lloyd's register presentation to 1st blue shipping summit 2011
DESCRIPTION
Lloyd's Register's Ship Energy Manager, Dr Zabi Bazari, speaking to 1st Blue Shipping Summit in Athens today, highlighted the potentials for energy saving in shipping.His main message was that despite significant energy savings that can potentially be achieved, this may not be realisable if current shipping regulatory, legal and financial frameworks are not developed along the line to support the uptake of new technologies and processes.He argued that a robust regulatory framework together with enhanced contractual arrangement, between charterers and ship owners at one side to facilitate cost-benefit sharing from energy saving operation processes, and also between technology suppliers and ship owners on risk-benefit sharing arising from energy saving technologies are not being fully utilised yet.TRANSCRIPT
1
Ship Energy Management: Drivers and complexities
Dr Zabi Bazari CEng, CEnv
Ship Energy Services
Lloyd’s Register, London, UK
Content
How to reduce ship fuel consumption?
Main drivers?
Complexities?
11
22
33
44 The way forward?
55 Concluding remarks
2
How to reduce ship energy use / CO2 emissions?How to reduce ship energy use / CO2 emissions?
• Energy-efficient ship design.
• Larger ships and economy of scale
• Low carbon fuel (e.g. LNG)
• Slow steam
• Technology retrofit
• Operation optimisation• Just in time operation• Itinerary optimisation• Ship capacity utilisation• Trim optimisation / weather routing / etc.
• Technical optimisation• Hull maintenance• Diesel engine optimisation• Machinery usage minimisation
Drivers: Fuel costsDrivers: Fuel costs
• High and increasing fuel prices
• Sulphur regulations leading to increasing use of expensive:• Low sulphur fuel• Distillates
• Increased energy use due to future technologies:• SOx scrubbers• Ballast water treatment• NOx reduction devices
Fuel oil sulphur %
4.50
3.50
1.50
1.1.20121.1.2020
*1.1.202
5*
1.00
0.10
1.7.20101.1.2015
Inside ECA-SOx
Outside ECA-SOx
* 2020 date may be deferred to 2025 depending on outcome of a review of fuel availability to be completed 2018
Year
0.50
3
Drivers: IMO GHG (energy efficiency) regulationsDrivers: IMO GHG (energy efficiency) regulations
EEDIEEDI
IMO InitiativesIMO Initiatives
On GHG controlOn GHG control
EEOIEEOI
SEEMPSEEMP
Ship owner / operator
EEDI and SEEMP will become mandatoryEEDI and SEEMP will become mandatory
EEOI will remain voluntaryEEOI will remain voluntary
Shipyard
Drivers: IMO GHG’s Market Based Measures (MBMs)
e.g. STEEM(Ship Traffic, Energy and
Environmental Model)
Emissions Caps
Trading
Fuel Levy
Port or flag states
collect and control the
CO2 charges
Based on Ship Energy Efficiency
Rewards efficient ships
ETSETS(Emissions (Emissions
Trading System)Trading System)
LISLIS(Leveraged (Leveraged Incentive Incentive Scheme)Scheme)
OthersOthers
GHG FundGHG Fund
VESVES(Vessel (Vessel
Efficiency Efficiency System)System)
SECTSECT(Ship Efficiency (Ship Efficiency Trading System)Trading System)
Marine Marine MBMsMBMs
IMO is at early stages IMO is at early stages of discussion on of discussion on
MBMsMBMs
4
Complexities22
Owner
Yard as ship owner
Bank as ship owner
OwnerCharter
Charter as agent
Concept of ‘Shipping’
Operator – as owner or charter
Crewing Companies
Technical manager
Port State
Flag State
Concept of ‘Industry’
Refinery
Regulator
Complexities: Stakeholders and responsibilitiesComplexities: Stakeholders and responsibilities
Large number of stakeholders influence ship operationLarge number of stakeholders influence ship operation
5
Complexities: Stakeholders (IMO Guidelines on SEEMP)
Ship Energy Management Stakeholders
Ports
Ship Owner
Ship Operator
Ship Charterer
Cargo Owner
More coordination between stakeholders is required for energy efficiency
Complexities: Economics of ship operation
• Who pays for the fuel?• Charterers• Ship owners• Cargo owner• Etc.
• Who benefits from energy efficiency?
• Who pays for energy efficient technologies / operation processes?
The financial aspects of The financial aspects of ““ship energy savingship energy saving””, in terms of , in terms of costcost--benefit, is very complexbenefit, is very complex
6
Complexities: Measurement, monitoring, finacial and legal frameworks
• Fuel consumption measurement.
• Performance assessment & verification.
• Large number of energy-saving products with significant saving-level claims.
• Lack of financial-legal frameworks to reward energy efficient operation.
The way forward?22
7
Way forward: Regulatory regimeWay forward: Regulatory regime
• An EEDI regulatory framework that is truly representative of ship’s technical energy efficiency.
• Regulations on operational fuel consumption measurement, CO2 inventory and their verification.
• Making industry pay for CO2 emissions (MBM).
Way forward: Financial and legal frameworkWay forward: Financial and legal framework
• Upgrading of charter party contracts to enable / incentiviseenergy efficient operations.
• Development of risk-sharing contracts between technology supplier and owners for claims made for various technologies.
• Development of benefits-sharing practices on fuel savings; between owners/managers and charterers.
8
Conclusions
• There are a number of major drivers for ship energy efficiency.
• There are a number of major complexities within the industry that impedes move towards more energy efficient operation.
• Solutions to these complexities will pave the way for a more energy efficient shipping industry.
• The way forward should include:• A more robust regulatory framework.• A charter-party framework that rewards energy-efficient
operations.• A financial framework that give a shared cost/benefit to
stakeholders for uptake of new technologies or new operation processes.
Services are provided by members of the Lloyd's Register Group. For further information visit www.lr.org/entities
Thank YouThank You
For more information, please contact:
Dr. Zabi BazariShip Energy Services Manager
Environment - SMTLloyd’s Register71 Fenchurch StreetLondon, EC3M 4BS
T +44 (0)20 7423 1756E [email protected] www.lr.org/marine