Improving Fuel Efficiency through the Supply Chain?

Improving Fuel Efficiency through the Supply Chain? and the Ship Efficiency Management Plan Peter Bond October 23 rd 2008

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Ship Efficiency Management Plan POSSIBLE LIST OF CONTENTS Energy Efficiency Operational Index (EEOI) not finally decided at this time Guidance on Best Practices: Fuel efficient operations Optimised Ship Handling Propulsion System Improved Fleet Management Energy Management Fuel Oil Other Measures Compatibility of Measures Energy Efficiency Table 3

Guidance on Best Practices for Fuel-Efficient Operation of Ships Source Intertanko 4

Fuel Efficient Operations Who pays for the fuel? June 2008...there are a huge number of ships (around 120) at anchor in Newcastle and Dalrymple Bay in Australia waiting for coal and iron ore cargoes.. 5

Fuel Efficient Operations Improved Voyage Planning First section of Company Voyage Plan Form Vessel: Voyage Plan Number: Section This Voyage Plan checked and approved, and Bridge Team briefed by the Master: Date: From: To: Plan prepared by Navigating Officer: Charts & NP corrected to NTM Acknowledge familiarization with this plan: Name: No / Date: Rank / Initials / Sign. Signature Signature: Rank / Initials / Sign. Departure Port Particulars: ; Name of the Berth: ; ETD ; Zone time: ; Distance to sea buoy: n.m.; Speed: knots; Draft: FWD: m, AFT m,; Min.underkeel clearance: m VHF channels: Pilot: ; Port Control: ; VTS: ; Other: ; Other Information: 6

Fuel Efficient Operations Weather Routeing DEPARTURE: KWANGYANG September 21, 2008 18:50 (GMT) ARRIVAL: MUNDRA October 8, 2008 10:00 (GMT) Voyage No: --- Ship Type: BULK CARRIER Voyage Type: Chartered Loading Condition: Loaded Cargo: STEEL PRODUCTS / 40,000MT VOYAGE SUMMARY : Route selection - The vessel sailed along the recommended route. KWANGYANG to MUNDRA Performed (15.0 Hours Saved) Fuel Oil Saving 21.90 MT 7

Fuel Efficient Operations Just In Time just-in-time - definition - A strategy for inventory management in which raw materials and components are delivered from the vendor or supplier immediately before they are required... 8

Fuel Efficient Operations Speed Optimization Optimum speed means the speed at which the fuel used per tonne mile is at a minimum level for that voyage. It does not mean minimum speed; in fact sailing at less than optimum speed will burn more fuel rather than less. However speed optimisation could lead to increased port congestion and be a new source of delay unless very carefully analysed and thus there needs to be a balance between voyage speed and the number of ships engaged in a particular trade route. Reference should be made to the engine manufacturer s speed/consumption curve. There are possibly further adverse consequences of slow speed operation and careful technical advice needs to be followed. 9

COMMENCE Operations END Operations Hose Disconnected DEPARTURE 1st Line Off DEPARTURE Pilot ORDER ARRIVE Pilot ARRIVE All Fast Hose Connected COMMENCE Operations END Operations Hose Disconnected DEPARTURE 1st Line Off DEPARTURE Pilot ORDER ARRIVE Pilot MOEPS (Master Operations and Environmental Performance System) Ocean Performance Ocean Performance Port Performance Port Performance Work Performance Work Performance 10

Vessel name: Arctic Bay Cargo: 46,000 m. tons fuel oil Ballast Voyage: No ballast voyage, vessel already on position Laden Voyage : Load Port: Quebec, Canada Discharge Port: Rotterdam, Holland Description Actual Ideal Difference Commence Voyage 08 April 17:38 08 April 17:38 End of Sea Passage 16 April 07:00 7 D 13 H 18 Apr 22:27 10 D 5 H All Fast 23 April 18:25 7 D 11 H 23 Apr 18:25 4 D 19 H Sea Passage speed 14.8 knots 11.0 knots Bunker Consumption 36.0 tons / day 14.7 tons / day 21.3 tons / day Bunker Consumed 272.0 tons 150.0 tons 122 tons Bunker Cost USD 149,627 USD 82,473 USD 67,154 Combined Saving: 122.0 tons of bunker ; USD 67,154 ; 45% of total bunker cost This is calculated at the lowest economic speed of 11 kts. It should be noted that even at that speed the vessel would still anchor for almost 5 days awaiting berthing. 11

Bunker Consumption ARTIC BAY Bunker Consumption 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 11,0 knots - 14,7 tons 14,8 knots - 36,0 tons LADEN BALLAST 0,0 6,0 8,0 10,0 12,0 14,0 16,0 12

Fuel Efficiencies 40,0 ARCTIC BAY Daily Bunker Consumption 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 07 apr 08 apr 09 apr 10 apr 11 apr 12 apr 13 apr 14 apr 15 apr 16 apr 17 apr 18 apr 19 apr 20 apr 21 apr 22 apr DISCH PORT Actual Ideal 13

The motivation for developing MOEPS was based on a preliminary analysis of 13 voyages: 26% gap between actual bunker consumption and ideal bunker consumption. This equated to a potential saving of around 840MT of fuel oil ($460,000). A major liner operator enjoys a gap of only 4% between actual and ideal bunker consumption that shows how much they have refined their just in time process. Of the 4% gap around 95% of this time is related to cargo operations (delays and stoppages). There is actually very little time between END OF PASSAGE and COMMENCE OPERATIONS. This requires very close cooperation between ports, terminals, vessels, managers and port Agents. 14

