Future Fuels Options for Ship Owners & Operators / ECA-Calculator

Transcription

1 Future Fuels Options for Ship Owners & Operators / ECA-Calculator LNG Initiative Nord-West Shih-Tung SHU Working together for a safer world

2 Past - MS Selandia, 1912 First ocean-going diesel powered vessel Feb. 1912, LR Chief Engineer Surveyor J T Milton: The engines worked admirably throughout the trial, There is every reason to expect that the engines will give equal satisfaction in regular running, that many oil engined vessels will be built for trading in parts where oil fuel can be regularly obtained. Which Way to Go?

3 Now Environmental Regulations Emission Control (SOx, NOx) Volatile organic compounds management IMO IGF-code Inventory Hazard Materials Garbage Management Ballast Water Management Bio Fouling Management UCSG Environmental Acceptable Lubricants EU MRV Regulation Environment Society Economy More ECA? CO2? PM? Which Way to Go?

4 Fuel Options Conventional fuels: HFO/LSHFO Marine residual fuel, competitive in price but higher environmental impact. MDO/MGO Marine distillate oil, compliant fuel. Alternative fuels: LNG Lower GHG emission than oil derived fuel, competitive in price. Methanol It has lower carbon content on a mass basis. Hydrogen has no carbon emissions in the point of operation Society Biofuels (biodiesel / biogas) has the potential of reducing GHG emissions Environment Economy

5 Environmental Impacts HFO MGO HFO MGO HFO MGO LNG LNG LNG CO 2 SO 2 NO x (Tonne CO2 eq.) (Tonne SO2 eq.) (Tonne NOx eq.) Gas route indicated better overall environmental performance than diesel route. Biofuels can have greater enviornmental impact for other impact categories (e.g. Primary energy, Agricultural land use) Source: LCA of present and future marine fuels, Bengtson, 2011

6 Fuel Price Oil derived HFO MDO/MGO LSHFO Methanol Hydrogen Gas derived LNG Hydrogen Price Gap Today MGO HFO: 240 USD MGO LNG: 190 USD MDO/MGO Methanol LNG LSHFO HFO HFO LNG: 50 USD Source: Global Marine Fuel Trend 2030, LR, 2012

7 Ship Owners Intention 2012 Survey finding - Mitigation of SOx emissions: 1. Short-term (~5 yrs): Low Sulphur Distillate Fuel 2. Medium-term (5 to 10 yrs): Exhaust Gas Scrubber 3. Long-term (10+ yrs): LNG-fuelled engines particularly for liner trade Ship owner s intentions for mitigation of SOx emissions For deep-sea ship types, there is doubt as to which option for compliance would be best Scrub LSDF Scrub LSDF Scrub Duel-F Scrub Scrub Duel-F LNG-F LNG-F LNG-F Short Medium Long No-intention Don t know Source: LNG fuelled deep-sea shipping, LR, 2012

8 Marine Fuel Mix 2030 Deep Sea Shipping Status Quo fuel mix for all 4 ship types 100% Container 75% Bulk/General Cargo HFO MDO/MGO LSHFO LNG Hydrogen Methanol 50% 25% 0% Tanker (Crude) Tanker (Product/Chemical) 11% share of LNG as marine fuel by 2030 (exsisting + new build) Source: Global Marine Fuel Trend 2030, LR, 2012

9 Deep-Sea Trades Forecast LNG Bunker demand Global LNG bunker demand 2025: 24 million tons (3.2 % of global HFO consumption) LNG-fuelled newbuilds 2025 : 653 ships (4.2% of global newbuilds) Source: LNG fuelled deep-sea shipping, LR, 2012

10 Technology Compatibility 2 stroke slow speed 4 stroke medium speed Diesel electric /Aux. HFO MDO/MGO LSHFO LNG Dual fuel engine (2/4 stroke) Gas engine (2/4 stroke) Fuel Cells Methanol Hydrogen

11 Scrubber/ MGO/ LNG / Methanol Comparison Rough overview of pros and cons on alternative technologies

12 Economical Factors - Which Way to Go? Compliance strategy consideration 1. ECA operation share Inside / Outside ECA time 2. Fuel Price Gap - HFO/MGO/LNG 3. CapEx - Scrubber/ Engine Conversion/ LNG tank systems. 4. Which party is covering the OpEx and which one in investing the CapEx? 5. More - Ship age, Port bunker availability, Technologies compatibility, etc.

13 Case Studies 2011 case study Container Vessel 2500 TEU - Wet Scrubber - LNG + Type C tank plus Waste Heat Recovery (WHR) 2013 case study North Sea Ferry - Wet Scrubber (Hybrid) - LNG + Type C tank Source: Cost and benefits of LNG as ship fuel for container vessels, 2011

14 Purpose of the Tool ECA Calculator Why? Evaluation of the economics of SOx compliances*: 1) Low sulphur fuels 2) Exhaust gas treatment systems (scrubbers) and 3) LNG as fuel. (Dual fuel engines) What? Lifecycle Cost: Cost of fuel, technology CAPEX and other OPEX. SOx / CO2 emissions Who? - Ship owners/operators, charterers and technology providers - or to anyone in the supply chain who wishes to investigate options. Society Environment Economy Which Way to Go? *NOx emissions compliance is not yet considered at this stage.

