Solving the Wrong Problem Really Well

The shipping industry’s response to the risks and opportunities presented by climate change saw the sector introduce, in 2013, the first ever internationally agreed CO2 reduction plans - The Energy Efficient Design Index and Ship Energy Efficiency Management Plan. Achieving international unity is a huge achievement and needs to be applauded. This has triggered a wave of interesting technological responses.

This focus on energy efficiency has a positive impact improving operational performance through innovative use of data, improved ship management and leaves room to further improve. Great brains in large corporations are rising to the efficiency challenge focussing on big new ideas. Rolls-Royce heralds the rise of the autonomous ship – eliminating crew costs; fossil fuel companies develop hybrid fuels suitable for Emission Control Areas enabling maximum cost efficiency whilst remaining compliant.

But what if this enormous effort is working really hard but solving the wrong problem?

The industry needs to muster the courage to address the huge disconnect between climate science and our collective response to it, we need to stop thinking about the ‘climate’ part and focus on  the ‘change’ bit. If we seriously think about how we need to ‘change’ then we must recognise we are facing an enormous adaptive challenge; we are required to rethink deeply held, and seemingly unshakable, beliefs, values and world views; pretty much everything we are confident we ‘know’.

We now need to talk about ‘energy’, rather than ‘efficiency’ in shipping.

Our current belief about ‘energy’ is its a commodity and we have no viable alternatives. It follows then that all we can do is make this commodity work more efficiently. We struggle to see past a belief that fossil fuels will always underpin the global economy because they have for the last 100 years or more and this reinforces our deeply ingrained world view. But in the end, the fossil fuel companies can have no strategy that involves fossil fuels which makes long term business sense.

We are witnessing the rapid emergence of renewable energy and smart thinkers recognise it’s creating a very different dynamic. The renewable energy sector behaves more like a “technology” business, where prices keep falling, quality keeps rising, change is rapid and market disruption is normal. When we make the mental shift to see energy as technology we can only conclude that more demand for renewables means lower prices and higher quality for a long time to come. The fossil fuel commodities they compete with follow a different pattern. If demand keeps increasing, prices go up because newer reserves cost more to develop. Market shifts, like the one we are currently witnessing, mean they may become temporarily cheaper, but they can’t keep getting cheaper and they can’t ever get better. Renewables are already competitive without market subsidies and will just keep getting cheaper. And better.

Shipping’s focus needs to shift. We need to identify the real changes that can be made and apply the great creativity embedded in the sector to solving the right problems really well.

Reach for the Stars

The SpaceX Falcon 9 rocket blew up last Sunday night during an attempt to send cargo into space. This is the third failed attempt at this particular cargo delivery challenge in the last eight months – ‘Antares’ fell to earth seconds after lift-off in October and the Russian ‘Progress 59’ failed to reach its target back in May. SpaceX is funded through a $1.6 billion NASA contract to fly at least 12 unmanned resupply missions to the space station. ‘Antares’ enjoys a $1.9 billion contract with NASA. A further $2.6 billion has been awarded to SpaceX to build the astronauts’ taxi service to the Space Station. Along with supporting these two projects NASA also finances Boeing to the tune of $4.2billion to achieve the same cargo and human transport to space objectives.

This investment in space travel is, to contextualise, five times more than the Greeks should be handing over to the IMF today.

The failure of the rocket has been embraced by the SpaceX project leaders as a great learning opportunity that will accelerate their progress. The Head of Operations is quoted as saying, “this will lower some of the speculation about how we want to move forward and how we want to work on the crew design."

Still up in the air Solar Impulse, the 100% solar powered manned flight, is undertaking its most audacious challenge yet, flying non-stop from Japan to Hawaii wholly powered by the sun. If you get chance, take a look at the website and share in the adventure. At the time of writing Andre Borschberg has been flying for 1 day, 15hours, 36 minutes and 15 seconds. He is flying at 70kts with batteries charged at 97%. The website has up to the second progress updates, lots of other data and live audio transmission from the flight deck. The journey to Hawaii is expected to last 5 days and this leg has already failed twice. The mission to promote clean aviation is collaborative and largely privately funded with $6.4m funding coming from the Swiss government.

