As the maritime industry’s quest for the best possible decarbonization solutions has intensified, wind propulsion systems are gaining traction around the globe. There are currently 30,000 ships in operation worldwide that could be equipped with wind-assisted ship propulsion (WASP) technology, Jukka Kuuskoski, Chief Sales Officer (CSO) at Norsepower Oy Ltd, estimated during the recent Wind Propulsion Open Mic event. In the case of newbuilds, this number is said to be much bigger. For reference, the number of ships in the world fleet that are larger than 1,000 GT currently stands at almost 54,000, according to UNCTAD data.
As explained, wind propulsion technology stakeholders are targeting vessels in operation and are focused more on retrofits than on newbuilds because, in the case of retrofits, there is a higher motivation to save money and fuel. The same conclusion was shared earlier this year by Gavin Allwright, Secretary-General at the International Windship Association (IWSA), who said that the roll-out of fleet-wide wind propulsion by 2050 could unlock $1 trillion in fuel savings.
In the short-term future, the regulatory environment will encompass the International Maritime Organization’s (IMO) incoming EEXI and CII regulations, the EU’s ‘Fit for 55’ proposals, the emissions trading schemes, and regionally-led environmental mandates.
Faced with an unprecedented challenge to decarbonize, the shipping sector needs to invest in new technologies that would ensure regulatory compliance but also have a favorable return on investment. “Shipowners are already seeing the requirement to invest in many different technologies. Wind propulsion used to be considered a ‘nice to have’ and now is one of the most talked about topics of the era,” Kris Fumberger, Sustainability Manager at RightShip, pointed out during Norsepower’s latest webinar Going Beyond Compliance.
“Numbers are demonstrating the efficiency and double-digit emissions and fuel savings are extremely significant.” Despite numerous benefits of wind propulsion technology, some shipowners still seem to be reluctant to retrofit their vessels with wind propulsion systems. Commenting on prospects for wider adoption of wind-powered ships during the Wind Propulsion Open Mic, Patrick Englebert, General Manager at PROPELWIND S.A.S., said: “What will happen in reality is a question of economics and credibility of using wind. It’s still too much perceived as unproven technology while it has been proven during 4 thousand – 5 thousand years and it was abandoned a hundred years ago. That’s a difficult threshold before people endorse wind propulsion.”
He added that today’s technology — such as Norsepower’s rotor sails, new routing and blockchain management — gives the new impulse. “In my opinion, wind for assistance or wind for main propulsion has been de-risked compared to one hundred years ago by management, assistance to propulsion…, ballast water management — all these technologies are there to push for the adoption and endorsement of this wind technology.”
According to him, building trust is a crucial aspect when it comes to the wider adoption of the WASP technology. “The barrier is not technological but more psychological one,” Englebert stressed. A new paper presented by hhx.blue has estimated the market for wind-assisted ship technologies to be at $2-5 billion. “If we consider 25-30% acceptance of the market with $1 million as average cost of installation, then we reach $6.5 to 7 billion of the total pie for the retrofits,” Orestis Schinas, Partner at hhx.blue said, adding that this is very encouraging for WASP technology providers.
There are two main points that need to be considered when talking about finance within the WASP context. The first one is securing (green) finance for wind system installations and the second is related to the fuel price. As explained by Schinas, higher fuel prices and higher carbon costs create better opportunities for financing and installing wind propulsion technology because shipowners recognize the higher motivation to save. This is especially the case with longer ocean voyages which pay off more.
Recently, Danish shipping giant Maersk ordered a new methanol-powered fleet of vessels and fuel costs are looking to be three or four times higher than previous fuel costs. “If these expensive carbon-neutral fuels are entering the market, there will be all possible methods taken to minimize the actual fuel consumption and in that stage, we will need mechanical sales and all other innovative green technologies which are entering the market market today,” Tuomas Riski, CEO of Norsepower, remarked during Norsepower’s Going beyond Compliance discussion.
A new fuel reality is starting to make wind-assisted propulsion more relevant. It is expected that future fuel prices and quantities of alternative fuels will directly impact the uptake of the WASP technology. Therefore, it remains to be seen will the fuel-centric future create the main competitive advantage for WASP technology.
Furthermore, Environmental, Social, and Governance (ESG) parameters will be one of the key factors for attracting capital. For investors, if a ship is cleaner than the competition and if the technology is viable, then it will attract capital, according to Schinas. Customers would also opt for ships and shipowners with good ESG performance.
In the coming years, more wind propulsion suppliers are expected to enter the market. As a result, more suppliers and the competition among them will bring the costs down. This would make shipowners more confident, Englebert concluded.
Naida Hakirevic Prevljak
This article was previously published on www.offshore-energy.biz