DUAL FUEL ENGINES LATEST DEVELOPMENTS

DUAL FUEL ENGINES LATEST DEVELOPMENTS Oskar Levander, Director, Concept design, MLS HAMBURG, 27.9.2011 1 Wärtsilä 27 September 2011 Oskar Levander

Content Environmental and market drivers LNG as a marine fuel DF engines RoRo concept design Machinery and fuel comparison Conclusions 2 Wärtsilä 27 September 2011 Oskar Levander

Factor trends: Environment LOCAL LOCAL NO x Acid rains Tier II (2011) Tier III (2016) SO x Acid rains Sulphur content in fuel LOCAL GLOBAL Particulate matter Direct impact on humans Locally regulated CO 2 Greenhouse effect Under evaluation by IMO 3 Wärtsilä 27 September 2011 Oskar Levander

Until now.. 4 Wärtsilä 27 September 2011 Oskar Levander

From now on. Established Emissions Controlled Areas Emissions Controlled Areas under consideration 5 Wärtsilä 27 September 2011 Oskar Levander

NOx reduction IMO requirements and methods Specific NO x emissions (g/kwh) 18 16 14 12 10 Dry methods (engine optimization) - Concepts are ready Tier I (present) Ships built 2000 onwards Engines > 130 kw Retrofit: Ships built 1990 2000 Engines > 90 litres/cylinder and > 5000 kw Wärtsilä: RTA, W46, W64 8 6 4 2 0 - SCR Catalyst - Alternative pathways under investigation (Combined measures) 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Rated engine speed (rpm) Tier II (global 2011) Ships keel laid 2011 onwards Engines > 130 kw Tier III (ECAs 2016) Ships in designated areas, keel laid 2016 onwards Engines > 130 kw 6 Wärtsilä 27 September 2011 Oskar Levander

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 IMO Sulphur Limits 4,5% 3,5% World 1,5% 1,0% 0,5% 0,1% ECA EU in ports 7 Wärtsilä 27 September 2011 Oskar Levander

Machinery options Main options for operations inside ECA MGO + SCR HFO + Scrubber + SCR LNG 8 Wärtsilä 27 September 2011 Oskar Levander

Greenhouse emission reductions The society is demanding lower CO 2 emissions from ships IMO is trying to respond the demand by introducing guidelines for: Energy Efficiency Design Index (EEDI) Energy Efficiency Operational Index (EEOI) Market based instruments 9 Wärtsilä 27 September 2011 Oskar Levander

USD/MBtu Fuel prices 35 LNG Japan average [USD/MBtu] 30 NG Henry hub [USD/MBtu] 25 20 15 10 5 0 Oct-01 Feb-02 Jun-02 HFO 380cst Rotterdam [USD/MBtu] MGO Rotterdam [USD/MBtu] Sources: www.lngoneworld.com, www.bunkerworld.com, LR Fairplay 10 Wärtsilä 27 September 2011 Oskar Levander Oct-02 Feb-03 Jun-03 Oct-03 Feb-04 Jun-04 Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11

Cleaner Exhaust Emissions with LNG 25-30% lower CO 2 Thanks to low carbon to hydrogen ratio of fuel 85% lower NO X Lean burn concept (high air-fuel ratio) No SO X emissions Sulphur is removed from fuel when liquefied Very low particulate emissions No visible smoke No sludge deposits 11 Wärtsilä 27 September 2011 Oskar Levander

12 Wärtsilä 27 September 2011 Oskar Levander DF ENGINES

Otto or Diesel cycles: effects on NO X Nikolaus August Otto Rudolf Christian Karl Diesel Flame front propagation Fuel spray NO X formation 13 Wärtsilä 27 September 2011

Otto or Diesel cycles: effects on NO X Big temperature difference NOx formation! Diesel, max flame temp. Otto, max flame temp. 14 Wärtsilä 27 September 2011

Select the right technology * * * ** * * DUAL-FUEL (DF) Meets IMO Tier III GAS INJECTION * * * * ** * * GAS INJECTION SPARK-IGNITION GAS (SG) Meets IMO Tier III No redundancy No HFO flexibility * * GAS-DIESEL (GD) Does NOT meet IMO Tier III High gas pressure GAS INJECTION 15 Wärtsilä 27 September 2011 Oskar Levander

