Jan‐15 Rate of Inflation 3.0%Service Period (years) 10 Discount Rate 10.0%Operating Engineer (1,000 USD/yr) 250 Energy & Chemical Escalation 8.0%
Life Cycle Cost AnalysisSensitivity:• Fuel Cost Differential• Fuel within ECA• Installation Expenses• OM&R Expenses
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Analysis: Sensitivity of Fuel Differential
Amounts in Present Value.Totals and sub‐totals rounded to 100,000. Open Loop Scrubber (All Cases)Savings compared to burning distillate in ECA. Containership US West Coast (All Cases)
Distillate Fuel Premium over Residual 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 200 10,500 20,800 31,100 41,400Operating Savings, Annual (1,000 USD/yr) 600 1,700 2,900 4,100 5,200
Fuel Consumed within ECA by Weight 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 3,300 13,100 22,800 32,500 42,300Operating Savings, Annual (1,000 USD/yr) 900 2,000 3,100 4,200 5,300
Installation to Equipment Cost Percentage 20% 40% 60% 80% 100%Net Savings, Life Cycle (1,000 USD) 19,500 18,800 18,100 17,400 16,800Operating Savings, Annual (1,000 USD/yr) 2,600 2,600 2,600 2,600 2,600
OM&R Expenses as Percentage of EquipmentOperating engineer (% pos i tion) 20.0% 40.0% 60.0% 80.0% 100.0%M&R of equipment (% equip cost) 2.0% 4.0% 6.0% 8.0% 10.0%Net Savings, Life Cycle (1,000 USD) 18,400 17,600 16,700 15,900 15,000Operating Savings, Annual (1,000 USD/yr) 2,600 2,500 2,400 2,300 2,100
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Exhaust Gas Cleaning SystemsLife Cycle Cost Analysis - Conclusions
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Conclusions:
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Conclusions:• Primary Drivers: ECA Fuel Consumption, Fuel Cost Differential• Select Technology for Technical, not Cost, Reasons• Life Cycle Cost is ONLY Reason for Ship Operator to Install
Scrubbers – Evaluate using Net Savings (NS) Metric• Net Savings Become Positive at ~ 4,000 MT/Year within ECA• At Higher ECA Fuel Consumption Rates, Scrubbers (or Natural
Gas) may become a Competitive Necessity
Exhaust Gas Cleaning SystemsLife Cycle Cost Analysis - Conclusions
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Conclusions:• Primary Drivers: ECA Fuel Consumption, Fuel Cost Differential• Select Technology for Technical, not Cost, Reasons• Life Cycle Cost is ONLY Reason for Ship Operator to Install
Scrubbers – Evaluate using Net Savings (NS) Metric• Net Savings Become Positive at ~ 4,000 MT/Year within ECA• At Higher ECA Fuel Consumption Rates, Scrubbers (or Natural
Gas) may become a Competitive Necessity
Exhaust Gas Cleaning SystemsLife Cycle Cost Analysis - Conclusions
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