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Alisdair Pettigrew,Managing Director,BLUE CommunicationsPublic Relations and Public Affairs - marine, energy and environment sectors
blue-comms.com
The Carbon War RoomOperation Shipping Efficiency
Self Funding Fuel Saving Clean Tech Finance in Shipping
Alisdair Pettigrew, Consultant and Senior Advisor, the CWR
Mare Forum, Istanbul, March 21st, 2013
The Carbon War Room
Source: McKinsey &Co Cost Curve (over-simplified by CWR)
All about the ROI: Shipping is no exception
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DNV’s Shipping Version….
TechnologyCWR - Dismantling
Market Barriers
CWR’s Model Ideal for Shipping
Technologies (& Measures) Not the Roadblock
Latest hull coatings (FP)9% CO2 reduction, >1000 vessels
Satellite weather routing8% CO2 reduction, >500 vessels
Waste heat recovery 12% CO2 reduction, 4 APMM+...
Sails / Wind7-15% CO2 reduction,
Trial on 2 vessels
Air Cavity7-15% CO2 reduction, Trial on 5 vessels
‘Veth-Z-Drive’ rudder propeller technology
‘Aquatanker’ uses solar wind sail and solar cell array technology.
Multi-Phase Approach
1. Solve for Information
2. Improve Demand Pull
3. Improve Capital Flows
Framing the Opportunity
SOLVING NFORMATION / TRANSPARENCY: ShippingEfficiency.org
»EEDI – What is it?
» Energy Efficiency Design Index (EEDI)
» A formula produced by the IMO to calculate the amount of CO2 emitted (in grams) by a vessel for every tonne of cargo carried a nautical mile based on:» Total engine power» Fuel type & specific fuel consumption» Cargo carrying capacity» Speed
EVDI™ – What is it?
Existing Vessel Design Index (EVDI™)
This formula produces the amount of CO2 emitted (in grams) by a vessel for every tonne of cargo carried a nautical mile based on:
Total engine powerFuel type & specific fuel consumptionCargo carrying capacitySpeed
Developed by RightShip based on the same assumption as the EEDI, this formula can be validly applied to existing vessels right now
More info…
More indices…
ApplesVersusApples!
Retrofits and UpgradesDropdown menu of retrofits and upgrades
Verification procedures ensure rating is an accurate reflection of reality
The Demand Pull: Charterers using A to G as a policy
The Demand Pull: Charterers using A to G as a policy
Incentives for clean tech investment are arising, but in this market – who pays?
CAPITAL FLOW / FINANCE MODELING: A Snapshot: Self Financing Fuel Saving Consortium
Financier (“high risk” initially)
Monitoring company
Propeller company
Hull Coating company
Vessel Owner
Fuel SavingEscrow Account
Bunker FuelProvider
SFFSCMembers (incl. Tech
co’s, owner(s), charterer's),
monitoring co., etc)
FinancialSurplus
Capital &InterestPayments
Payment to technology suppliers
Legal Charge / other rights Unsecured
Loan Agreement
Charterer's)
Performance guarantees
Technology partners
CashFuel
Use of ship Inclusive day rate
Structural Option A Example – “Financier funds Owner”
FuelSaving
GuaranteeAssignmentRights
Tech
Methodology and Monitoring: Key to Success
Fuel consumption (e.g. tpd)
Time in operation (e.g. days pa)
First dry dock
Monitoring continues
Monitoring begins
Apply an agreed long-term underlying deterioration trend
Estimate post-dock baseline from pre-dock data, extrapolated if necessary
Estimate the fuel saved over guarantee time (e.g. 1 year post drydock)
Why only now? Methodology and accurate data key
Good quality pre-drydock data!Metocean dataOperational data (speed, loaded/ballast, trim)
A ship with fairly standard operation (no long periods stationary pre or post docking, consistency in operating speeds)
Long time-series (e.g. preferably 10+ years) performance data for a number of similar ships to determine long-term deterioration trend
Good quality energy monitoring equipment (flow meters etc)
Time (money) for method refinement / data processing
3rd party quality control/data processing verification
Self Financing Fuel Saving Consortium
Example: A 10-year old VLCC: approaching 2nddrydock cycle three year project:
At a HFO cost of $700/ton & annual fuel cost of $17.2m
Minimum 8% fuel saving guarantee (from 1-3 technology providers)
$1.6m retrofit cost, $1.9m total cost (including insurance, consultancy and finance premium)
$1.8 savings per annum= 13 month payback
Remaining 23 months sees $3.45m “upside” fuel savings split between financier, owner / charterers, clean techs, consultants
