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Green retrofit - opportunities and challenges from the suppliers point of view Retrofitting Project By Michael Vihlmann Jensen, Technical Project Manager,

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Presentation on theme: "Green retrofit - opportunities and challenges from the suppliers point of view Retrofitting Project By Michael Vihlmann Jensen, Technical Project Manager,"— Presentation transcript:

1 Green retrofit - opportunities and challenges from the suppliers point of view Retrofitting Project By Michael Vihlmann Jensen, Technical Project Manager, Danish Maritime MARKIS Annual Conference 30. november 20111

2 Danish Maritime is a trade organization formed in 1919 by Danish businesses within the fields of shipbuilding, maritime production, development, research and service. Our aim is to collectively safeguard the common interests of businesses in the Danish maritime industry. MARKIS Annual Conference 30. november 20112

3 Retrofitting Project - background and objectives The association's retrofitting project, made possible through support from The Danish Maritime Fund, intends to strengthen the Blue Denmark's ability to offer better and more environmentally and climate friendly products and technical solutions, and subsequent service in order to improve competitiveness. Requirements, regulations and increasing operating costs create a need for upgrading the existing fleet to maintain an economically profitable operation of ships and ensure that ships comply with the most stringent environmental regulations. MARKIS Annual Conference 30. november 20113

4 Retrofitting Project - background and objectives The existing fleet, including already contracted vessels and vessels to be delivered within the next few years, is historically high and will for years to come make up the majority of the world fleet. It is within the existing fleet that an immediate, significant reduction in the emissions of CO 2, NO x and SO x can be achieved. Therefore, it is imperative to focus on retrofitting of the existing fleet. MARKIS Annual Conference 30. november 20114

5 Definitions: Retrofit: Replacement of sub-systems on existing ships. Addition of new technology or features to older systems. Upgrade: Replacement or modification of complete systems. Replacement of a product with a newer version of the same product. Modernization: Replacement of equipment to a newer version. MARKIS Annual Conference 30. november 20115

6 6 Trends in world trade World economy growth is expected to slow down Trends in seaborne trade New contracts in 2007 at approx. 90 million cgt Significant drop to 16.6 million cgt in 2009 New contracts in 2010 increased to 38.6 million cgt (2,523 ships) Total seaborne trade is expected to increase over the next 20 years Existing fleet is approx. 100,000 ships in operation worldwide Until 2014 there will be a general overcapacity in transportation There will be a continued overcapacity of shipyards Souce: IHS Fairplay & CESA

7 Source: IMF MARKIS Annual Conference 30. november World trade:

8 Source: Trade & fleet – Clarksons Trade scenario - CESA Over-capacity MARKIS Annual Conference 30. november 20118

9 Source: CESA MARKIS Annual Conference 30. november Completions : Completed tonnage no. of ships Others Japan South Korea China other Europa EU

10 Source: CESA MARKIS Annual Conference 30. november Shipyard capacity compared to deliveries

11 MARKIS Annual Conference 30. november Stricter limits for air pollution (MARPOL) timeline 2010 max sulfur content in bunker fuel in ECA's 1 % (1.5 %) 2011 TIER II, Global NO x limit (reduction by approx. 20 %) 2012 maximum sulfur content in bunker fuel globally 3.5 % 2015 max sulfur content in bunker fuel in ECA's 0.1 % 2016 Tier III, NO x levels in ECA areas (reduction by approx. 80 %) 2020 maximum sulfur content in bunker fuel globally 0.5 % Other requirements: Treatment of ballast water and bilge water Market based measurements (EEDI, SEEMP, CO 2 tax) Ship recycling, Hong Kong Convention

12 MARKIS Annual Conference 30. november Challenges for the shipbuilding industry Shipbuilding industry affected by the financial crisis (2008) Compliance with the most stringent environmental regulations Increasing operating costs (bunker fuel prices) Fall in freight rates Fall in vessel values Increased fuel prices -> reduce energy consumption Fall in freight rates -> reduce operating costs Stricter environmental requirements -> reduce emissions Fall in vessel values -> loss of collateral for project financing