Gas burning technologies GAS-DIESEL (GD) DUAL- FUEL (DF) 1987 1992 1995 SPARK-IGNITION GAS (SG) 16 Wärtsilä 27 September 2011 Oskar Levander

The marine favourite technology? * * * ** * * DUAL-FUEL (DF) Meets IMO Tier III GAS INJECTION * * * * ** * * GAS INJECTION SPARK-IGNITION GAS (SG) Meets IMO Tier III No redundancy No HFO flexibility * * GAS-DIESEL (GD) Does NOT meet IMO Tier III High gas pressure GAS INJECTION 17 Wärtsilä 27 September 2011 Oskar Levander

Wärtsilä s choice * * * ** * * DUAL-FUEL (DF) Meets IMO Tier III GAS INJECTION 1 IMO Tier III compliant 2 Low pressure gas 3 Fuel flexibility; GAS, MDO and HFO 18 Wärtsilä 27 September 2011 Oskar Levander

Dual-fuel engine characteristics High efficiency Low gas pressure Low emissions, due to: High efficiency Clean fuel Lean burn combustion Fuel flexibility Gas mode Diesel mode Three engine models Wärtsilä 20DF Wärtsilä 34DF Wärtsilä 50DF 19 Wärtsilä 27 September 2011 Oskar Levander

Dual-fuel engine range 20DF 6L20DF 8L20DF 9L20DF 1.0 MW 1.4 MW 1.5 MW 34DF 6L34DF 9L34DF 12V34DF 2.7 MW 4.0 MW 5.4 MW 16V34DF 7.2 MW 20V34DF 9.0 MW 50DF 6L50DF 5.85 MW Higher output for 60Hz / Main engines 8L50DF 7.8 MW 9L50DF 8.8 MW 12V50DF 11.7 MW 16V50DF 15.6 MW 18V50DF 17.55 MW 20 Wärtsilä 27 September 2011 Oskar Levander 0 5 10 15

Wärtsilä successfully tests new 2-stroke dual-fuel gas engine technology Wärtsilä Corporation, Trade & Technical press release, 23 September 2011: Wärtsilä successfully tests new 2-stroke dual-fuel gas engine technology to comply with IMO Tier III emission limits The on-going tests show that the Wärtsilä 2-stroke gas engine performance is in compliance with the upcoming IMO Tier III NOx emission limits, thereby setting a new benchmark for low-speed engines running on gas. 21 Wärtsilä 27 September 2011 Oskar Levander

Dual-Fuel advantages Main advantages of the Dual-Fuel 4-stroke engine compared to SG: Redundancy, backup without interruptions in power or speed. Able to operate on liquid fuel outside ECA-area (incl HFO) Simple system, no PTI/ take me home or double gas system needed. Vessel re-routing possible, gas supply not a limitation 22 Wärtsilä 27 September 2011 Oskar Levander

Dual-Fuel applications References Power Plants Merchant Offshore Cruise and Ferry Navy DF Power Plant 49 installations 155 engines Online since1997 LNGC 68 vessels 254 engines 950 000 rh Conversion 1 Chem. Tanker 2 engines conv. Complete gas train Complete design PSVs/FPSOs 22 vessels 78 engines Online from 1994 LNG ferries 1+1 vessels 4 engines per vessels Complete gas train 2800 passengers In service in 2013 Costal Patrol Coming 4 segments 140 installations > 3 000 000 running hours 23 Wärtsilä 27 September 2011 Oskar Levander

Viking Line 2800 Pax Cruise Ferry The industry's most environmentally sound and energy efficient large passenger vessel to date. Main particulars: Overall length: 214.0 m Breadth, moulded: 31.8 m Cruising speed 22 knots Passengers: 2800 Class: LR Ice class: 1A In service: 2013 Shipyard: STX Finland Oy Ship Owner: Viking Line Machinery: Main Engines: Output: 4 x Wärtsilä 8L50DF 4 x 7600 kw LNGPac 200 2 x 200 m3 Integrated tank and aux. rooms Bunkering system, Safety systems GVU in enclosure Cold recovery for HVAC 24 Wärtsilä 27 September 2011 Oskar Levander