15 ECA Calculator section breakdown Input Fuel consumption Fuel price model EGCS data LNG data Excel Spread Sheet User-defined inputs 1. Up to 3 Cases (ship type, scenario or etc.) 2. Up to 5 Operation Modes 3. Up to 3 Machinery type + Aux. Boilers 4. Fuel price model / Scenarios (Low, Base, High)

16 Inputs for Fuel Price Model Fuel price model Current/future prices for high/low sulphur fuels Calorific values User-defined inputs 1. Timing of global 0.5% Sulphur limit? (2020 or 2025) 2. Currency 3. Lower heating value of fuels 4. Fuel price model 5. 3 Fuel Scenarios Low, Base, High HS Fuel < 3.50% LS Fuel < 0.50% LS Fuel < 0.10% LNG * the data is only shown as tool example for demonstration

17 OPEX comparison RoPax (40% ECA time) LS Fuel EGCS LNG * the data is only shown as tool example for demonstration Output OPEX comparison NPV Emissions comparison Custom graph

18 OPEX comparison RoPax (40% ECA time) Option 1: Low S fuel * the data is only shown as tool example for demonstration Option 2: EGCs Option 3: LNG as fuel 40%

19 Net Present Value comparison RoPax (40% ECA time) EGCS LNG * the data is only shown as tool example for demonstration EGCS LNG Payback period 1 years 4 years 1 months 2 months Year when NPV= Output OPEX comparison NPV Emissions comparison Custom graph

20 SOx and CO2 emissions comparison RoPax (40% ECA time) Annual Sulphur Emission [t] Using low sulphur fuel Before 2020 After 2020 Total [t] Annual CO2 Emission [t] Using low sulphur fuel Before 2020 After 2020 Total [t] 68, ,864.5 Using EGCS Total [t] Using EGCS Total [t] 68, ,152.7 Using LNG Using LNG Total [t] Total [t] 60, ,902.4 Pilot fuel, Aux. Engine, Boiler fuel Output OPEX comparison NPV Emissions comparison Custom graph

21 Detailed Calculation available for Custom Graphs Output OPEX comparison NPV Detailed Calculations - Data can be used to generate custom graphs Fuel oil prices - Low scenario Fuel oil prices - Base scenario Fuel oil prices - High scenario LNG Price Fuel price plot Baseline Cost (3.5% globally) - (1) Cost proportion outside ECA (2) Suphur Content No sulphur content Base scenario Max Sulphur Limit % Max Sulphur Limit % Time Spent in ECA RoPax Channel Ferry Cruise Ship RoPax Channel Ferry Cruise Ship RoPax Channel Ferry Emissions comparison Cruise Ship Annual CO2 Emission [t] Year Year i = <3.50 % S <0.50 % S <0.10 % S <3.50 % S <0.50 % S <0.10 % S <3.50 % S <0.50 % S <0.10 % S Low Base High Fuel oil <=3.50 % S Fuel oil <=0.50 % S Fuel oil <=0.10 % S LNG Inside ECA Outside ECA Inside Outside Inside Outside Inside Outside Low scenario 6,210,660 7,866,836 9,523,012 11,179,188 12,835,364 14,491,5 Base scenario 6,537,537 8,280,880 10,024,223 11,767,566 13,510,909 15,254,2 High scenario 6,864,414 8,694,924 10,525,434 12,355,945 14,186,455 16,016,9 Low scenario 5,216,509 6,607,578 7,998,647 9,389,716 10,780,785 12,171,8 Base scenario 5,491,062 6,955,345 8,419,628 9,883,912 11,348,195 12,812,4 High scenario 5,765,615 7,303,112 8,840,610 10,378,107 11,915,605 13,453,1 Low scenario 10,515,123 13,319,156 16,123,189 18,927,221 21,731,254 24,535,2 Base scenario 11,068,550 14,020,164 16,971,777 19,923,391 22,875,004 25,826,6 High scenario 11,621,978 14,721,172 17,820,366 20,919,560 24,018,755 27,117,9 * Low the scenario data is only 4,074,601 shown as 5,161,162 tool example 6,247,722for 7,334,282 demonstration 8,420,843 12,458,8 Base scenario 4,289,054 5,432,802 6,576,549 7,720,297 8,864,045 13,114,6 High scenario 4,503,507 5,704,442 6,905,377 8,106,312 9,307,247 13,770,3 Low scenario Base scenario Custom graph High scenario Low scenario 9,098,033 11,524,175 13,950,317 16,376,460 18,802,602 27,819,0 Base scenario 9,576,877 12,130,711 14,684,545 17,238,378 19,792,212 29,283,1 High scenario 10,055,721 12,737,246 15,418,772 18,100,297 20,781,823 30,747,3

22 To Conclude Technology led us from coal to oil. Over the coming years will it lead us somewhere new, or take us back? Which Way to Go?

23 Shih-Tung Shu Consultancy Specialist Hamburg Marine Business Development (CEA) T +49 (0) First name Last name E shih-tung.shu@lr.org Position W Unit/ Department T +44 (0) E xxxxx.xxxxx@lr.org Lloyd's Register EMEA Niederlassung Deutschland, Lloyd s Am Sandtorkai Register 41, [Entity] Hamburg, Germany 71 Fenchurch Street, London EC3M 4BS Working together for a safer world Lloyd s Register and variants of it are trading names of Lloyd s Register Group Limited, its subsidiaries and affiliates. Copyright Lloyd s Register [Entity]. EMEA A member of of the Lloyd s Register group.