INTERVIEW: Svitzer Sees Battery Power as Key to Decarbonising Tug Segment

Kasper Karlsen is chief operating officer at Svitzer. Image Credit: Kasper Karlsen

Maritime services firm Svitzer expects battery power to become one of the dominant technologies used to decarbonise the tug segment.

The firm is targeting a 50% reduction in carbon intensity from 2020's levels by 2030, and net zero emissions by 2040, Kasper Karlsen, chief operating officer at Svitzer, said in an interview with Ship & Bunker.

The company has a total fleet of 450 vessels, of which about 360 are tugs, and already has one battery-hybrid tug on the water.

"We have spent the last couple of years trying to investigate what kind of alternative fuels would be fit for a tug application in the future," Karlsen said in the interview.

"We've deselected ammonia - it's too toxic - and on hydrogen, we are not so keen because of space constraints.

"Methanol is still probably, of the alternative fuels, the best applicable one.

"What we've been surprised by over the last year is how fast electrification is going.

"With battery technology becoming commoditised, we also see the prices going down. And we have known from the beginning that electrified - or hybrid-electric - tugs will be a part of the endgame, and we are putting a lot of effort into battery technologies right now."

Biofuels

In the near term, the company is expecting biofuels to play a big role in its strategy to decarbonise its existing fleet.

"It's not an option for us to build our way to zero; we have a lot of these tugs, and they will keep operating for many years to come, so we need to find solutions for them," Karlsen said.

"And most notably we have had in the past year 60-70 of our tugs in the UK running on HVO.

"A lot of the power transition when we come to 2030 and 2040 will still be based on drop-in fuels.

"The FAME and the blends are generally cheaper than HVO, but with the drop-in fuels it's a lot about the price, but also the availability.

"In Europe we see a more competitive price and more availability than in the other regions that we operate in.

"Hopefully it will develop through the coming years, and we'll have more availability in other regions."

The company has developed internal expertise on which biofuel grades will be most suitable for its needs.

"Some years ago, we've built out some internal capabilities to assess both the origin of the feedstock and the quality of the product itself," he said.

"We lean towards international standards for this, so that we ensure that what we put in the tanks and the engines is indeed sustainable and does not damage our equipment.

"We have tested both HVO and FAME, and have worked closely with our engine manufacturers and done tests, checking injectors and filters."

Battery Power

The firm sees battery-powered tugs taking on a dominant role in the segment over the longer term.

"We believe that electrification is part of the endgame, and will be the dominant one also in the coming years," Karlsen said.

"That is where you can say we are placing our bets right now. That being said, I think in the future there will be a mix of energy."

Svitzer sees a premium for these sorts of vessels over conventionally-powered tugs, but a premium which may narrow over time and be mitigated by emissions regulation compliance costs.

"We've recently ordered a big escort tug for Sweden, which has a six MWH battery capacity; it comes at a premium compared to a similar-sized escort tug with just a conventional diesel engine, and the premium is still high," Karlsen said.

"If you look at the total cost of ownership, it depends on where you operate, how you operate and the electricity price in general.

"The diesel price per KWH is similar to electricity prices, so on the fuel side, it's equivalent in many places.

"But obviously if the alternative is to go for biodiesel, there's definitely an upside on the battery side there.

"We will also see a reduction in our maintenance and repair. We will also, in general, see less energy consumption for the same jobs, because when you're idling - which you actually do a lot, waiting for orders - in an electric tug, you more or less just shut it down, while for the diesel tug you have to keep the engine running all the time.

"It's very much still on estimates and assumptions, but on the initial investment price there is still a premium that we foresee will go down as the technology develops."

Paying for Decarbonisation

The company is optimistic about the prospects for persuading its customers to pay for decarbonising its fleet at a faster pace than that envisioned by the IMO's GHG strategy.

"We have been quite successful previously with our EcoTow product, where we basically provide green towage, and the customers get the carbon credits from having a job done on HVO," Karlsen said.

"But it'd be wrong for me to sit here and say we have the commercial side covered; I think it's something that all, not only in the maritime world, but all industries, are struggling with, how to fund this.

"We have a few products on the shelf that we have rolled out and have customers for, so there is a willingness, but it's not a widespread willingness, and not enough, and that's also why we try to influence regulators.

"We think that we will only really succeed with this if regulation comes in, Right now, we are not part of the [EU-ETS] scheme in Europe, because our tugs are simply too small. But of course our customers will soon be enrolled on the EU-ETS scheme and we are part of their Scope III emissions, so there's a way in there."