Alternative Fuels and Energy Systems for Ferries

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Alternative Fuels and Energy Systems for Future Ships Pathways to 2050 Christos Chryssakis 21 March 2013

Outline  Alternative Fuels

 Hybrid Systems for Ships

 Pathways to 2050 for Low Carbon Shipping

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuel Options for Shipping

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Future Greenhouse Gas Emissions from Shipping

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Sulphur Emission Control Areas – 2015

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Motivation for Alternative Marine Fuels  Greenhouse Gas Emissions  Regulations: Pollutant Emissions  Oil Availability – Energy Security - Cost  Low Sulphur Fuels - In the ECAs (30-50 Mt/year today) - Globally after 2020 (or 2025) ( 300 Mt/year)

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Model Results – NOx, SOx Emissions  NOx, SOx emissions

 Scenarios considered: - No regulations - MARPOL regulations + With New Fuels + With CO2 abatement measures

 Implications: - Price of distillates to be increased after 2020 - LNG could become even more attractive - Other fuels can be introduced: - Biodiesel, LPG, DME, etc.

-85%

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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-70%

Emissions Reduction from Shipping

LNG

Biofuels Nuclear

Can reduce CO2 emissions by up to 25 % compared with bunker oil

Providing between 10 and 70 % lower CO2 lifecycle emissions

power – no GHG emissions but low public acceptance

Photo: Beluga group

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuel Options for Ferries 1. Liquefied Natural Gas (LNG) 2. Liquefied Petroleum Gas (LPG) 3. Methanol / Ethanol

 Physical & Chemical Characteristics

4. Di-Methyl Ether (DME)

 Production, Availability & Cost

5. Synthetic Fuels (Fischer-Tropsch)

 Applications & Current Status

6. Biodiesel

 Safety Considerations

7. Biogas

 Emissions & Environmental Impact

8. Hydrogen 9. Nuclear

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuels  Liquefied Natural Gas (LNG) - Very attractive for vessels in the ECAs - Expected to grow significantly in the next decade - Gas Engines, Dual-Fuel Engines - Issues with methane slip at low loads - Main Issue: Bunkering infrastructure - Feasibility studies in SE Asia - Facilities being developed in the North Sea, North America

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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38 LNG fuelled ships in operation worldwide Ships in operation Year 2000 2003 2003 2006 2007 2007 2007 2007 2008 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011

Type of vessel Car/passenger ferry PSV PSV Car/passenger ferry Car/passenger ferry Car/passenger ferry Car/passenger ferry Car/passenger ferry PSV PSV Car/passenger ferry Car/passenger ferry Car/passenger ferry Patrol vessel Car/passenger ferry Patrol vessel Car/passenger ferry Patrol vessel Car/passenger ferry Car/passenger ferry Car/passenger ferry PSV Chemical tanker Car/passenger ferry PSV

Owner Fjord1 Simon Møkster Eidesvik Fjord1 Fjord1 Fjord1 Fjord1 Fjord1 Eidesvik Shipping Eidesvik Shipping Tide Sjø Tide Sjø Tide Sjø Remøy Management Fjord1 Remøy Management Fjord1 Remøy Management Fjord1 Fjord1 Fosen Namsos Sjø DOF Tarbit Shipping Fjord1 Solstad Rederi

Class DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV GL DNV DNV

Year 2012 2012 2012 2012 2012 2012 2012 2012 2012 2012 2013 2013 2013

Type of vessel Car/passenger ferry PSV PSV PSV General Cargo PSV PSV Car/passenger ferry Car/passenger ferry Car/passenger ferry PSV RoPax Car/passenger ferry

Owner Fjord1 Eidesvik Olympic Shipping Island Offshore Nordnorsk Shipping Eidesvik Shipping Island Offshore Torghatten Nord Torghatten Nord Torghatten Nord REM Viking Line Torghatten Nord

Class DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV LR DNV

Updated 16.01.2013 Excluding LNG carriers and inland waterway vessels Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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30 confirmed LNG fuelled newbuilds Confirmed orderbook Year 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013

Type of vessel Harbor vessel High speed RoPax Ro-Ro Ro-Ro RoPax RoPax General Cargo Car/passenger ferry Car/passenger ferry Ro-Ro Ro-Ro Tug PSV PSV Patrol vessel Car/passenger ferry Tug Tug

