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Energy, the real Cost

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What are shipowners’ social responsibility toward climate change and greenhouse gas (GHG) emissions? If businesses and governments do not rise to the challenge, how can society achieve its reduction goals?

Presently, there are financial assistance programs in the Province of Québec that are aimed at reducing GHG emissions. However, the Québec government’s program only extends to March 31, 2017. Consequently, there isn’t much time left to act.  

Consuming fossil fuel is not without consequence. Atmospheric pollution affects the quality of the air that we breathe and disrupts the chemical composition of the oceans. Despite the fact that maritime transport is a very efficient means of transportation, ships nonetheless produce significant quantities of GHGs.

Our industry’s social responsibility goes beyond the concepts of sustainable development and respect for the environment. It positions the maritime industry as a major societal player entrusted with responsibilities, values, privileges and rights.

Shipowners form part of society and depend on it for their existence. Consequently, they have obligations that stem from this privilege.

Additionally, as members of society, they have a social responsibility to contribute positively to the health of the community and the environment.

To what extent does profit seeking justify not putting in any effort to ensure that our ships burn fuel as efficiently as possible?

These resources, which are both non-renewable and harmful to the environment, require that we at least determine where and how they are used on our ships, whether old or new. Once their energy consumers are measured and quantified, it becomes possible to make appropriate decisions, adjust operating procedures or initiate small-scale projects that benefit the environment and your finances. The energy audit is an indispensable tool in that process.

For the majority of people wishing to do their part in reducing their carbon footprint, it is difficult for them to do so in a meaningful way. Even if they deploy all their efforts, it is rare that a single family can reduce its GHG emissions by more than two tons per year.

We often point out to ship captains that, what a Canadian family can achieve in a year, they can accomplish in a single trip.

By virtue of their capabilities, seafarers and shipowners have a social responsibility toward climate change.

These capabilities also come with a responsibility to do what is needed to help our society achieve its goals.

Simple Return on Investment The Trap Inherent In this Approach To Calculating a Project’s Cost-effectiveness

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Many managers use the simple return on investment (ROI) method of calculating the cost-effectiveness of a project. The formula, as its name indicates, is simple: one only has to divide the cost of the project by its projected savings. A project costing $50,000 and saving $15,000 per year in fuel costs will result in a simple ROI of 2.97, i.e. a nearly 3 year payback.

Many companies use this formula to determine the cost-effectiveness of a project. If the resulting ROI is greater than one or two years, the project will not be greenlighted.  In the example above, the project risks not going ahead.

This simple calculation was somewhat reliable when bank interest rates hovered around 12% but, today, a 7% rate is regarded as very attractive.

In the current context, allocating money to a project implies doing a more detailed study of its cost-effectiveness.

Take the example of the $50,000 above. If that money is invested in a bank instrument bearing 7% interest (which is highly optimistic), it will earn $20,127 after 5 years.

If that money is invested in a project that results in $15,000 in savings per year over 5 years, the payoff will be $31,630 and the business will be richer by $11,502. However, the project at first does not meet the criteria for calculating simple ROI.

The above amount represents the net present value of the project, commonly referred to as its NPV. The project’s NPV is therefore $11,502, which is equivalent to a return of 15.2%. No investment today offers that high a rate of return.

In the current context, what manager can afford to leave that kind of money on the table? Is return on invested capital not the foundation of any business?

Actually, despite the relatively low price of fuel, energy efficiency projects continue to be very cost-effective when properly evaluated, and they will be even more so in the future. Investing today will ensure significant gains in the years to come.

The price of fuel will increase as we move forward; the process has already begun. If, according to estimates, its price increases by 4% per year over the next 5 years (it rose by nearly 40% from February 2016 to today), the resulting gain using the above example will be $16,225, for a yield of 18.4%

If one adds the potential subsidy by the Government of Québec for reducing greenhouse gases, the return rises to 56% and the NPV exceeds $41,000.

Not bad for a $50,000 investment…

Given such a return, borrowing to invest in energy efficiency becomes an option worth considering.

Energy efficiency projects should be examined and analyze with care. They offer interesting possibilities for all types of ships.

For a reliable and cost-effective study of your project, call the experts at GHGES.

A project that provides a ROI of 2.94 years and a yield of 18.4% should not be approved without first being adequately evaluated.

 

No time, no resources and no money

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No Time, No Human Resources, No Money

We are all aware that we should be actively involved in reducing greenhouse gases (GHGs). It’s our social responsibility. As ship operators, we have the power to act and make a difference. Most people that we encounter on the street do not have that capability. But we do and, with it, comes a responsibility to do something.