Optimized Ship Handling Optimum Trim Most ships are designed to carry a designated amount of cargo at a certain speed for a certain fuel consumption. This implies the specification of set trim conditions. Loaded or unloaded, trim has a significant influence on the resistance of the ship through the water. In some ships it is possible to assess optimum trim conditions during the voyage but for others it is not possible as design factors may predominate. 15

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Optimized Ship Handling Optimum Ballast Ballast should be adjusted taking into consideration the requirements to meet optimum trim and steering conditions and optimum ballast conditions achieved through good cargo planning for both dry cargo ships and liquid cargo ships. When determining the optimum ballast conditions, the limits, conditions and ballast management arrangements set out in the Ballast Water Management Plan, if applicable, are to be observed for that ship. Ballast conditions have a significant impact on steering conditions and autopilot settings and it needs to be noted that less ballast water does not necessarily mean the highest efficiency. 17

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Optimized Ship Handling Optimum Propeller Considerations 19

20 Optimal use of Rudder and Heading Control Systems (Autopilots)

21 Hull Maintenance

Propulsion System Marine diesel engines thermal efficiency around 56%. Fuel cell technology average thermal efficiency of 60%. Propulsion System Maintenance Maintenance in accordance with manufacturers instructions and the company s planned maintenance schedule will also maintain efficiency. Additional means to improve efficiency include: Use of fuel additives Scrape down analysis of Cylinder L.O consumption Slide valves on main engine Torque analysis Engine monitoring systems 22

Waste Heat Recovery Possible Benefits: Reduced fuel consumption by up to 12 % (claimed) Less auxiliary generator maintenance Lower emissions Potentially more cargo space (less bunker capacity needed) 23

Improved Fleet Management Better utilization of fleet capacity can often be achieved by improvements in fleet planning. For example, it may be possible to avoid or reduce long ballast voyages through improved fleet planning. efficiency. There is an opportunity here for charterers to promote This of course closely relates to the concept of just in time arrivals. claim this is one of the benefits from Pooling of vessels. Pool operators 24

Energy Management A review of electrical services on board against utilization can reveal some surprising efficiency gains. However care should be taken to avoid the creation of new safety hazards when turning off electrical services (e.g. lighting). Thermal insulation is an obvious means of saving energy. Greater use of energy saving lights. Energy Conservation Awareness training. We all need to be better informed of what we can do as individuals to conserve energy. Seafarers do need greater awareness as on board a vessel electricity is free is it not? Incinerators may not always be the most efficient means of garbage management. Consider fitting compactors and landing more garbage to shore always taking into account what happens to the garbage ashore. 25

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Fuel Oil Use of alternative fuels could reduce emission of CO2 but availability will often determine the applicability. One option that could be considered is the use of gas. Fuel cells are also a possibility using natural gas or hydrogen. Another alternative could be uranium. Use of wind power is also feasible. 27

Other Measures Some other fuel efficiency measures that may be considered: 1) Increase speed more economically. After dropping the pilot a gradual increase of speed to keep the engine load within certain limits will reduce fuel consumption. 2) As per 1) to be applied to Pilotage areas as well within safe parameters. 3) Carry out tank cleaning and gas freeing only when necessary and not merely to satisfy vessels Management system requirements. For example we specify each cargo tank to be visually inspected once per year but if the vessel is trading in black products for a prolonged period it would be inefficient merely to clean the tank for an inspection. 4) Consider fitting vessels with a harbour generator. Many vessels when in port or at anchor use a generator that is run inefficiently on a low load. Having a smaller harbour generator on certain vessels could reduce fuel consumption. 5) Consider recycling of grey water. It should take less energy to clean grey water than to produce further fresh water. 6) Design improvements through hull form developments, rudder, propeller, etc. 28

Other Measures 7) Aerodynamic considerations of the above water areas of a vessel. 8) Reefer container stowage positions segregate as much as possible to reduce heat transfer from compressor units. 9) Better berthing schedules for vessels waiting at anchor if on 12 hours notice rather than 1 hours notice vessels systems can be optimised for fuel savings. 10) Cargo conditioning on passage (such as cargo tank heating, ventilation, etc.) operators and charterers to consider exactly what is required and necessary. 11) Some vessels drift off port waiting for berthing. It may be advantageous to seek a safe anchorage as quite often the vessel has to run its engines to reposition itself. Ports to consider how they charge anchorage dues to assist in this matter and also need to consider acts of piracy that have an influence on the matter. 12) Closer liaison with Charterers when planning dry docks to avoid/reduce the need for repositioning of the vessel. 29

Compatibility of Measures Type of Vessel Size of Vessel Trading Area Age of Vessel Length of voyages 30

31 How to measure the efficiencies?

Model Ship Efficiency Management Plan Name of vessel: Vessel Type: GRT: Design Speed: Average Fuel Consumption: Capacity (TEU/DWT/Pass./TLM): Energy Efficiency Operation Index:. 1-no action 6-action required Weather Routeing Remarks: Software available/weather charts Trim Optimization Remarks: Each draught has an assigned best trim/trim tables/best practice Thermal Heat Recovery (WHR-systems) Remarks: only applicable for newbuildings 1 2 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 6 Improved Usage of Engine cooling water Remarks: (generation of technical water or even drinking water), improvements 1 2 3 4 5 6 32