Tanker owners should reconsider retrofitting older vessels as high asset values make extending their working lives more attractive, according to wind propulsion firm BAR Technologies.
“With a 15-year-old tanker now worth more than a new one, owners have demolished their own favourite argument against retrofitting older ships,” John Cooper, CEO of BAR Technologies, said in an emailed statement on Tuesday.
Shipbroker Poten & Partners values a VLCC available for prompt delivery at around $235 million, compared with approximately $130 million for a newbuilding due in 2029. A 15-year-old VLCC could command around $140 million.
“The argument against retrofitting older ships has always been that it’s not worth spending money on a vessel near the end of its life,” Cooper said.
“Well, the market has just put a $140 million price on a 15-year-old tanker. You can’t value a ship like that and then tell me it’s not worth improving.”
BAR Technologies estimates that installing five 37.5 m WindWings on a VLCC operating on a typical US-Japan route could save around 2,670 mt/year of fuel, worth about $2.27 million at an assumed VLSFO price of $850/mt.
The estimated payback period is four years based on fuel savings alone.
Wind propulsion can also reduce CO2 emissions and potentially improve a vessel’s Carbon Intensity Indicator (CII) rating.
The technology has been retrofitted on bulk carriers Pyxis Ocean and Berge Olympus. DNV recorded up to a 32% reduction in main engine energy use on Pyxis Ocean under favourable conditions.
“Shipping has spent ten years telling itself that decarbonisation happens on the order book,” Cooper said. “The order book is full until 2029. The ships that have to burn less fuel this decade are the ones sailing now.”