13 MARKIS Annual Conference 30. november Process and Timetable (1) Mapping regulations - IMO and EU regulations - other authorities (U.S.) Mapping existing environmenttally friendly solutions Dec 10 – May 11Jun 11 – Aug 11+Sept 11 – Nov 11+ The Danish Maritime Fund Financing of the project Mapping the financing - funds & subsidies Start-up phase Mapping phase Analysis phase Identify and define Shipping industry key environmental challenges Demarcation Focus on retrofitting and maritime, environmental challenges Initial meetings with businesses & owners Mutual overview of common business and product areas Analysing - business opportunities - project opportunities - funding opportunities - matchmaking Establish - workshops - projects/working groups - development cooperation Steering Group - sparring partner - maritime businesses - maritime organizations Monitoring Group - political initiatives Project Manager

14 Workgroup (1) Joint marketing of retrofitting solutions - perform common case histories Purpose: - meet market expectations - create a retrofitting catalog - highlight the added value - joint marketing initiatives - system solutions - package solutions MARKIS Annual Conference 30. november 2011 Executing phase Nov 11 - Dec 11Jan 12 - Mar 12 Apr 12 – Jun 12 Process and Timetable (2) Workshop Summary of analysis phase Establish A working group for marketing of retrofitting solutions Case 1: Container ship - shipowner 1 - inspection on board - retrofitting catalog Retrofitting catalog (dynamic) - investment packages - IT platform Define new projects - develop new solutions - new partnerships - new system solutions Search funds & research funds Marketing of new solutions 14 Executing phase (project 1)New projects Case 2: Tanker - shipowner 2 - inspection on board - retrofitting catalog Case 3: Offshore/supply - shipowner 3 - inspection on board - retrofitting catalog

15 MARKIS Annual Conference 30. november Retrofitting Catalog The Danish maritime equipment suppliers have a variety of products and services which include environmental friendly and economically efficient solutions. A Retrofitting Catalogue is a summary of investment packages that are economically attractive. It provides shipowners easy access to make the optimal decision for investment in environmentally friendly retrofitting solutions. Solutions which apply to specific regulatory requirements and ensure a future economically profitable operation of the ship.

16 MARKIS Annual Conference 30. november Retrofitting Catalog Contents: Specific solutions Investment Payback period Added value (vessel value) Upgrade in-situ possible Implementation Life cycle management

17 MARKIS Annual Conference 30. november Target areas - retrofitting (1) 1. Emissions (rule driven) Fulfill requirements for sulfur content in fuel & related emissions of SO x Fulfillment by using low sulfur fuel (MGO, LNG) Fulfillment by using technology (EGC) Fulfill requirements for emissions of NO X Fulfillment by using technology (SCR, EGR, EGE) Fulfillment by using LNG General reduction of SO x, NO x, CO 2, particulate matters, soot, VOC, GHG Pretreatment of fuel (WIF, FWE) Reduced fuel consumption (slow steaming, efficiency, operation)

18 MARKIS Annual Conference 30. november Target areas - retrofitting (2) 2. Energy optimization/optimized operation Ensure economically profitable and efficient operation of ships Minimum energy consumption - maximum efficiency - no waste (LEAN) Efficient engines & HVACs (fans, pumps, cooling systems) Efficient propulsion systems Optimized power and energy management Online/real time measurement of operations (engine performance, fuel consumption) IT systems, decision support systems, Dynamic Route Planning, Fleet Management Hydraulic friction (fouling, design flow)

19 MARKIS Annual Conference 30. november Target areas - retrofitting (3) 3. Operational Safety Safe operation of ship engines and equipment (avoid downtime/breakdown, abrasive degradation and accidents) Use of MGO, HFO/MGO switch Online/real time measurement of operation (engine performance, fuel consumption) Monitoring, collection of data (documentation)

20 MARKIS Annual Conference 30. november Target areas - retrofitting (4) 4. Recovery Waste Heat Recovery (WHR), heat exchangers, Exhaust Gas Economizer (EGE) Vapor recovery (gases) from the cargo Ship recycling and component reuse 5. Safety and Environment (rule driven) Fulfill requirements for safety and environment (SOLAS & MARPOL) Personal safety (noise, vibration, work injuries, chemicals, fire) Fire (accommodation areas, engine room, CO 2, water mist systems, monitoring) Treatment of ballast water, oily water and waste 6. Alternative propulsion systems/ solutions / design and fuels

21 MARKIS Annual Conference 30. november More information: Michael Vihlmann Jensen Technical Project Manager Danish Maritime Amaliegade 33 B, København K tel: direct: fax:


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