green retrofit - opportunities and challenges from the suppliers point of view retrofitting project...

MARKIS Annual Conference 30. november 2011 1

Green retrofit - opportunities and challenges

from the suppliers’ point of view

“Retrofitting Project”

By Michael Vihlmann Jensen, Technical Project Manager, Danish Maritime


Danish Maritime is a trade organization formed in 1919 by Danish businesses within the fields of shipbuilding, maritime production, development, research and service.

Our aim is to collectively safeguard the common interests of businesses in the Danish maritime industry.


Retrofitting Project - background and objectives

The association's retrofitting project, made possible through support from The Danish Maritime Fund, intends to strengthen the Blue Denmark's ability to offer better and more environmentally and climate friendly products and technical solutions, and subsequent service in order to improve competitiveness.

Requirements, regulations and increasing operating costs create a need for upgrading the existing fleet to maintain an economically profitable operation of ships and ensure that ships comply with the most stringent environmental regulations.


Retrofitting Project - background and objectives

The existing fleet, including already contracted vessels and vessels to be delivered within the next few years, is historically high and will for years to come make up the majority of the world fleet.

It is within the existing fleet that an immediate, significant reduction in the emissions of CO2, NOx and SOx can be achieved.

Therefore, it is imperative to focus on retrofitting of the existing fleet.


Definitions:

Retrofit:

Replacement of sub-systems on existing ships. Addition of new technology or features to older systems.

Upgrade:

Replacement or modification of complete systems. Replacement of a product with a newer version of the same product.

Modernization:

Replacement of equipment to a newer version.


Trends in world trade

• World economy growth is expected to slow down

Trends in seaborne trade

• New contracts in 2007 at approx. 90 million cgt

• Significant drop to 16.6 million cgt in 2009

• New contracts in 2010 increased to 38.6 million cgt (2,523 ships)

• Total seaborne trade is expected to increase over the next 20 years

• Existing fleet is approx. 100,000 ships in operation worldwide

• Until 2014 there will be a general overcapacity in transportation

• There will be a continued overcapacity of shipyards

Souce:IHS Fairplay & CESA


Source:IMF

World trade:


Source:Trade & fleet – ClarksonsTrade scenario - CESA

Over-capacity


Source:CESA

Completions :

0

500

1000

1500

2000

2500

3000

3500

2005 2006 2007 2008 2009 2010

Completed tonnage 2005 - 2010 no. of ships

Others

Japan

South Korea

China

other Europa

EU


Source:CESA

Shipyard capacity compared to deliveries

2012 20150

10

20

30

40

50

60

Shipyard capacity in mill. cgt Completions in mill cgt

mill. cgt


Stricter limits for air pollution (MARPOL) timeline

• 2010 max sulfur content in bunker fuel in ECA's 1 % (1.5 %)

• 2011 TIER II, Global NOx limit (reduction by approx. 20 %)

• 2012 maximum sulfur content in bunker fuel globally 3.5 %

• 2015 max sulfur content in bunker fuel in ECA's 0.1 %

• 2016 Tier III, NOx levels in ECA areas (reduction by approx. 80 %)

• 2020 maximum sulfur content in bunker fuel globally 0.5 %

Other requirements:

• Treatment of ballast water and bilge water

• Market based measurements (EEDI, SEEMP, CO2 tax)

• Ship recycling, Hong Kong Convention

12MARKIS Annual Conference 30. november 2011

Challenges for the shipbuilding industry

• Shipbuilding industry affected by the financial crisis (2008)

• Compliance with the most stringent environmental regulations

• Increasing operating costs (bunker fuel prices)

• Fall in freight rates

• Fall in vessel values

Increased fuel prices -> reduce energy consumption

Fall in freight rates -> reduce operating costs

Stricter environmental requirements -> reduce emissions

Fall in vessel values -> loss of collateral for project financing


Process and Timetable (1)

Mapping regulations- IMO and EU regulations- other authorities (U.S.)