The practical applications emerging from the initiative to accelerate aviation’s transition to renewable are recognised as potentially hugely rewarding.

The shipping sector, already pretty accomplished at cargo and human transport systems, might choose to be similarly ambitious and look beyond the immediate horizon. Initiating a collaborative clean energy project, creating a much needed positive media relationship with the wider public - all of which is achieved whilst developing useful technology. And all relatively low investment.

Out of Balance

It’s all very well the innovators creating commercially attractive and practical solutions to improving efficiency and making shipping smarter but where are the demand-side players?

On the push side international and national funding bodies and entrepreneurs have invested strongly in developing viable projects which first stage testing and analysis show to be very promising. 

Ship owners seem, on the whole, surprisingly reluctant to participate.

Innovators, generally, don’t have the resources to act on a whim or promote fanciful pet projects.  Considerable effort and resource is invested only after significant early research and analysis demonstrates significant potential. There’s a good deal of talk about the ‘conservatism’ of the shipping industry delaying progress, but we often see behaviours amongst ship owners that could be characterized as so far from a conservative approach as to be reckless.

Where is the pioneering spirit, the enquiring mind that seeks to avoid costly reactive responses that will be necessary when change is enforced – one way or another.

We know of a fully funded EU research project where there’s a requirement for a ship owner to participate in the fitting of an unobtrusive retrofit technology that has been model tested to deliver between 12 and 20% fuel savings. The designers have planned fast installation to fit around a regular maintenance programme, they need 80m of free deck, 5m above deck level leaving room for all the existing deck equipment. In return the ship owner/operator gets to keep any fuel savings.

So, there’s an immediate financial benefit, an understanding of the long term commercial potential for optimising performance of the vessel, and the opportunity to be part of a long term, lucrative business opportunity.

Yet the research team is struggling to find willing owners to participate. This reluctance may be rooted in some anxiety or concern about the technology, maybe it’s more down to lack of communication, or trust, or certainty that change won’t happen. Whatever the blocks are until the push/pull axis is more balanced valuable technology, brilliant ideas and our publicly funded research programmes will be wasted.

Please do get in touch if you have access to a vessel which may like to participate in the funded research programme of any comments or feedback on what holds back the demand side.

The Route to the Low Carbon Ship

There’s much energy generated on the subject of carbon in the shipping industry - should we measure it? Who should? How? What would happen to the data?

It’s like looking at the Universe through a peashooter.

Certainly there’s a need to measure carbon emissions to enable the implementation of the internationally agreed Copenhagen Accord however there’s an entrepreneurial spirit at large focussing beyond the carbon horizon on clear commercial goals of operational cost certainty and energy security.

Apple agrees to buy solar energy on long term agreements to secure its energy costs for the next quarter of a decade at least, not because it’s directly responding to a need to measure its carbon, or because it wants to be green and cuddly. The energy cost certainty allows the business to develop long term strategic advantage.

Given ships are long term capital investments fixing operational budgets by deploying renewable energy enables a significant cost element to be fixed over the vessels’ lifetimes. Harnessing ‘free’ energy from nature, the sun or the wind, where we’re pretty sure the price of these energy sources isn’t going to change anytime soon, means that after the initial extra capital investment renewable energy users are free from both fuel price volatility and worries about impending environmental legislation whilst enjoying a significant level of energy security.

Of course it takes a big leap of faith to pick the most cost-effective, reliable renewable energy solution and because capital investors and charterers are often separate entities there’s no one party with the incentive to drive change.

The answer lies in collaboration.

Through alliances of leading industry organisations knowledge and capabilities are shared and jointly developed, de-risking technologies for first movers whilst creating a reassuring network of expertise to undertake new builds, operations and ongoing maintenance of new solutions. In turn this spawns new highly profitable business models. In short, the route to a low carbon ship, a low carbon economy, is not to focus on carbon but on long term commercial advantage.

Painted Ladies

The biggest buzz at Nor Shipping was created by the exhibitors who chose to promote their wares by painting the bodies of almost-naked young women on their stand. The event organisers instructed the exhibitor to desist from sexist marketing and issued an apologetic press release. It’s hard to really believe shipping is an authentically 21st century industry when organisations still favour such crude and ineffective communication techniques.