Owner Incheon Port Authority Buquebus Sea-Cargo Sea-Cargo Fjordline Fjordline Eidsvaag Norled Norled Norlines Norlines Buksér & Berging Harvey Gulf Int. Marine Harvey Gulf Int. Marine Finish Border Guard Society of Quebec ferries CNOOC CNOOC

Class DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV DNV ABS ABS GL LR CCS CCS

Year 2014 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015

Type of vessel Car/passenger ferry Car/passenger ferry Tug PSV PSV Gas carrier Gas carrier PSV PSV PSV Container Ship Container Ship

Owner Society of Quebec ferries Society of Quebec ferries Buksér & Berging Harvey Gulf Int. Marine Harvey Gulf Int. Marine SABIC SABIC Remøy Shipping Siem Offshore Harvey Gulf Int. Marine TOTE Shipholdings TOTE Shipholdings

Class LR LR DNV ABS ABS BV BV DNV DNV ABS ABS ABS

25 20

Confirmed Orders Ships in Operation

15 10

5 0

Updated 16.01.2013 Excluding LNG carriers and inland waterway vessels Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuels  Liquefied Petroleum Gas (LPG) -

In use since 1912 Mixture of Propane & Butane Production: 270 Mt/year, increasing Safety: similar to LNG Uses: domestic, chemicals, agriculture MAN ME-GI: introduced in 2011 - Also runs on DME

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuels  Application of Methanol

 Methanol / Ethanol

- Stena Line: ferry operator in Scandinavia - Retrofitting one vessel for 2014

- Production: - Methanol: 50 Mt/year + 34 Mt excess capacity - Ethanol: 100 Mt/year

- Stena Germanica: RoPax - 300 cars, 1300 Passengers

- Scania in Sweden uses Ethanol with an additive to make it suitable for heavy duty Diesel engines - Possible to use in dual fuel engines - Safety: low flashpoint  safety requirements similar to LNG - Rules already exist for storage

- Plans for 25 more vessels up to 2018

- Under development for use as fuel

- Less toxic emissions than oil-based fuels

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuels  Biodiesel - Can be used in blends: B10, B50, …, B100 - In Europe: spare capacity of 11 Mt/year - Strict regulations on sustainability in the EU - Applications: - US Navy (algae-based fuels) - Maersk Line (30t Rapeseed oil, 30t algae-based) - Maersk: Involved in fuel development research programme

- Regulatory issues: - MARPOL Annex VI - ISO 8217:2010

- Cost: currently  10-20% more expensive than distillate fuels

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Biofuel Feedstocks Examples

Processing

Sugar Crops

Sugar Cane, Sugar Beet

Extract Saccharose and ferment to ethanol

Starch Crops

Corn, Wheat, Cassava

Hydrolyze enzymatically to sugar solution, then ferment

Pure Plant Oil

Palm, Soybean, Rapeseed, Sunflower

Transesterification to biodiesel

Waste Vegetable Oil

Cooking oil, Animal fat

Refinement, then transesterification

Lignocellulosic (inedible Waste (forestry, farm, municipal), Switchgrass, Miscanthus, Poplar plant material)

Break down lignin to reach sugar/starches

Jatropha

Nut crop with 27-40% inedible oil

Transesterification to biodiesel

Algae (Micro & Macro)

Diverse group, some up to 60% oil by dry weight

Transesterification to biodiesel or fermentation to ethanol

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Biofuel Production Potential Area [km2] for production of 50 M TOE

% of Arable Land*

Fuel Type

Sugar Cane (Brazil)

135,038

0.98%

Ethanol

Maize USA Miscanthus

197,152 118,310

1.43% 0.86%

Ethanol Ethanol

Palm Oil (Malaysia)

118,193

0.86%

Biodiesel

Algae

22,400

0.16%

Biodiesel

Feedstock

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Alternative Fuels  Biogas - Typical composition: -

Methane CO2 N2 H2 H2S O2

Methane CO2

50-80% 20-50% 0-10% 0-1% 0-3% Traces

N2 H2 H2S O2

- Production can be integrated in farms and food-processing facilities - Applications: heat generation, electricity production, substitute for LNG - Widely used in vehicles in Sweden and Norway - Can be used in LNG or Dual-Fuel engines by Wärtsilä, MAN, GE (from 100 kW to 9.5 MW)

- Same safety precautions as LNG

- It averts CH4, VOC emissions from farming, landfills Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Availability of Alternative Fuels Fuel

2010 Total consumption (million TOE/year)

Oil-based

Natural Gas

4,028*

2,858 (LNG: 250-300)

LPG

275

Methanol

23

Ethanol

58

DME

3-5

Fischer-Tropsch

15

Biodiesel

18-20

Biogas

Very low

Hydrogen

Very low

* Approximately 7-8% for shipping Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Sustainability and cost of Alternative Fuels  Well-to-Propeller CO2 Emissions - Tank-to-Propeller (combustion) emissions assumed to be equal to CO2 absorbed by the plant during its lifetime

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Hybrid Systems for Ships

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Hybrid System Architecture A low emission total hybrid energy system with energy storage.

