Under constant pressure to improve fuel efficiency and reduce carbon emissions, owners of liquefied natural gas (LNG) carriers are confronted with a vast array of investment alternatives. Recent studies suggest that investments aimed at optimizing hull and propeller performance are likely to be an important part of the answer.
Hull and propeller performance refers to the impact of changes to a vessel’s hull and propeller surfaces on its energy efficiency in between dry dockings. Hull and propeller performance determines the rate of speed loss or, alternatively, how much more or less energy is required to move the vessel through water at a given speed over a given dry-docking interval.
From the moment a vessel enters service, the condition of its hull and propeller surfaces begins to deteriorate. Through a combination of mechanical damage and the onset of biological fouling, these surfaces are constantly under attack. At each dry docking, work is done to restore the hull and propeller surfaces to a good condition. However, with increased emphasis on lowering bunker costs and reducing emissions, owners are increasingly focused on what happens between dry dockings.
In 2012, Jotun Marine conducted a comprehensive study based on actual vessel performance data collected from 32 vessels over 48 dry-docking intervals. The study concluded that average energy efficiency loss attributable to hull and propeller performance for a typical vessel in a typical trade was between 11 and 18 percent. This depended on the length of the vessel’s dry-docking interval, which was typically between 36 and 60 months. For example, a typical vessel trading over a 60-month interval was found to use 36 percent more power at the end of the dry-docking interval than in the beginning in order to maintain the desired speed. (It should be noted that a number of the vessels included in the study had conducted regular or ad-hoc cleanings of hull and propeller. If such cleanings had not been done, the efficiency loss would have been even higher.)
The findings in Jotun’s study of hull and propeller performance correspond with the findings of other studies based on analysis of vessel performance data and the research into the effects of hull condition on frictional resistance. For example, a recent submission by the Clean Shipping Coalition estimates that the impact of a deterioration of hull and propeller performance is likely to result in a 15 to 20 percent loss in vessel energy efficiency on average over a docking interval.
Jotun’s study also includes vessel performance data from 8 LNG vessels covering 12 dry-docking intervals. The energy efficiency loss attributable to hull and propeller performance for these eight LNG vessels was found to be somewhat higher: 19 percent on average over a 60 month interval. While this sample is relatively limited, it is reasonable to assume that performance on LNG vessels is similar to that of the world fleet average.
The Consequences of Speed Loss
There are three ways a vessel owner or charterer may respond to hull and propeller-related speed loss once a ship is in service. They can increase engine power (and thereby bunker consumption), accept a reduction in speed, or find a balance in some combination of the two.
If the efficiency loss is compensated with an increase in engine power, the resulting increase in bunker consumption and bunker cost will be equal to the relative efficiency loss. At current bunker prices, a large LNG vessel with an activity level of 75 percent, trading at 19 knots, and consuming 145 tons of bunker per day would spend around $143 million on bunker over a 60-month dry docking interval. For such a vessel, the cost of compensating for an 18 percent loss in vessel energy efficiency by an increase in engine power and bunker consumption would be around $26 million over the period or around $5.2 million per year.
If the efficiency loss is accepted as a reduction in speed, bunker cost and consumption will remain unchanged. However, given a typical design, the vessel will have lost one third of the 18 percent efficiency loss in speed. Over a 60-month dry-docking interval at a 75 percent activity level, this results in a potential loss of around 82 trading days or around 38,000 sea miles. The economic cost associated with such a loss in transport capacity depends on the strength of the LNG freight market. In today’s market, it may easily exceed the above estimate for the cost of compensating for the efficiency loss by an increase in engine power.
The impact of an energy efficiency loss on a vessel’s greenhouse gas (GHG) emissions also depends on how owners respond to speed loss. If speed loss is compensated with an increase in engine power, the resulting increase in GHG emissions will be equal to the relative efficiency loss. For example, the LNG carrier referred to above would produce an increase in emissions of CO2 of around 110,000 tons over a 60-month dry dock interval. If the speed loss is accepted, the GHG emissions increase would come from the additional capacity brought in to compensate for the lost transport capacity.
The Value of Improved Performance
While the scale of the impact of speed loss on bunker consumption may have been underestimated, hull and propeller performance affects the bunker consumption of a vessel. There are many products, services, and solutions offered from a broad range of paint manufacturers as well as providers of complementary technologies that claim to deliver greater or more moderate improvements in hull and/or propeller performance.
In most cases, as long as even a fraction of the promised bunker cost saving is realized, the investment case would be attractive. For the LNG vessel used in the example above, a $750,000 upgrade investment in the best available antifouling paint would be repaid in less than a year (one fifth of the lifetime of the paint) if the energy efficiency loss attributable to hull and propeller performance was reduced by as little as 18 to 14 percent. The fuel cost savings over the remaining four years of the dry-docking interval would represent pure profit contribution.
When calculated over longer periods, the value of an improvement in hull and propeller performance extends far beyond direct bunker cost savings, as even a moderate bunker cost saving has a substantial long-term impact on the overall cost of operating a vessel. For example, when markets decline, bunker costs become not just a cost issue but a strategic issue. There are also clear indications that cargo owners are increasingly concerned with reducing the environmental footprint throughout their supply chains. Finally, regulatory schemes designed to incentivize more energy efficient designs and operations are currently coming into force or appearing on the horizon.
The reason why the vessel energy efficiency loss attributable to hull and propeller performance remains so high, and why so much of the potential for improvement in hull and propeller performance remains unrealized, has been a lack of reliable measurement and benchmarking capabilities. Calculating all the variables isolating the impact of hull and propeller performance on speed loss represents a complex technical challenge. Until recently, little progress had been made on the issue, making it difficult for owners to calculate expected returns on investments. That is, if the return on an investment cannot be measured, the investment cannot be justified. Similarly, in the case of vessels operating under charter contracts, charterers have found it difficult to pay higher rates for vessels claiming to be more energy efficient as long as these efficiency claims cannot be documented.
The lack of reliable measurement and benchmarking capabilities can now finally be addressed. Over the last several years, a number of systems for analyzing and optimizing vessel operations have become available on the market. These systems typically include a more complete range of sensors as well as system components for automatically capturing, storing, and transferring the large amounts of data being generated by these sensors. Most modern LNG vessels today have had such systems installed onboard during the new-building process or have added them as retrofits during dry dockings.
Based on the actual performance data available from most such systems, several methods have been developed for accurately isolating and quantifying the impact of hull and propeller performance on overall vessel energy efficiency. Once reliable measurement and benchmarking capabilities have been established, vessel owners can start addressing the improvement potential within hull and propeller performance based on sound investment decisions.