We took a look around the sprawling exhibition space; was there much new to be seen? The short answer is: not really. Wartsila launched a new engine - their most efficient ever. But no gamechanger. An international exhibition is as much about being present and networking and in that regard Nor-Shipping is very successful - judging by the number of parties hosted each evening.

New to this year’s event was a presentation forum where shipping industry leaders and experts in commerce, law and technology shared thoughts and views. The biggest on-trend concepts being discussed were ‘big data’ and ‘automation’. Professor Richard Clegg, MD, LR Foundation was fascinating about how much data was currently, and how much more would be in the future, available from ships and shipping. He spoke of ‘Smart Materials’ that would be able to tell you when they were wearing out and that, over time, the data would reveal patterns so maintenance could be pre-empted to save money. Oskar Levander VP Marine, Rolls-Royce combined both themes developing his autonomous ship vision pointing to the use of Big Data to make humans on board redundant. Dr Martin Stopford’s key message was Big Data could squeeze 30% financial and efficiency savings out of shipping through new business models predicated on “management rather than gambling”. Dr Stopford declared shippings’ existing modus operandi to be a ‘dead parrot’ -which as all Monty Python fans know was a Norwegian parrot! 3D printing or ‘additive manufacturing’ threatened the shipping industry, as many of the finished goods currently moved by sea could be ‘emailed’; whilst simultaneously providing opportunities for printing spare parts on board. In renewables NorsePower announced the results of their test of a lightweight material flettner rotor revealing fuels savings of 2.6% had been accrued. Bore the ship owner was pleasantly pleased.

In truth when we stepped out of the event and remembered that the German Chancellor is a woman, as is the Head of the IMF, and that the oil industry majors were pleading for a carbon tax and then learn that G7 leaders have committed to a total decarbonisation programme it felt that shipping was still stuck in the 20th century.

And the exhibitors with the painted ladies - no one can remember their name.

Storing up Trouble

Big technology news recently from Elon Musk, CEO of Tesla, the electric car company, who announced that his company was now offering affordable storage for renewable energy. Considered by many commentators to be the 'game changer' that the world needs to transition to wider usage of renewables, Tesla's home battery packs or Powerpacks make it perfectly possible for most homes to go 'off grid' by storing electricity for using when it's needed once it's generated from solar panels and, less often in domestic situations, wind. This signals a turning point for the consumer, too, as the technology isn't prohibitively unobtainable, but affordable, within reach. Pre-order demand is such that, as Musk confirmed last week, Powerpacks are sold out through the middle of next year.

Hailed as a fundamental change to the way we think about energy, we are now beginning to see that the economic models we're all so familiar with are changing. Renewable energy is just that—renewable—and, as such, energy cannot be commoditised. A sustainable future involves two crucial determinants: who owns the technology and who drives the innovation. Musk is famous for maintaining a radical policy of shared IP (intellectual property). He's not interested in the expensive and complex issues that come with owning patents, recognising that the velocity of innovation will keep his business at the front of the pack as long as he stays sharp and continues to innovate.

If technology is where the money's at, it's worth considering what's happening in Masdar in the United Arab Emirates (UAE).

Here, an entirely renewable powered city is being built in the middle of the desert. It's effectively a massive research facility designed to rapidly progress technology for sustainability, where 'sustainability' is defined as “matching energy supply and demand”. Arrays of solar panels capture thermal energy to drive refrigeration units to cool buildings. However, 'passive' design, drawing on historical city plans where buildings are orientated toward as much shade and breeze as possible, means less energy is required. The UAE has the world's fourth largest oil reserves and the seventeenth largest gas reserves, so we'd be wise to wonder why sustainable technologies are of such interest.

In shipping there's a strong belief that as 'the most efficient mode of transport' there is little need to adapt to the renewable future.

But what we now see on land suggests that far-sightedness and adaptability are the way to build long term resilient business. Envisaging ships powered by renewable energy, of which there is abundance at sea, stored in batteries for use when needed, changes the whole business model for ship operations. Fuel can be free and innovation and technology can help liberate fuel and society at the same time.