AUXILIARIES

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

Benefits from Ship Hybridization  Running engines at optimum loads  Avoid transient loads  Use as power redundancy  Utilize energy from cold ironing

 Reduction of local emissions  Reduction of noise and vibrations  Facilitate energy harvesting

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Application: Small Ferry (i)

Main Engine Max. Power [kW] Aux. Engine Max. Power [kW] Battery Pack [kWhr] Total Installed Effect [kW]

Conventional 2×500

Hybrid 2×300

1×150

--

--

400

1150

1000

ME [kWh] (per avg. hour) AUX [kWh] (per avg. hour) Total [kWh] Fuel Consumption ME [lit./hr] Fuel Consumption AUX [lit./hr] Fuel Consumption Total [lit./hr] Installation Cost [$] Additional Cost of Hybrid [$] Fuel Savings/Year [tonnes] CO2, NOx, PM Emissions Savings/Year [kg/year] Fuel Savings/Year [$] Fuel Savings in 5 Years [$] Savings in 5 Years including Norwegian NOx Tax [$]

Conventional 240 64 304

72

61

0

21

72

82

760,000

575,000 185,000 45 CO2: 280,325 NOx:4,536 PM: 227 35,635 154,282 180,580

-12% fuel consumption

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

Hybrid 290 0 290

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Application: Small Ferry (ii) • Other Ferry Concepts • Diesel-Hybrid • Pure LNG • LNG-Hybrid • Pure Battery • High vs. Low Speed • 8 vs. 11 knots • Electricity Mix • Renewables vs. fossil fuel based

Return on Investment Return on Investment [Years]

10,0

8,0

6,0

8 knots ROI 8 knots ROI Nox Tax

4,0

11 knots ROI 11 knots ROI Nox Tax

2,0

0,0 Diesel Hybrid

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Pure LNG LNG Hybrid Pure Battery

Application: Small Ferry (iii) • Lifetime Expenses/Savings (8 knots ferry) • Diesel-Hybrid • Pure LNG • Assumptions (Const. Prices) • Fuel/Battery prices constant • Discount rate 5% • Assumptions (Best Case) • Fuel prices increasing 2% annually • Annual savings include the Norwegian NOx tax, in addition to fuel consumption savings. • The battery cost is assumed to drop by 30% every 15 years. • The capital cost of the hybrid/LNG system is reduced due to funding from the Norwegian NOx fund.

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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FellowSHIP III  Background - FellowSHIP I (2003-2005): Feasibility study and basic design for hybrid fuel cell pack - FellowSHIP II (2006-2010): Fuel Cell power pack integrated in a ship

 FellowSHIP III, 2011-2013 Development and integration of hybrid energy system Measurement program for fuel consumption, emissions Heat recovery system for fuel cell Modelling of hybrid system Develop DNV Rules for hybrid systems, batteries used for propulsion - Installation and testing of hybrid system on-board - Demonstrate effect of hybrid energy system -

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Pathways to 2050 For Low Carbon Shipping

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Future Greenhouse Gas Emissions from Shipping

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Potential for Emissions Reduction from Shipping - 2050

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Ship owner survey – motivation and barriers Main Motivation: Compliance and fuel efficiency Main Barriers: Cost and technology maturity

Main motivation

Main barriers

Source: DNV survey (23 respondents) Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Ship owner survey – investment preferences Investment horizon (payback requirements) and how much of the fuel cost is paid by the ship owner impact the cost-effectiveness of many measures

Source: DNV survey (23 respondents) Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Is it possible to reduce emissions?

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Selandia – first diesel powered ocean going vessel - 1912 Selandia had to bunker for a voyage from Europe to Singapore because no bunkering was available at that time. Building diesel-powered ships did not take place for another 20 years.

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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Safeguarding life, property and the environment www.dnv.com

Alternative Fuels and Energy Systems for Future Ships 21 March 2013 © Det Norske Veritas AS. All rights reserved.

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