The problem is not one of possibilities but of means: no time, no human resources and no money.

No Time:

Our employees are usually assigned a range of tasks that take up most of their time. Increasing their work load is often difficult, if not impossible. Hiring additional staff increases overhead costs which usually doesn’t sit well with investors.

Hiring qualified experts on a contractual basis is therefore the best solution.

No Human Resources:

There is no getting around the fact that reducing GHGs on a ship is achieved through energy efficiency. While this may be widely recognized, implementing such a change is not as simple as it would appear.

It requires people with specific skills and years of experience on numerous sites. Before implementing measures to reduce GHGs, a ship’s energy balance must be determined. Every component of its facilities must be measured using a number of instruments, and a study of its operating practices must be carried out. Every ship is different. Even similarly built ships often have different features.

The range of specialized equipment needed to perform these evaluations are not part of the tools usually used on a ship. Very few shipowners would want to spend tens of thousands of dollars on such instruments, especially if their personnel are not qualified to use them. 

We all aware of how complicated it can be to hire a contractor who is unfamiliar with ships. Doing business with certified and experienced chief engineers is clearly worthwhile. 

Here again, hiring qualified experts who have their own instruments is the best solution.  

No Money:

The advantage of setting up an energy efficiency program is that it pays for itself, a fact that has been demonstrated many times over. Indeed, even when the price of fuel is relatively low, there are always approaches or projects that can result in very attractive paybacks.

In the field of energy efficiency consulting on land, many firms finance their projects through the savings they generate. And that, even when the price of electricity is as low as 0.10$/kWh (hydro).

For example, a system that automatically reduces energy consumption on a ship by the equivalent of 25kW can easily generate a 14% return over 5 years, even when the price of HFO is $350 per ton.

This yield rises to 50% over 5 years with a PETMAF subsidy. With that kind of return, even borrowing from a bank at 8% becomes advantageous.

Currently, there are no investments that can earn as high a yield. Energy efficiency on a ship should therefore not be seen as an expense but as an investment, especially given the fact that the price of fuel will only rise in the future.

Under these circumstances, the case for not having any money does not hold up.

The stake here is not so much the cost-effectiveness of the projects, but the solutions that are available to the shipowner to reduce his GHG emissions.

Contact us for more details on how GHGES Marine Solutions can help you reduce your GHG emissions, improve your operations, and lower your fuel costs.

 

 

 

 

 

 

 

Bigger Is Not Better

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Bigger Is Not Better…It’s Worse!

 

The design of a ship must necessarily be supervised by a classification society. The design criteria are dictated by standards aimed at ensuring the safety of seafarers and achieving optimal performance under the worst prevailing conditions.

The equipment is selected in order to enable the ship to operate at full power under these conditions. But, what about the day-t0-day operating conditions?

It’s obvious that the equipment is oversized. Yet, one of the foundations of energy efficiency is selecting equipment based on actual needs.

How can the standards be met and the ship still be energy efficient? A different design approach must be used right from the start.

When this is not possible, such as when the ship is already in operation, its existing design must be re-examined, and energy-intensive systems and components must be modified while still remaining in compliance with the standards and approval requirements of the classifications societies.

 

Redundancy

For obvious reasons, essential equipment on a ship must come in pairs.  The problem then arises that the ship is fitted with two pieces of equipment that are already twice too large. For example, it would be more advantageous to install 3 pumps having 50% required capacity design than installing 2 pumps having 100% of the capacity. Redundancy is maintained and, with the addition of a variable speed drive on one of them, flow rates can be adjusted in accordance with actual requirements.

An oversized generator will see its specific consumption significantly increased if it is operated at less than 50% of its rated power. Even more of a concern with large equipment are the maintenance costs.

Among the large producers of energy (utilities), it is well known that the economic profitability of a generating station is based on being able to produce the maximum amount of energy with the equipment in place. This reduces the cost of energy produced in $/kWh. The cost of producing energy lies in the price of fuel per unit of energy, but also the purchase and maintenance costs of the equipment.

The same rule should apply when designing a ship. Sizing three generators to produce a maximum output of energy during the unloading period is not economically cost-effective if this period represents only 5% of the ship’s operating time and parasitic energy consumption (house load) represents at most 40% of the capacity of a single generator. The solution lies perhaps in installation a smaller size generator to meet 80% of the needs while the ship is at sea. Each ship is different and a comprehensive study must be carried out in order to make the right environmental and economic choices.

One thing is certain, shipyards and classification societies cannot be asked to do this kind of work. This is not within their mandate and their prerogative is different. It’s up to the shipowner to put in place the teams that will properly address this aspect during the design phase. The impact on the ship’s design and operating costs will be significant for years to come.