Mapping existing environmenttally friendly solutions

Dec ‘10 – May ‘11 Jun ‘11 – Aug ‘11+ Sept ‘11 – Nov ‘11+

Th

e D

an

ish M

aritim

e Fu

nd

Financin

g o

f the p

roje

ct Mapping the financing- funds & subsidies

Start-up phase Mapping phase Analysis phase

Identify and define Shipping industry key environmental challenges

Dem

arc

atio

nFo

cus o

n re

trofi

tting a

nd m

aritim

e,

enviro

nm

enta

l challe

ng

es

Initial meetings with businesses & ownersMutual overview of common business and product areas

Analysing- business opportunities- project opportunities- funding opportunities- matchmaking

Establish- workshops- projects/working groups- development cooperation

Steering Group- sparring partner- maritime businesses- maritime organizations

Monitoring Group

- political initiatives

Project Manager


Workgroup (1)Joint marketing of retrofitting solutions- perform common case histories

Purpose:- meet market expectations- create a retrofitting catalog- highlight the added value- joint marketing initiatives- system solutions- package solutions

Executing phase

Nov ‘11 - Dec ‘11 Jan ‘12 - Mar ‘12 Apr ‘12 – Jun ‘12

Process and Timetable (2)

WorkshopSummary of analysis phase

EstablishA working group for marketingof retrofitting solutions

Case 1: Container ship- shipowner 1- inspection on board- retrofitting catalog

Retrofitting catalog(dynamic)- investment packages- IT platform

Define new projects- develop new solutions- new partnerships- new system solutions

Search funds & research funds

Marketing of new solutions

Executing phase (project 1) New projects

Case 2: Tanker - shipowner 2- inspection on board- retrofitting catalog

Case 3: Offshore/supply- shipowner 3- inspection on board- retrofitting catalog


Retrofitting Catalog

The Danish maritime equipment suppliers have a variety of products and services which include environmental friendly and economically efficient solutions.

A Retrofitting Catalogue is a summary of investment packages that are economically attractive.

It provides shipowners easy access to make the optimal decision for investment in environmentally friendly retrofitting solutions.

Solutions which apply to specific regulatory requirements and ensure a future economically profitable operation of the ship.


Retrofitting Catalog

Contents:

• Specific solutions

• Investment

• Payback period

• Added value (vessel value)

• Upgrade in-situ possible

• Implementation

• Life cycle management


Target areas - retrofitting (1)

1. Emissions (rule driven)

Fulfill requirements for sulfur content in fuel & related emissions of SOx

• Fulfillment by using low sulfur fuel (MGO, LNG)

• Fulfillment by using technology (EGC)

Fulfill requirements for emissions of NOX

• Fulfillment by using technology (SCR, EGR, EGE)

• Fulfillment by using LNG

General reduction of SOx, NOx, CO2, particulate matters, soot, VOC, GHG

• Pretreatment of fuel (WIF, FWE)

• Reduced fuel consumption (slow steaming, efficiency, operation)



2. Energy optimization/optimized operation

Ensure economically profitable and efficient operation of ships

Minimum energy consumption - maximum efficiency - no waste (LEAN)

• Efficient engines & HVAC’s (fans, pumps, cooling systems)

• Efficient propulsion systems

• Optimized power and energy management

• Online/real time measurement of operations (engine performance, fuel consumption)

• IT systems, decision support systems, Dynamic Route Planning, Fleet Management

• Hydraulic friction (fouling, design flow)



3. Operational Safety

Safe operation of ship engines and equipment (avoid downtime/breakdown, abrasive degradation and accidents)

• Use of MGO, HFO/MGO switch

• Online/real time measurement of operation (engine performance, fuel consumption)

• Monitoring, collection of data (documentation)



4. Recovery

• Waste Heat Recovery (WHR), heat exchangers, Exhaust Gas Economizer (EGE)

• Vapor recovery (gases) from the cargo

• Ship recycling and component reuse

5. Safety and Environment (rule driven)

Fulfill requirements for safety and environment (SOLAS & MARPOL)

• Personal safety (noise, vibration, work injuries, chemicals, fire)

• Fire (accommodation areas, engine room, CO2, water mist systems, monitoring)

• Treatment of ballast water, oily water and waste

6. Alternative propulsion systems/ solutions / design and fuels


More information: Michael Vihlmann JensenTechnical Project Manager

Danish MaritimeAmaliegade 33 B, 4.1256 København K tel: +45 3313 2416 direct: +45 3345 4398fax: +45 3311 1096 [email protected]

mailto:[email protected]

http://www.danskemaritime.dk/

http://www.danskemaritime.dk/

green retrofit - opportunities and challenges from the suppliers point of view retrofitting project...

Documents

cesa markis annual conference

imf markis annual conference

project financing slide

deliveries slide

existing ships

danish maritime industry

years existing fleet

bunker fuel