INTERVIEW: Shift Clean Energy Sees Near Doubling of Maritime Battery Systems by 2025

The firm offers containerised energy storage systems that can be swapped out at port. Image Credit: Shift Clean Energy

Vancouver-based Shift Clean Energy expects to see a near doubling of the number of battery systems installed on ships over the next two years.

The firm is seeing a rapid increase in demand for the technology as the shipping industry bears down on its GHG emissions, CEO Brent Perry said in an interview with Ship & Bunker.

"Today, there are probably about 650 commercial marine ships incorporating either hybrid or electric solutions," he said.

"That's mostly in the ferry market and the tugboat market as the two principal spaces, although things like cruise ships and oil and gas vessels are starting to become part of that solution.

"I started in the marine energy storage business sector in about 2010.

"With the 600 plus installations that have occurred over the last 12 or 13 years, we are going to see that many installations completed over the next two years alone.

"So the volume is definitely gaining steam."

Regulation Driving Demand

The rise in demand is being driven both by improved economic strength and regulatory pressures, Perry argued.

"While we demonstrated proof of technology back in 2012-13, it seems that the rise and fall of economies, and COVID have had a material impact on adoption," he said.

"But by and large, between proving that the installations work, that they save owners money, and by delivering on the environmental benefits and with governments stepping up with legislation and the support of groups like the IMO, all of this has helped it become a reality for international shipping.

"Now it's accelerating really quickly.

"We went from operating in Northern Europe and the Baltics to now having eight different companies with 22 offices around the world."

The possibility of using battery power to help comply with the IMO's Carbon Intensity Indicator (CII) regulation has also been a factor.

"The batteries will absolutely contribute to improved CII scores and help set the parameters of what those scores should be; that's exactly what's happening today," Perry said.

"Overall, battery technology is improving the density of energy and the performance of energy, safety, reliability and de-risking the operation of ships."

Containerised Batteries

Shift's batteries for the marine market come in a containerised form, and its PwrSwap subscription service allows batteries to be swapped out at ports, removing the need to wait for them to be recharged.

The firm also brings in renewable power sources where possible at the facilities where the batteries are recharged, Perry said.

"We incorporate the charging and the discharging into the emissions mathematics," he said.

"So in some cases, you're limited on what you can take and where the energy is being generated.

"But in most cases, we can incorporate renewables; we build solar fields, solar roads, wind farms etcetera to be associated with the charging infrastructure for our batteries.

"Then we offer close to zero emissions in power generation for the batteries."

Costs

The upfront costs for installing the systems are not prohibitively high, and can be deferred under some payment models, Perry said.

"I always put it in terms of, if the ship costs 1 today, a standard vessel, for whatever your application would be, a hybrid version of that boat could be 1.1, or 1.15," he said.

"A fully electric version would be about 1.4, 1.5.

"What you're seeing now is that that cost is being measured very heavily against payback.

"So if we can generate fuel savings and maintenance savings to turn that extended capital costs into a two-year payback with an eight-year tail of benefits, then the upfront costs become a lot less of a relevant factor in making that decision.

"We also finance a significant volume of our contracts, so that the customer pays for the energy as they use it.

"Instead of the vessel costing one now it might cost point seven, five, and we supply that infrastructure over a ten- or 20-year structure."

Future Outlook

The battery industry is preparing for a significant expansion in maritime demand in the coming years, Perry said.

"By 2030 we [Shift Clean Energy alone] anticipate having about 4 GWh of energy storage in operational use," he said.

"For the industry as a whole, I think that at that point we'll see somewhere in the neighbourhood of 12 to 15 GWh by 2030.

"By 2050, that number is going to grow into hundreds of GWh.

"Right now you've got everybody gearing up to grow their businesses and, as you're gaining sort of universal acceptance for energy storage, everybody's building factories, everybody's investing in the lithium infrastructure and the mining and resource management.

"Everyone's designing and engineering and putting all their products through all the commercial paces of type approval and flag approval."