Class & fuel
operating in the North Sea. But DNV executives are convinced that gas also offers an interesting option for ocean-going tonnage trading worldwide. Class society boss Henrik Madsen has even predicted that by 2020, many ship operators will insist on new ships having the capability of burning both LNG and conventional bunker fuel. And he believes that LNG could well become shipping’s dominant fuel within the next decade. Others are not so sure. They point to the issues of availability and safety, as well as the fact that LNG is still a carbon-based fuel and may not cut CO2 emissions by as much as first thought when its entire supply chain is taken into account. They also suggest that today’s price gap between conventional bunker fuel and LNG could narrow if large-scale demand builds up. On the other hand, rocketing demand for low-sulphur fuels suggests that prices for such fuel will only go one way.
The ‘conceptual designs’ launched by DNV recently – for ships including a VLCC, a container ship and a very large bulk carrier – all envisage the use of LNG as a principal fuel. And whilst Madsen concedes that more LNG bunkering facilities are needed in key locations, he points out that a gas supply infrastructure is developing nicely on Norway’s coast and in the Baltic Sea. Moreover, he says, large supplies of gas are readily available at most key shipping locations around the globe – in Asia,
Sleep-walking N
iels Smedegaard is chief executive of DFDS, a Danish freight and passenger ferry owner operating a network of services in Europe’s Emissions Control Area (ECA). He believes the industry was sleep-walking while today’s regulatory framework for ships’ fuel was drawn up. The regulators at the IMO came up with a plan but nobody in shipping was sufficiently on the ball to put forward an industry case for more time and more consultation. ‘The issues are far more complicated than they thought one night in the IMO,’ says Smedegaard. Now, he says, not only are some European operators, like DFDS, at a
10
Where’s the smoke?
the Middle East, Europe and the US. There is no reason, he points out, why some types of gas-powered vessels in the future could not be designed for less frequent bunkering. DNV’s ‘Triality’ VLCC, which incorporates a range of
environmentally beneficial features including a radical hull form and no ballast tanks, envisages sufficient LNG stored in two 6,750 cu mtr tanks on deck to enable her to circumnavigate the globe, if required to do so. The society’s conceptual designs have already stimulated considerable interest from owners weighing up their strategies in the run-up to the introduction of IMO’s Energy Efficiency Design Index (EEDI). This will require new vessels to improve upon a baseline case in terms of fuel consumption and efficiency. There is a premium on price,
however. LNG propulsion, together with other innovative features, would mean that the Triality VLCC would likely cost 10-15% more than a
conventional vessel, according to DNV. However, improvements in efficiency would soon offset this extra first cost. In a discounted cash flow analysis assuming a discount rate of 8% and an operating life of 20 years, the net present value of the Triality design is about $24m. In addition, there are the
environmental benefits associated with lower emissions – 34% less CO2, 80% less NOx and 95% less SOx and particulates. Part of this will be achieved by capturing the Volatile Organic Compounds normally released during cargo handling, and condensing them as fuel for auxiliaries to produce steam for the ship’s cargo pumps. In total, DNV estimates that the features envisaged on board a Triality-concept vessel would improve energy efficiency by some 25% compared with a conventional VLCC. With bunker prices firmly in the $600s and showing no sign of easing, there are some very large numbers involved.
0.1% sulphur fuel from 2015 could be to force freight off ships and back on to road and rail, quite the opposite of the IMO’s aims. So, what’s the strategy at DFDS?
Smedegaard –Industry ‘sleep-walking’
competitive disadvantage compared with others operating outside of ECAs – some European countries, France, Ireland, Norway and the UK have coastlines both in- and outside the ECA – but the end result of
Well, Smedegaard says the company is ‘trying to get a thought- through solution’ so that cargo won’t leave the maritime supply chain. A scrubber is being tested with ‘very encouraging results’ and two new roro vessels currently under construction are being built with space available for scrubber retrofits. They will be powered by conventional fuel, although the possibility of running ships on LNG in the future is currently also being examined.
PHOTO: PIOTR B. STARENCZAK
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