 

The Need for Failure

You are six years old. You want to ride a bike. You get on; you wobble, fall and scrape your knees. You give up. But then you really want to ride a bike. So you try again. Bravo! soon enough you become a cyclist. Without learning how to balance, trying this way and that, the injuries and the resulting learning you can’t become accomplished. But now, you are zipping about the park showing off to your mates.

You have become a highly successful failure.

In technology and innovation we dwell in some kind of purgatory, a world awash with initiatives, conferences, academic research and increasingly outlandish digital images and concepts. And yet we achieve so little transformation.

We can see the bike; we’ve designed it, we’ve done the maths and modelled how we could ride one in computational fluid dynamics. But we are never taken to the park and given the space to get on and have a go.

We are not allowed to scrape our knees.

We, as a business community, have become so full of the fear of failure, that we don’t even try to get on the bike. Maybe we don’t really want to ride a bike.

The shipping industry contents itself with the truism that it is the most efficient form of transport and so, concludes it has less need to change. But pressure is building, even from within. At last week’s MEPC event at the IMO in London, Tony de Brum, The Marshall Islands Foreign Minister made a rare appearance by a politician in a forum dominated by industry voices and registry officials. Mr De Brum’s nation is the third largest registry in the world, and his country is being swamped by rising sea levels. He said: “We are an island nation and shipping is one of our lifelines – we cannot survive without it. At the same time, carbon emissions, including those from shipping, pose an existential threat to our people and our country.” The Marshall Islands tentatively asked the IMO to “start the process to consider” a CO2 emissions target. The bureaucrats weren’t convinced and after an hour and half of discussion shelved the idea.

To meet internationally-agreed targets limiting global average temperature rise to 2C the global fleet needs to be at least twice as efficient by 2030 than it is today. Dr Tristan Smith, lecturer in energy and transport at the UCL Energy Institute, UK, said this is significantly more stringent than the levels currently being debated and urges the industry to close the gap."Having an agreed goal of how shipping will need to change over the next 35 years is a small but important part of the discussions that are needed," he said, "but however the discussions resolve, the planning for change cannot start soon enough - if it's going to have a minimum of disruption on international shipping and global trade."

There are a plethora of new technologies currently in late stage development applicable to shipping that would enable the sector to reduce carbon, whilst also saving fuel costs and so become more resilient in an increasingly volatile world but little appetite to go beyond the theoretical in case these technologies don’t turn out exactly as we expect. Launching a new piece of tech into such a wide and interconnected system as global shipping is bound to lead to unexpected consequences. We can’t believe that those unexpected consequences might be good ones and we fail to grasp that if they aren’t then failure is about the most important lesson on the route to success. 

Royal Flush

King Willem-Alexander of the Netherlands opened Maasvlakte II Rotterdam’s newest container port this week. What is remarkable about this box shipping development to a dry bulk sector is the interconnectedness of the systems thinking from the APM Terminal, the port owner and developer, management, the speed at which the project has been executed and the multi-dimensional benefits it’s delivering.

Maasvlakte II is 100% renewably powered, all its electricity needs are derived from wind turbines which provide quieter logistics solutions than diesel powered handling solutions whilst wind powered electricity produces neither CO2 nor other emissions. Furthermore, depending on the contractually arrangements APM have been able to secure they will benefit over the long term from energy price predictability as wind power is exempt from any market price volatility!

The terminal was built on reclaimed land from the North Sea, a significant and ambitious undertaking in itself, and it is designed as a multi-modal hub using barge and rail connections to inland destinations to avoid congestion and emissions from any increased road traffic that may have resulted from increased freight turnover.

Speaking at the opening Kim Fejfer, CEO APM Terminals, claimed the terminal was “significantly safer” - although it’s currently not clear how this is measured. It appears that new standards for safety for both workers at the port and customers have been set.

Construction began in 2012 and the first vessel call was December 2014 - a quite astonishing feat given the scale of the project ambition.

The ace card, however, is the increased 40% productivity achieved through the fleet of 54 fully automated, remote controlled electric cranes which facilitate faster, quieter and cleaner freight handling. This system has been modelled and simulated in a ‘virtual world’ allowing systems to be optimised and people to be trained in efficient use of new technology using modern technology. All of which clearly benefits port users by speeding up the project development and reducing turnaround times in port.