In general, there is a tendency these days to cut back on engineering work. Designers will always have a tendency to oversized equipment in order to reduce their risk of errors. That being said, efficiency is often found in the margin between overreaching safety and undersized equipment. It is worthwhile investing a small amount of money during the design phase so that a team of dedicated experts in energy efficiency can review the concepts and challenge the designers and classification societies in order to ensure that things are done differently and better. Energy efficiency often lies in innovation.

Well sized and properly instrumented systems, flexible control logics, and scrutinized automation processes are all methods that enable shipowners to boost their ships’ efficiency and performance.

GHGES Marine Solutions has the expertise necessary to help you in this and many other areas.

Contact us.

Waste Heat Recovery on Merchant Ships

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Waste Heat Recovery on Merchant Ships

heat-echanger

Diesel engines are used to supply most of the energy requirements on ships, but more than 50% of the energy consumed is lost in the form of heat.

Conventionally, a part of this heat is recovered in the stack and is normally converted into steam which is subsequently used in the different processes on the ship.

Steam used on ships is the target of bad press. First, several pieces of machinery are regarded as pressure vessels and require regular inspection. Second, the steam must be produced at port using the auxiliary boilers that, because they are not very efficient,  consume a substantial amount of fuel. Third, all the auxiliary equipment (pumps, relief valves, steam traps, etc.) require  continuous maintenance.

Although steam has been (and still is used) in several industrial processes because of its many advantages, the tendency in recent years has been to replace it with thermal fluids such as oil.

However, thermal oil presents certain disadvantages where energy efficiency is concerned. Its specific heat is lower than that of water. Its temperature must be kept higher than water in a boiler set at 6 bars, which reduces its heat exchange capability. With thermal oil, one cannot take advantage of the latent heat in the phase change of steam into water and, furthermore, pumps must be used to circulate the fluid which invariably increases the ship’s house loads. And, this does not preclude the use of a source of supplemental heat when the ship is in port.

 

Is Such High Temperature Really Needed?

On a merchant ship, 90% of the heat necessary for auxiliary processes can be considered as low temperature heat (below 100 degrees Celsius). High temperature ‘clients’ are those which affect heavy fuel oil injection and its treatment (purifiers).

waste-heat-pump

All the other ‘clients’ operate at low temperature: tank heating, domestic hot water, accommodations heating, lube oil purifiers, main engine heating when in shutdown mode, etc.

An often unexploited source of heat is from the cooling systems of the jackets. In addition to being easily usable, it is available when the ship is in port, thanks to the generators. Water has high specific heat (4.2 kJ/kg/C), almost two times more than thermal oil (2.2 kJ/kg/C). Also, water has a lower viscosity than thermal oil and therefore requires less power to circulate it. Bear in mind that using 10 kW of electrical power to operate a pump will cost between $10,000 and $15,000 in fuel per year. Electrical consumption is therefore an important factor to consider when choosing a circulation pump.

Even if the temperature of the cooling water is relatively low (70-85 degrees Celsius), it is sufficient for many processes.

Other important factors to consider include selecting the right heat exchangers and pumps, and properly calculating pressure losses. One does not select a waste heat recovery exchanger in the same way as a cooler.

In the end, the hot water loop recovers heat from main engine as well as that of the auxiliaries. It’s a simple system that does not require maintenance and is self-regulating.

Normally, more than 200 kW of heat can easily be produced when the ship is in port. This heat can be used to warm up domestic hot water, and keep the generators at the correct temperature and similarly the main engine when it is shut down. In some cases, this loop can be cascaded to preheat other systems that require a higher temperature. In so doing, the boiler is not used to the same extent.

A low-temperature recovery system can be easily installed. It does not require removal of the systems already in place. It’s an add-on to an existing installation. It allows for  savings and reduces GHG emissions. And, depending on the ship, the returns on investment of less than 2 years are not rare.

During the energy audit, GHGES Marine Solutions evaluates this opportunity and many others.

Reducing Fuel Consumption

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Reducing Fuel Consumption and Our Environmental Responsibility

 

Consuming fossil fuel is not without consequence. Atmospheric pollution affects the quality of the air that we breathe and disrupts the chemical composition of the oceans. Despite the fact that maritime transport is a very effective means of transportation, ships produce a significant quantities of greenhouse gases (GHG).

That’s why reducing fuel consumption by a few percentage points can make a big difference with respect to the GHG emitted.

It’s not uncommon, after a few relatively inexpensive changes, to achieve a 5% to 15% reduction in a ship’s fuel consumption. For example, if your ship consumes 4,000 tons of fuel per year, the amount of GHG that will be released into the atmosphere will drop by 640 tons. In addition, with the money saved (between $70,000 and $150,000 per year), you will recoup your investment very quickly.

