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Green retrofit - opportunities and challenges from the suppliers’ point of view “Retrofitting Project”

Green retrofit - opportunities and challenges from the suppliers’ point of view “Retrofitting Project” By Michael Vihlmann Jensen, Technical Project Manager, Danish Maritime.

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Green retrofit - opportunities and challenges from the suppliers’ point of view “Retrofitting Project”

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  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 2011

  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 2011

  3. Retrofitting Project - background and objectivesThe 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 2011

  4. Retrofitting Project - background and objectivesThe 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 CO2, NOxand SOx can be achieved. Therefore, it is imperative to focus on retrofitting of the existing fleet. MARKIS Annual Conference 30. november 2011

  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 Replacement of a product with a newer version of the same product.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 2011

  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 MARKIS Annual Conference 30. november 2011

  7. World trade: Source: IMF MARKIS Annual Conference 30. november 2011

  8. Over-capacity Source: Trade & fleet – Clarksons Trade scenario - CESA MARKIS Annual Conference 30. november 2011

  9. Completed tonnage 2005 - 2010 no. of ships 3500 3000 2500 Others Japan 2000 South Korea China other Europa 1500 EU 1000 500 0 2005 2006 2007 2008 2009 2010 Completions : Source: CESA MARKIS Annual Conference 30. november 2011

  10. Shipyardcapacitycompared to deliveries Source: CESA MARKIS Annual Conference 30. november 2011

  11. Stricter limits for air pollution (MARPOL) timeline • 2010 max sulfur content in bunker fuel in ECA's 1 % (1.5 %) • 2011 TIER II, Global NOx 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, NOx 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, CO2 tax) • Ship recycling, Hong Kong Convention MARKIS Annual Conference 30. november 2011

  12. 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 MARKIS Annual Conference 30. november 2011

  13. Process and Timetable (1) Start-up phase Analysis phase Mappingphase The Danish Maritime FundFinancing of the project DemarcationFocus on retrofitting and maritime, environmentalchallenges Initial meetings with businesses& ownersMutual overview of common business and product areas Analysing- business opportunities- project opportunities- funding opportunities- matchmaking Establish- workshops- projects/working groups- development cooperation Identify and define Shipping industrykey environmental challenges Steering Group- sparring partner- maritime businesses- maritime organizations Mapping regulations- IMO and EU regulations- other authorities (U.S.) Monitoring Group - political initiatives Mapping existing environmenttally friendly solutions Project Manager Mapping the financing- funds & subsidies Dec‘10 – May ‘11 Jun ‘11 – Aug‘11+ Sept‘11 – Nov‘11+ MARKIS Annual Conference 30. november 2011

  14. Process and Timetable (2) Executing phase Executing phase (project 1) New projects 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 WorkshopSummary of analysis phase EstablishA working group for marketingof retrofitting solutions Workgroup (1)Joint marketing of retrofitting solutions - perform common case historiesPurpose:- meet market expectations- create a retrofitting catalog- highlight the added value- joint marketing initiatives- system solutions- package solutions Case 1: Container ship- shipowner 1- inspection on board- retrofitting catalog Case 2: Tanker - shipowner 2- inspection on board- retrofitting catalog Case 3: Offshore/supply- shipowner 3- inspection on board- retrofitting catalog Apr ‘12 – Jun ‘12 Jan ‘12 - Mar ‘12 Nov ‘11 - Dec ‘11 MARKIS Annual Conference 30. november 2011

  15. Retrofitting CatalogThe 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 shipownerseasy 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. MARKIS Annual Conference 30. november 2011

  16. Retrofitting CatalogContents: • Specific solutions • Investment • Payback period • Added value (vessel value) • Upgrade in-situ possible • Implementation • Life cycle management MARKIS Annual Conference 30. november 2011

  17. Target areas - retrofitting (1)1. Emissions (rule driven) • Fulfill requirements for sulfur content in fuel & related emissions of SOx • Fulfillment by using low sulfur fuel (MGO, LNG) • Fulfillment by using technology (EGC) • Fulfill requirements for emissions of NOX • Fulfillment by using technology (SCR, EGR, EGE) • Fulfillment by using LNG • General reduction of SOx, NOx, CO2, particulate matters, soot, VOC, GHG • Pretreatment of fuel (WIF, FWE) • Reduced fuel consumption (slow steaming, efficiency, operation) MARKIS Annual Conference 30. november 2011

  18. 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 & HVAC’s (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) MARKIS Annual Conference 30. november 2011

  19. Target areas - retrofitting (3) • 3. Operational Safety • Safe operation of ship engines and equipment (avoid downtime/breakdown, abrasivedegradationand accidents) • Use of MGO, HFO/MGO switch • Online/real time measurement of operation (engine performance, fuel consumption) • Monitoring, collection of data (documentation) MARKIS Annual Conference 30. november 2011

  20. 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, CO2, water mist systems, monitoring) • Treatment of ballast water, oily water and waste • 6. Alternative propulsion systems/ solutions / design and fuels MARKIS Annual Conference 30. november 2011

  21. More information: Michael Vihlmann Jensen Technical Project Manager Danish Maritime Amaliegade 33 B, 4. 1256 København K tel: +45 3313 2416 direct: +45 3345 4398 fax: +45 3311 1096 mvj@danskemaritime.dk www.danskemaritime.dk MARKIS Annual Conference 30. november 2011

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