This is 21st century systems-thinking - and doing - exemplified. It is something all sectors of shipping, and beyond, can emulate. Moving to the future is not only possible; we have all the resources available to do so. What’s required is bold and determined vision to bring a multiplicity of ideas together to create something better. Worthy of a King.

Managing risk or facing crisis

Introducing new technologies into any sector is a big challenge, in shipping it may be made more difficult by the structure of the industry. Various players are involved in creating the complete ‘transport delivery system’; designers, naval architects, marine engineers, ship builders, ship owners, operators, charterers, brokers and cargo owners. No one entity has responsibility for driving change, consequently each looks to the other to lead. If leaders don’t emerge it often falls to academics and other ‘experts’ to make the case or assess the risks which in turn leads to an information overload creating further inertia.

Back in the day when we didn’t have access to the powerful computing technology that enables complex scenario planning we had to “go with our guts” much more, but did it make things any easier? Leaders still had to take risks and did so to progress their enterprises. Increasingly we’re all about managing risk.

In our globally interconnected and increasingly transparent world there are unknown quantities of slightly suspect data and half-understood theories sloshing about making it possible to justify pretty much any (in)decision you care (not) to make. There’s also a whole worldwide web of connected media streams to underline very publically when leaders get it wrong. Making bold decisions on emission abatement technology is newsworthy and the solutions tend to be quite visible making them an easy target for the hungry media streams. Eye-candy visuals created by project developers attract attention and represent a big, fat statement of intent. Failure would be very public and consequently probably just a bit too scary. Shipowners do take market risks, often resulting in ordering too many ships, yet find visible risk-taking such as embracing a novel solution, even on a trial basis, more difficult to accept.

Is anyone measuring inertia created by complexity? We’ve become so used to propulsion being sourced via ‘one-size-fits-all’ cheap liquid fossil fuels that, as we move towards the multiplicity of solutions for a heterogeneous shipping fleet impacted by a variety of previously unknown global forces, we become overwhelmed the complexity and fail to take decisive action and hand decisions to ‘risk experts’. This kicking the can down the road simply brings the industry closer to crisis. The question is would we rather be measuring risk or managing crises.

Wind Works

Future Automated Sailing Technology rigs, FAST rigs for short, are smart bits of kit. When we think of sailing vessels, square riggers of 120 years ago, we immediately associate them with uncertain delivery schedules, dangerous handling capability and filthy on-board conditions. Things have changed.  FAST rigs, being automated, are operated from the bridge by means of push button controls.

The technology, created in the 1960s by German Wilhelm Prohls as the dynarig, has been developed and proven on the super-yacht The Maltese Falcon. She used sail propulsion alone for more than 60% of her time at sea. She crossed oceans, manoeuvred in and out of ports across the world and can be sailed straight off the dock (a very cool piece of seamanship captured on You Tube). The joke is she needs 2 sailing crew, one to push the buttons, the other to fetch the coffee.

To industrialise this technology loading and force analysis is undertaken on the best materials to use to create a robust, workaday solution for a merchant vessel rather than a money-no-object system that is a necessary element of superyacht DNA. The FAST rig combines steel and composites in a novel but straightforward and manageable way to secure the optimum techno-economic balances between strength, light-weighting and cost.

The sails themselves are like roller blinds, each individually fitted into the rig system via a cassette mechanism. This offers several advantages; when all the sails are fully deployed the propulsion effect is similar to a fixed wingsail but in varying weather conditions when the wind can be behaving differently at the top and the bottom of the masts various combinations of soft FAST rig sail can be employed allowing maximum optimisation of available wind. In the event that a sail blows out it is easy, safe and cheap to replace. This happens in port. The mast is tubular and will contain, on the inside, a safety ladder developed and approved for use in wind turbines. The crew clips out the old cassette and the new one in.  

 

The FAST rig, as a consequence of automation, has no lines and rigging on deck meaning access to holds is considerably more straightforward than on the old traditional clipper ships and crews aren’t on deck on foul conditions hauling on ropes ensuring the safety of the ships crew.

Reliability is key in 21st century logistics systems and industrial sailing hybrid vessels have usual engine propulsion systems available ensuring schedules are maintained. Because these engines are used less often it ensures longer life and lower servicing and maintenance requirements.

