Has your commission been held back due to an over-optimistic view of the technology? Have delays in the initial negotiation of funding and contracts supplanted itself to later stages of construction and delivery of your vessel?
Acquisition of a new high-speed vessel (HSV) or work vessel is an expensive and complex process involving many different actors and factors. Adopting new technologies also brings some new and unfamiliar factor to the table, but there are always of mitigating such risk.
In this article we will explore three ways of mitigating risk and get the best return on your investment when acquiring a vessel with emerging low/zero emission power technologies.
Common risk factors
As you know, the purchasing process itself is a complex process. Many different actors, from different fields, must come together.
- Funding
- Design and specifications
- Component manufacturers and suppliers
- Classification societies
- Operational contracts
These are key elements affecting each other in various degree. They must all align before you get your vessel, and even small delays on part can cause severe delays on the project. Expenses are substantial for vessels in commercial operation, and funds may have be allocated from several parties.
The vessel’s environmental profile and the implementation of hybrid, electric or other alternative fuel technologies must be determined early. For instance, the solutions available for hybrid and electric require higher CAPEX and supply chains are different than what you may know from conventional diesel driven vessels. The infrastructure needs, like battery charging solution, cannot be taken for granted.
Summarised, with new technologies you will also have new friction points. This can translate to risk if not leveraged correctly, but there are ways of leveraging it.
Read more: How Does Hybrid/Electric Propulsion Work In High-Speed Vessels (HSV)
How to minimise risk?
Realistic expectations of the technology’s capabilities
It is important to know both the strengths and weaknesses for your technology choice. This may include potential alternatives or options for your operational profile and budget. Perhaps if a fully electric solution is not optimal, or even possible for the intended region or route, and you should look to other low/zero emission fuels, like biogas and other e-fuels. Having realistic expectations from the planning stages can save both time and money.
We all aim for greener and more efficient use of our resources, but you must always remember that the status-quo, and the traditional way of approaching both acquisition and operation of commercial vessels, was established in the absence of today’s environmental considerations. This requires adjustment of both considerations and expectations. However, since emissions has not been prioritised to any large extent earlier, there is an incredible potential for quick and substantial improvements and results . In addition to the environmental benefits, the impact on OPEX should not be underestimated.
Reduce the number of parties
With low/zero emission solutions, we do not yet have the same production volumes and stock of components, as you might find for the diesel market. Parts are also not interchangeable in the same way, requiring more specialised hardware and software expertise when doing service.
Consolidating everything related to supply and service to one party will greatly simplify the process internally, and outward should the need arise. Imagine if you had to contact the manufacturers of your car’s individual components when purchasing or performing its yearly service.
Whether you drive a new combustion, hybrid, or electric vehicle, you just want the dealership to take care of it. With the right supplier it is possible, also in the maritime sector.
Read more: How digitalisation and cloud technology optimise your marine operation
Work closely with your supplier
It can be beneficial with closer collaboration with your supplier, from an early stage. Due to the current paradigm of supply chain and interoperability of components, having close communication with your supplier from the design phase, can smooth your journey from idea to operation considerably.
Being an early adopter of new solutions carry some inherent risk, but working with a partner, where trust and report has been established, can turn risk into reward. You, as an operator, can feel secure there is only a single point of contact should there be a need.
Digitalisation is built-in to new technologies to a much larger degree than is has been historically. This is a clear benefit that can be overlooked. Service needs and intervals can be automated, guaranteeing availability of parts, expertise, and minimal downtime. Data collection from the vessels various systems, allows for optimising of your routes, operation, and operational profile, resulting in substantially reducing your OPEX.
This outlines one of the key differences between the “old and new” type of marine vessels. While your initial CAPEX is increased by adopting new technology, operational stability and cost are greatly improved.
Conclusion
There is no denying that there are risks being an early adopter of technology. However, there are ways of reducing and mitigating such risk, turning it into reward.
Hybrid, electric and alternative fuel (e-fuels) maritime vessels require different considerations and have different strengths and weaknesses than traditional diesel vessels. An informed approach to the technology and how it is applied from early design phases, is the best place to start. Aspects like fuel- and power-infrastructure can often be taken for granted. Suppliers have intimate knowledge of how to do it right, and so should you from the very beginning.
Working closely with a supplier that can provide a total solution always pays off. This simplifies an already complex process. Involving the supplier early in the design phase serves you in the long and short term. In the short term, you have realistic goals set early. In the long-term you have a partner, understanding your fleet, its service needs, and your operation.
For many operations, the strength of a diesel vessel lies in its lower CAPEX today. An electrified/e-fuel vessel pays off in its operational security, operational expense and how it retains its value in decades to come. This new focus on OPEX can be challenging for some markets, but is an important consideration for high efficiency, low-emission vessels. The market and how we do business is still adapting to these new solutions, but it is mere growing pains on the inevitable path to a zero-emission industry.