For the majority of people who wish to lessen their impact on climate change, it is difficult for them to reduce their carbon footprint in a meaningful way. Even if they deploy all their efforts, it is rare that a single family can reduce its GHG emissions by more than two tons per year.

We often explain to ship captains that what a Canadian family can accomplish is a year, they can do in a single pass through the Welland Canal by adjusting the way they operate their ship.

We can make a difference by applying simple principles during the operation of our ships. The sound solution is to develop precise guidelines, draw them up in the form of a SEEMP[1], and enforce them. These guidelines must be realistic and specific to each type of ship. GHGES Marine Solutions can help you implement procedures adapted to your needs as well as heighten your crew’s awareness of their application.

By virtue of their capabilities, seafarers and shipowners are entrusted with a social licence in the face of climate change.

These capacities also come with the social responsibility to take the steps necessary to reduce their environmental impacts.

[1] SEEMP Ship Energy Efficiency Management Plan.

 

 

Compressed Air, What About It?

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Compressed air is primarily used for two completely different applications on a ship: starting diesel engines and supplying service air.

For starting an engine, a large quantity of high pressure air is needed on a sporadic basis. For the service air, a small quantity of continuously flowing, low-pressure air is required.

Producing compressed air is expensive. Several government agencies that focus on energy efficiency regularly raise awareness of this reality with industrial companies.

 

What About Ships?

When conducting our energy audits, we often find compressed air systems in poor shape. It seems that, as long as there is pressure in the tanks, they are not given much attention, if any. It is often when the compressors operate continuously and the air pressure is barely maintained that they are given attention. This critical stage often occurs after months of deteriorating and neglected operating conditions.Three-Stage-40bars-High-Pressure-Air-Compressor-WH-1-0-40_eng-

Producing compressed air is relatively expensive, and the higher the pressure the more expensive it is. One cubic metre of compressed air produced at 20 bars cost more than twice as much as the same amount of compressed air produced at 6 bars.

It quickly becomes obvious that the best way to reduce energy consumption is to use a compressor adapted to a ship’s needs. Taking the compressed air destined to start the engine and using it to produce service air is the best way to double the compressor’s energy consumption. Yet, this is what is being done on many ships. Moreover, this does not take into account the added maintenance costs that this practice engenders.

The main reason for this is that the economic criteria retained during the design/construction of a ship are not the same as those found when it’s in operation.

For example, installing a screw compressor that modulates according to pressure demand is less expensive to purchase than a piston compressor of the same capacity. However, the screw compressor can consume 30% of its power capacity even when it’s not pumping, which has the effect to raising the cost of each cubic metre of air produced.

A screw compressor can be useful to provide a large quantity of air intermittently (‘air on deck’, for example), but on a small system with modulating demand, it is definitely not the right device for the task.

IMG_3728

The least expensive energy is the one that is not consumed. A 5 mm leak in a compressor set at 6 bars requires approximately 8 kW of energy. Because of this leak, 15 tons of fuel will be consumed over a period of one year.

During the course of our energy audits, it is not rare that we are able to reduce the amount of energy required to produce compressed air on a ship by 30% to 50%.

With our calculations, we are able to demonstrate that the actions taken to improve the performance of these systems often pay for themselves in less than two years.

All ships are different but, as a rule,  a ship should not consume more than 2,000 cubic metres of compressed air per day. And the majority of this air should be service air produced at a maximum of 6 bars.

 

 

Here is an example of the worst and the best case scenarios:

article_air

An energy audit will allow you to update your compressed air system and much more.

 

Variable Frequency Drives Are Worthwhile

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Your Ship Has VFDs? Good, But How Are They Controlled?

New pumps

Using variable frequency drives (VFD) on pumps and fans is an excellent way to reduce your electrical power consumption and cut your GHG emissions. We know for example that reducing a ship’s speed by just 20% will lower its power consumption by 50% and, when its speed is slowed to 50%, the amount of energy consumed will drop to only 13%.

These devices are installed on many new ships but, in several instances, they are not optimized. Sometimes the control logic is deficient which forces engineers to operate the VFDs in manual mode in order to prevent a more perilous situation from arising.

Automatically controlling a system is the best way to avoid human error, improve systems performance, reduce fuel consumption, and cut GHG emissions.

Adjusting controls and/or developing control logics adapted to the needs of the ship must often be done during the course of routine operations. One discovers that the originally installed system does not respond fast enough, that it does not take into account special situations or that it is simply inadequate.

A good control system must respond to all the ship’s needs and adapt to all situations.