Islands in the Sun

Sun drenched South Pacific islands make you think of paradise. The reality of survival there belies the fantasy somewhat. Pacific Island Countries (PIC) are almost totally dependent on imported fossil fuels with all the volatility that brings. Importing fossil fuels using fossil fuels delivers a double-whammy to communities already being forced to re-locate from their island homes due to rising sea-levels caused by climate change. 

A recent study published by the University of the South Pacific (USP) highlights the lack of policy on renewable energy technology use in sea transport when there is an urgent need for such technology to be commercially trialled as a means of reducing the region's dependency on fossil fuels given the importance of sea transport to socio-economic development in the Pacific Islands

Whilst international shipping industry is engaged in a search for greater efficiency in fuel consumption and emissions, and global interest in low carbon technologies for shipping is growing, solutions at the small-scale level - appropriate to the domestic needs of PICs - have yet to be seriously explored. The main options to reduce fuel use and emissions can be grouped into four categories—alternative fuels, operational efficiencies, technology advances, and renewable energies. The unique characteristics of the Pacific mean the options available to the global operators are not necessarily the most accessible or appropriate for PICs due to the characteristics of local demand; the Pacific merchant fleet (blue water but small and old, higher proportion of petrol to diesel); a lack of access to financing for new technologies; and the prohibitive cost and practicality of establishing extensive bunkering and support infrastructure for alternative fuels. These same factors likely make renewable energy technologies, such as wind and solar, more appropriate for a range of Pacific applications than at a global scale. Biofuels, from coconut oil, and biomethanes, have strong potential, especially for more isolated communities with high biomass availability.

Renewable energy-assisted shipping, often using known and proven wind, solar, and biofuel technology, is an emergent option for sea transport globally. Research, analysis, and development of commercial models, especially for Small Island Developing States (SIDS), lags far behind research  of other renewable energy applications like electricity generation. However, it is clear that such technology offers strong potential to both reduce PIC reliance on imported fossil fuel and revolutionize PIC shipping. Costs of fuel and operations are either passed to consumers or borne by government subsidies causing economic instability. The USP research suggests that renewable energy shipping offers economic, environment, social, cultural benefits at local, provincial and intra-regional levels. It offers a potential future where fleets of smaller but more sustainable new ships can replace current single, aged, large vessel operations.

Which makes the view from a paradise beach with a sailing ship on the horizon seem all the more attractive.

Stranded Assets

Examining the detail of the IMO 3rd GHG study we can conclude that despite promising topline figures shipping’s principle emission reduction solution, slow steaming, is a risky strategy as fuel/emissions savings are not ‘locked-in’ through technology developments. As bunker prices fall so the temptation to speed up becomes more compelling which, as a consequence, will see emissions rise again. In the regulatory context this is an increasingly pressing problem. Last week at the Geneva Climate Talks 194 countries agreed to a text that could see a legally binding international cap on emissions from shipping by 2020. This text is due to be ratified at the Paris Climate Change Conference at the end of this year. The IMO will be charged with implementing the framework.

Looking at the impact of the much feared implementation of ECAs the low oil price has softened the initial financial blow somewhat with the net effect about zero. But the real impact will be felt when oil prices rise again as they, “inevitably will” according to Drewry Maritime Research.

All of which makes Hamburg Bulk Carriers MD, Jens von Hansen’s remarks, made at the launch of the first of 10 new 435000 dwt HBC bulkers based on Delatmarin’s ‘B Delta’ efficient ship design, the more pertinent. He said shipping must “get clean” and, “If the shipping industry does not rise to the challenge of developing more fuel-efficient and environmentally friendly ships, it risks large sections of the global fleet becoming "stranded assets".” Looking for inspiration to other global sectors he noted how far behind the curve shipping was and called for a collective effort to develop zero emission ships. Coincidentally the Manchester School of Mechanical, Aerospace and Civil Engineering (MACE) published the results of an industry workshop where the expert collaborators mapped the route to zero emission ships in all sectors by 2050. They concluded: “Clearly there are many barriers to overcome, but at least the timescale and technologies offer feasible hope to be harnessed.”