Efficiency Technologies Set Sail In Maritime Shipping Industry

Now, market trends are converging to create promise for efficiency technologies, despite low fuel prices. A growing number of stakeholders are prioritizing efficiency, including charterers (those that rent ships), banks, port authorities, and ship registries. With this growing prioritization, these parties are starting to shift money towards and reward more-efficient vessels.

For example, today, charterers representing 20 percent of global shipped tonnage have policies in place to avoid using the most-inefficient ships based on the GHG Emissions Rating, developed by maritime risk-management specialist RightShip and Carbon War Room. That’s a 450-percent increase in the past 2.5 years, and we expect that number to continue growing in the coming years.

Alongside the shift from charterers, shipping banks are starting to acknowledge the development of a two-tier market, in which efficient vessels are able to command a premium rate over less-efficient vessels. As a result, banks are recognizing the impact that ship efficiency has on assets on their books, and are using efficiency data to assess risk and return, and inform credit approvals and re-sale and scrapping decisions. As banks encourage efficiency retrofits where they make sense, and demonstrate to shipowners that efficient ships are more profitable, this financial lever in the industry will act as a powerful incentive for shipowners to retrofit for greater efficiency.

Complementing this progress, ambitious leaders, such as those behind Norsepower and Bore, are demonstrating the viability of efficiency technologies—as well as the financial gains they offer—and creating greater credibility for emerging technologies. In fact, with the results from the single-rotor trial, Bore is already looking ahead to the opportunity of two rotors on one ship. “We are proud to be the first shipowner to install the Norsepower Rotor Sail, and demonstrate that wind propulsion technology has verifiable five-percent fuel savings on a yearly basis, can be retrofitted without any off-hire costs, and is extremely easy to use in practice. It’s our goal to find ways to establish sustainable shipping with minimal impact on our environment,” say sJörgen Mansnerus, vice president of Bore.

The Norsepower announcement is one of many such trials that can pave the way to a low-carbon shipping industry. However, finding companies willing to pioneer technologies on their vessels is no easy feat. Building such confidence in emerging technologies is the integral focus of Carbon War Room and University College London’s Shipping Innovation Fast-Tracker(SHIFT), in which Norsepower participates alongside other technology companies. The program matches innovative technology companies, shipowners and operators, and investors to boost the profile of low-carbon opportunities and promote investment in the industry.

WHY CHARTERS SHOULD RIDE THIS WAVE

Fuel buyers can buttress their balance sheet by adopting fuel-saving technologies, automatically protecting them from the pressures of a tenuous oil market. What makes the proposition even more enticing is the fact that successful technologies, like the Rotor Sail Solution, exist today, and can be deployed and scaled quickly.

“Modern wind systems are demonstrating measurable and meaningful fuel savings for ships. As wind propulsion, air bubble systems, and other ground-breaking technologies are increasingly adopted and become mainstream, the industry will reap the rewards of lower fuel costs—more sustainable than those from short-term price decreases, and be able to stay ahead of external pressures,” says Jose Maria Figueres, chair of the board of Rocky Mountain Institute and Carbon War Room.

In addition, by incorporating these successful technologies into new builds and existing vessels, shipowners can stay ahead of policy. While the industry’s existing fleet is not currently subject to stringent policy measures or mandates to meet efficiency requirements, such policy could arrive and leave the industry in a pinch, if it is not prepared. And, if such policy arises, shipowners that have already retrofitted will stand to gain additional competitive advantage.

Images courtesy of Norsepower.