The importance of using a good control logic lies in the fact that a ship has several different operating modes. It can be at sea, in port or at anchor. It can be in the process of being loaded or unloaded. It can be operating in warm or cold weather, etc. All of the components that support the ship’s different processes are called into action in different ways and provide opportunities to achieve fuel savings.

To properly control of your VFDs, it is imperative that the systems connected to it respond according to the needs of the machinery.

If the ship has a distributed control system (DCS), changes can easily be made. If the ship does not have such a system, adding a PLC with an HMI touch screen interface can be developed by GHGES and installed according to your needs and those of your operators.

Acc-VFD

In this day and age, using pumps or fans running at full speed during the whole season is unnecessary when their speed can be varied according to the ship’s operating mode. The savings thus realized can very often cover the installation costs in less than a year.

For more details and assistance regarding your controls,  how to optimize your processes and find solutions for reducing your GHG emission, please contact us.

PETMAF Can Help

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Energy Costs and Energy Efficiency, PETMAF Can Help

 

Energy efficiency projects on a ship are much more cost-effective than those carried out on land-based facilities. This is mainly due to the higher energy costs incurred on a ship: $0.25/kWh compared to $0.10/kWh. Despite this reality, the industrial processes on ships are often more energy intensive than those in industry.

Why is this so?

Normally, there are three types of energy used in maritime transport:

  • Electrical
  • Mechanical
  • Thermal

Each of these forms of energy is produced from fossil fuel. It is well known that energy efficiency is measured by dividing the amount of energy used by the amount of energy contained in the fuel. The greater the energy efficiency, the more effective is the process.

A diesel engine transforms the thermal energy contained in fuel oil into mechanical energy. Normally, the bigger the engine, the more effective it is. The main engine is more efficient than a diesel-electric group, for example.

In the world of diesel engines, thermal performance is defined as the number of grams of fuel used for each kilowatt-hour of energy produced (g/kWh). It is the engine’s specific fuel consumption (SFC). This number can easily be transformed into a unit of thermal efficiency expressed as a percentage. This is what we prefer doing in order to be able to compare different heat engines with each other.

For the purpose of this article, let’s use the following values:

  • 200 g/kWh for a diesel generator running on MDO
  • 190 g/kWh for a main engine running on HFO

In this particular case, our small engine has a thermal efficiency of 42% while our main engine achieves approximately 46%.

In the case of our diesel generator, the performance of the alternator must be taken into account. Let’s use 90%. The thermal efficiency of the diesel generator then declines to 37.7% and its specific fuel consumption rises to 222 g/kWh.

If we produce electricity through the shaft alternator, what will be the performance of the electricity produced?

Using the same alternator at 90% efficiency, the specific fuel consumption will drop to 211 g/kWh. However, if other components are taken into account such as a reduction gear which has a 98% efficiency rating and a power converter at 95%, the specific fuel consumption rises quickly and can easily reach 220 g/kWh. In the end, there is relatively little difference from the point of view of thermal performance between a small diesel generator and a shaft alternator. It’s through avoiding maintenance on the diesel generator that gains are made. Very little is gained in terms of energy and fuel consumption.

For a marine boiler, the thermal efficiency is normally around 75-80%. If thermal heat is needed, it’s better to use the boiler instead of electric block heaters. Energy consumption will thus be reduced by half (37.5% vs 80%).

The least expensive energy is the one that costs nothing. Heat recovery on a diesel engine offers good opportunities. Every effort must be made to  recover the free heat from the stack economizers and from the engine cooling systems. Doing so increases its performance and reduces the production of GHG.

On a ship, everything that must be heated should be done so with recovered heat.

Today, the price of MDO oscillates around $750/ton and HFO around $350/ton.

The price of a kilowatt-hour of electricity produced on a ship varies between $0.10/kWh and $0.19/kWh. This is not much and the exceptional situation surrounding the price of oil price will not last forever. Besides, adopting good practices and implementing energy-efficient projects are still very cost-effective in several cases. Moreover, reducing GHG continues to be a pressing issue.

Let do a simple exercise: reducing electrical by 50 kW.

50 kW * 24 hrs/day * 250 days/year = 300,000 kWh

300,000 kW * 220 g/kWh = 83 tons of fuel per year, or between $29,000 and $62,000 in savings per year.

This represents 211 tons of reduced GHG. With the help of the ministère des Transports du Québec’s PETMAF Program, you could receive a subsidy that will reduce the period of return on your investment to such a point that you will quickly become convinced that the right time to invest is now.

Contact GHGES Marine Solutions for more details.

We can help find projects that are cost-effective for you and the environment.