Conversion of Bit Viking 25 Wärtsilä 27 September 2011 Oskar Levander

Conversion of Bit Viking 26 Wärtsilä 27 September 2011 Oskar Levander

LNGpac Main Components Pressure build up evaporator Bunkering line, insulated pipes Main Engine Room Gas Valve Tank room Bunkering Station GVU Water/Glycol system Bottom tank filling LNG gas evaporator 27 Wärtsilä 27 September 2011 Oskar Levander

Gas Valve Unit in enclosure Main features Can be located in the same engine room, dedicated compartment not needed Compact design and easy installation (plug-and-play concept) Integrated ventilation system when combined with LNGPac 28 Wärtsilä 27 September 2011 Oskar Levander

LNGPac: A turn key solution Auxiliary equipment room Tank room All cryogenic valves Length minimized 29 Wärtsilä 27 September 2011 Oskar Levander

LNGPac 30 Wärtsilä 27 September 2011 Oskar Levander

LNG storage Storage volume (Relative) 4,5 4,0 Volume relative to MDO in DE 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 Diesel LNG (10bar) Fuel Tank Tank Room 31 Wärtsilä 27 September 2011 Oskar Levander

Conventional tank location 32 Wärtsilä 27 September 2011 Oskar Levander

LNG tanks located outside The LNG tanks can be located outside Does not take up space inside ship Good ventilation No ventilation casing needed trough accommodation Visible location for good PR 33 Wärtsilä 27 September 2011 Oskar Levander

LNG storage in trailers 34 Wärtsilä 27 September 2011 Oskar Levander

LNG distribution chain LNG logistics is a key question for introduction of LNG as a marine fuel LNG Terminal LNG Feeder LNG Container feeder LNG Ferry LNG Ro-Lo LNG Tug 35 Wärtsilä 27 September 2011 Oskar Levander

Marine LNG terminals Existing or under construction Proposed As per September 2009 36 Wärtsilä 27 September 2011 Oskar Levander

Bunkering from LNG truck 37 Wärtsilä 27 September 2011 Oskar Levander

LNG bunker barge/tanker 38 Wärtsilä 27 September 2011 Oskar Levander

LNG barge carrier operation principle 39 Wärtsilä 27 September 2011 Oskar Levander

LNG barge carrier operation principle 40 Wärtsilä 27 September 2011 Oskar Levander

LNG distribution NG pipe line Large scale LNG liquefaction plant / LNG import terminal PORT DISTRIBUTION Local LNG liquefaction plant LNG LNG tank in port Local distribution LNG terminal LNG tank on barge Small ships Small & large ships 41 Wärtsilä 27 September 2011 Oskar Levander

Total Concept Optimization Wärtsilä engineers solutions for LNG delivery, storage, transportation and utilization onboard. 42 Wärtsilä 27 September 2011 Oskar Levander

RORO CONCEPT FOR ECA 43 Wärtsilä 27 September 2011 Oskar Levander

RoRo trends 44 Wärtsilä 27 September 2011 Oskar Levander

RoRo trends Growing capacity Efficiency of scale Slowing down Reducing fuel costs Flexible cargo intake Designed for operation inside ECA areas 45 Wärtsilä 27 September 2011 Oskar Levander

RoRo concept RoRo vessel for European routes in ECA Operation area: European SECA area RoRo cargos Double stack containers on main deck Trailers and mafis on upper deck and in lower hold Containers on upper deck Focus on environmental and economical performance Operation inside SECA area IMO tier III NOx compliant 46 Wärtsilä 27 September 2011 Oskar Levander

RoRo main particulars Size 22 000 GT Length 190.0 m Length, bp 180.0 m Beam, wl 26.6 m Draft (design) 6.5 m Depth, main deck 8.3 m Speed, service ~19 knots (incl. 15% SM) Lane meters 2 800 m Deadweight (desgin) 10 500 tons Propulsion power 10 800 11 400 kw (installed) Aux power ~2 100 kw (installed) Drivers 12 pax 47 Wärtsilä 27 September 2011 Oskar Levander

