Shipping: Electric before Autonomous

By Roar Adland (Ph.D., MICS), Shipping chair professor at Norwegian Scchool of Economics (NHH)

I recently emailed Tesla’s Elon Musk and asked for his opinion on electric propulsion for deep-sea shipping. His view is, not unexpectedly:

“Everything will go fully electric, apart from (ironically) rockets. Ships are the next easiest to solve after cars. Intercontinental flight is hardest, constrained by gravimetric energy density.”

OK, so no surprises there, and obviously the question is how long it takes. Yet, few people in the shipping industry and academia alike would seriously contemplate a battery-powered Capesize at the moment.

If you give it a second thought, however, it’s not so far fetched. If anything, this is a much more important technological challenge to solve than the dubious commercial case for unmanned ships (see Unmanned ships revisited), never mind the social cost of making most of the 1.65 million seafarers on commercial seagoing vessels unemployed.

Electrification based on renewable energy sources such as solar power would obviously decarbonize shipping and remove the need for endless bickering at the IMO on how to deal with greenhouse gases. Electrification is probably also a prerequisite for autonomy as fossil-fuel ship engines simply do not have the reliability required for unmanned operation. Sure, you can build in redundancy and have dual engines but that’s a waste of CAPEX and space/weight.

But the physics and economics will never work I hear you think. Not so fast. Let’s try a simple back of the envelope calculation:

  • Consider a modern Newcastlemax of around 210,000 DWT in the Port Hedland – Qingdao iron ore trade. That’s 300 hours sailing each way at average current speeds of 12 knots.
  • To maintain 12 knots for this vessel you’ll need around 10,000kW of power, allowing for a bit of weather and energy loss, so total energy consumption for the one-way trip is 3000MWh. Equivalent fuel consumption for a standard HFO engine would be around 40tpd at this slow-steaming speed, or 500 tonnes for the voyage.
  • How large a battery installation do you need to store 3000 MWh of electric energy? Let’s turn to the expertise of Elon Musk again:

In the near term, we can do just above 200 Wh/kg, inclusive of all packaging, thermal, control and power electronics. That will rise to 300 Wh/kg for cost optimized systems and 400 (maybe even 500) Wh/kg for mass & volume optimized systems over the next ten years.

  • So, at the moment (200kWh/tonne) that means an all-inclusive battery installation of 15,000 tonnes (and roughly 15,000m3), potentially decreasing to 6000 tonnes within a decade.

That sounds like a lot, but it’s actually only 7.1% of the ship’s deadweight (DWT) and an even smaller fraction (about 5%) of the volume of the ship’s hull. In volume terms, it’s not a lot more than the volume currently set aside for the engine room, fuel tanks, stores and piping. In a decade, if Elon Musk’s expectations are correct, the weight of batteries is down to a mere 2.9% of DWT.

Importantly, these ships are rarely loaded to full carrying capacity anyway, so the additional weight of the battery pack will in practice not be a constraint, and that’s not even accounting for the savings in fixed weights (spare parts etc.) and weight savings due to the disappearance of the fossil fuel engine, related piping and fuel tanks on a fully electric ship. You might even see designs where cleverly positioned batteries function as fixed ballast, reducing the need for seawater ballast and all its problems. No problem on the physical side, then.

How about the economics? The latest talk in the solar power industry is that the $0.02/kWh barrier (all in) will soon be broken. Taking this as a benchmark means our fully electric Port Hedland – Qingdao voyage (3,000MWh of energy) has a fuel cost of $60,000 (or $0.30/tonne), compared to the current equivalent cost of HFO of $150,000, basis $300/tonne for HFO. That sort of savings ($7,200/sailing day) can pay for quite an expensive battery, though I’m not sure even Elon Musk knows the true additional CAPEX yet as this is virgin territory.

Even though this was only a quick back-of-the-envelope exercise, and assuming the numbers stand scrutiny, this article still has some extremely important takeaways:

  1. Don’t discard battery-powered deep-sea shipping for medium-haul routes solely on the basis that it obviously requires a very large battery installation.
  2. On a running cost basis, fossil marine fuels such as LNG and HFO are already uncompetitive versus best-in-class solar power. In a decade, LNG powered propulsion, which never really got started, might already be dead.

Only solar power and battery solutions solves the emission problem of shipping once and for all. Autonomy/unmanned ships is a sidetrack. Put your time and resources towards solving something that really matters, both for the environment and the bottom line.

Originally published on LinkedIn.
For more discussion on this topic also check out Fathom’s Disruptive talk held at Nor-Shipping in June.

Roar is a maritime Big Data expert, experienced FFA trader, shipping economist, freight market consultant and Clarksons ‘alumni’ with a particular interest in the global drybulk, tanker and commodity markets.

Internationally recognized and published academic in the areas of freight derivatives, green shipping operations, ship valuation, AIS data applications, risk management and freight market modelling.

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