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.
- 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.
How to minimise risk?
Realistic expectations of the technology’s capabilities
Reduce the number of parties
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.
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.