Propulsion Single screw Simple and well proven Good ice performance Low cost Energopac rudder 48 Wärtsilä 27 September 2011 Oskar Levander

Machinery alternatives for comparison 1. MGO Operates on MGO SCR to reduce NOx to tier III limit MDO HFO 2. HFO + Scrubber Operates on HFO Scrubber removes SOx SCR to reduce NOx to tier III limit MDO HFO 3. DF - LNG Operates on LNG No exhaust cleaning needed MDO LNG 49 Wärtsilä 27 September 2011 Oskar Levander

MGO Installed propulsion power: Installed aux power: 10.8 MW 2.1 MW SCR needed for IMO tier III compliance SCR SCR SCR EnergoPac rudder 9L46F 10 800 kw Auxpac 1 050 kw 6L20 G PTO 3 MW GEAR 9L46F Auxpac 1 050 kw 6L20 G MSB 1 MW 2 x 1 MW MDO 50 Wärtsilä 27 September 2011 Oskar Levander

HFO + Scrubber Installed propulsion power: Installed aux power: 10.8 MW 2.1 MW SCRUBBER SCR needed for IMO tier III compliance SCR SCR SCR EnergoPac rudder 10 800 kw Auxpac 1 050 kw 6L20 G PTO 3 MW GEAR 9L46F Auxpac 1 050 kw 6L20 G MSB 1 MW 2 x 1 MW MDO HFO 51 Wärtsilä 27 September 2011 Oskar Levander

Marine Fresh Water Scrubber System Closed loop works with freshwater, to which NaOH is added for the neutralization of SOx. ph Exhaust Gas CLOSED LOOP = Zero discharge in enclosed area NaOH unit ph Scrubber Fresh water Water Treatment Cooling Process tank Holding tank Seawater Sludge tank 52 Wärtsilä 27 September 2011 Oskar Levander

Containerships VII - scrubber installation 53 Wärtsilä 27 September 2011 Oskar Levander

DF - LNG Installed propulsion power: Installed aux power: 11.4 MW 2.1 MW 6L20DF EnergoPac rudder 11 400 kw 1 056 kw 6L20DF G GEAR 12V50DF PTO 3 MW 6L20DF 6L20DF G 1 056 kw MSB 1 MW 2 x 1 MW MDO L N G 54 Wärtsilä 27 September 2011 Oskar Levander

LNG storage in trailers 3 x LNG trailers = 150 m3 of LNG 55 Wärtsilä 27 September 2011 Oskar Levander

LNG tank capacity (LNG trucks on deck) Target for autonomy 2 days Daily consumption (acc. to profile) 19 tons Total consumption 38 tons 84 m 3 + 15% Margin + 13 m 3 Total tank capacity demand 97 m 3 Volume capacity of one truck 50 m 3 Two LNG trucks loaded every second day 56 Wärtsilä 27 September 2011 Oskar Levander

LNG storage in trailer 57 Wärtsilä 27 September 2011 Oskar Levander

Assumed fuel prices USD/ton EUR/ton USD/MBtu HFO 635 455 16.5 MGO 950 680 23.4 LNG 740 530 16.0 For reference: NG market price in US: <5 $/MBTU Source: www.bunkerworld.com (September 2011), LNG price estimated 1 EUR = 1.4 USD 58 Wärtsilä 27 September 2011 Oskar Levander

Running hours Operation profile 60% 50% 40% 30% 20% 10% 0% Port Man 12,0 18,5 Operation mode 59 Wärtsilä 27 September 2011 Oskar Levander

Annual fuel consumption and cost (relative) 120 % 100,0 % 100,0 % Energy consumption 105,4 % Fuel cost 100,6 % 100 % 80 % 77,1 % 68,8 % 60 % 40 % 20 % 0 % MGO HFO + Scrubber LNG 60 Wärtsilä 27 September 2011 Oskar Levander

Annual fuel, lube oil and consumables cost (k ) 10 years 6% interest 6.000 5.000 4.000 Senitec chemicals Fresh Water NaOH 3.000 Urea 2.000 Lube oil Fuel 1.000 0 MGO HFO + Scrubber LNG 61 Wärtsilä 27 September 2011 Oskar Levander

Machinery first cost Machinery Investment cost 12.000 Scrubbers 10.000 SCR 8.000 Fuel system (LNG tank etc.) 6.000 HFO system Steering 4.000 Propulsion train 2.000 0 MGO HFO + Scrubber LNG Engines Propulsion engine 62 Wärtsilä 27 September 2011 Oskar Levander

Annual machinery related cost [keur] Annual machinery cost 8000 7000 6000 Scrubber operating costs (NaOH + FW + Senitec Chem) SCR operating costs 5000 Maintenance costs 4000 3000 Lubrication oil costs Fuel costs 2000 1000 Annual capital costs 0 MGO HFO + Scrubber LNG 63 Wärtsilä 27 September 2011 Oskar Levander

Payback Time [Years] Concept payback time (compared to MGO) 3,5 3 2,5 2 1,5 1 0,5 0 MGO HFO + Scrubber LNG 64 Wärtsilä 27 September 2011 Oskar Levander

Net Present Value [keur] Net present value (NPV) 10 years of operation 12000 10000 8000 6000 4000 2000 0 MGO HFO + Scrubber LNG 65 Wärtsilä 27 September 2011 Oskar Levander

Exhaust emissions 120 % CO2 NOx SOx 100 % 80 % 60 % 40 % 20 % 0 % HFO - IMO tier II MGO HFO + Scrubber LNG REF. outside ECA Inside ECA, IMO tier III compliant 66 Wärtsilä 27 September 2011 Oskar Levander

IMO Energy Efficiency Design Index (EEDI) 67 Wärtsilä 27 September 2011 Oskar Levander

EEDI 25 20 15 10 5 0 MGO HFO + Scrubber LNG 68 Wärtsilä 27 September 2011 Oskar Levander

Operating part time in SECA 69 Wärtsilä 27 September 2011 Oskar Levander

Machinery alternatives for comparison part time in ECA 1. MGO - HFO Operates on MGO inside SECA and HFO outside SECA SCR used only in port and inside NECA MDO HFO 2. HFO + Scrubber Operates on HFO Scrubber only used inside SECA SCR used only in port and inside NECA MDO HFO 3. DF - LNG Operates on LNG all the time No exhaust cleaning needed MDO LNG 70 Wärtsilä 27 September 2011 Oskar Levander

Annual costs [k ] Annual costs [k ] Annual fuel costs part time in ECA Inside ECA Outside ECA 33% 6.000 100% 6.000 67% 5.000 5.000 4.000 4.000 3.000 3.000 2.000 2.000 1.000 1.000 0 HFO - MGO HFO + Scrubber DF-LNG 0 HFO - MGO HFO + Scrubber DF-LNG 33% 6.000 67% 6.000 100% 5.000 5.000 4.000 4.000 3.000 3.000 2.000 2.000 1.000 1.000 0 HFO - MGO HFO + Scrubber DF-LNG 0 HFO - MGO HFO + Scrubber DF-LNG 71 Wärtsilä 27 September 2011 Oskar Levander

Annual costs [k ] Annual costs [k ] Annual costs part time in ECA Inside ECA Outside ECA 33% 8.000 100% 8.000 67% SCR operating costs 6.000 4.000 6.000 4.000 Scrubber operating costs Maintenance costs Lubrication oil costs 2.000 2.000 Fuel costs 0 HFO - MGO HFO + Scrubber DF-LNG 0 HFO - MGO HFO + Scrubber DF-LNG Annual capital costs 33% 8.000 67% 8.000 100% SCR operating costs 6.000 4.000 2.000 6.000 4.000 2.000 Scrubber operating costs Maintenance costs Lubrication oil costs Fuel costs 0 HFO - MGO HFO + Scrubber DF-LNG 0 HFO - MGO HFO + Scrubber DF-LNG Annual capital costs 72 Wärtsilä 27 September 2011 Oskar Levander

Conclusions DF engines a well proven technology DF engines running on LNG has great potential Best NPV Lowest emissions Short payback time 73 Wärtsilä 27 September 2011 Oskar Levander