Total Costs Of Ownership For Methanol-Fueled Containership Designs

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DNV’s “Alternative Fuels for Containerships” guidance paper has been updated to include engineering aspects and a detailed commercial case study for a methanol-fuelled 5,500 TEU containership. This update reflects the increasing interest in methanol-powered vessels, with a significant rise in orders observed in recent years, says an article published on dnv website.

Summary

  • DNV’s updated guidance paper highlights a significant increase in the adoption of methanol-powered vessels, with 267 confirmed ships in operation or on order, primarily in the container segment.
  • A commercial analysis for a 5,500 TEU methanol-fuelled containership was conducted, comparing total cost of ownership (TCO) for different design variants: conventional fuel, dual-fuel methanol-ready, and dual-fuel methanol-fuelled.
  • Key cost factors identified include capital investments, financing costs, operating expenditures, fuel costs, and fuel-related carbon costs, with uncertainties in future fuel and greenhouse gas costs influencing overall costs.
  • Assumptions regarding IMO regulations, fuel price predictions, and CO2 pricing scenarios were made for the analysis, providing a basis for evaluating TCO under different conditions.

Steep Increase In Methanol-Powered Vessels

According to DNV’s Alternative Fuels Insight (AFI), there are currently 267 confirmed methanol-fuelled ships in operation or on order, with the majority in the container segment. Methanol has emerged as a leading alternative fuel option, with 138 ship orders in 2023, primarily in the containership segment.

Commercial Analysis For Mid-Sized Containership

DNV conducted a commercial analysis for a 5,500 TEU methanol-fuelled containership, comparing total cost of ownership (TCO) for different design variants: conventional fuel, dual-fuel methanol-ready, and dual-fuel methanol-fuelled. The analysis includes evaluations for various fuel price scenarios over a vessel’s operational life cycle of 20 to 25 years.

Key Cost Factors Identified

The analysis covers all cost components, including capital investments, financing costs, operating expenditures, fuel costs, and fuel-related carbon costs. Uncertainties in future fuel and greenhouse gas costs are identified as key factors influencing overall costs.

Assumptions And Scenarios

DNV based its analysis on assumptions regarding IMO regulations, fuel price predictions from the DNV Energy Transition Outlook, and CO2 pricing scenarios. These assumptions provide a basis for evaluating the TCO under different conditions.

Comparison Of Design Variants

Under these assumptions, the TCO for the methanol-fuelled containership is comparable across all design variants, with a slight increase for methanol-powered vessels. However, the flexibility offered by dual-fuel methanol vessels comes at little or no extra cost compared to conventional oil-fuelled vessels.

Break-Even Daily Rate

Considering 350 days of operation per year, the break-even daily rate for the vessel ranges between USD 52,000 and USD 60,000 at the beginning of service, depending on fuel price scenarios.

Carbon-Neutral Fuel Variants

Carbon-neutral fuel variants are expected to incur additional costs over time due to the growing amount of blend-in fuel required to comply with emission regulations.

Methanol-Ready Design

The initial CAPEX for a methanol-ready design is slightly higher than for a conventional design but allows for future fuel system installation, reducing risks and costs associated with future fuel switches.

Future Considerations

As decarbonization ambitions increase, future fuel choices should account for stricter regulations and potential additional costs. The guidance paper provides decision support for various aspects, aiding stakeholders in making informed decisions.

Conclusion

DNV’s updated guidance paper offers valuable insights into the total costs of ownership for different methanol-fuelled containership designs, aiding stakeholders in navigating the complexities of alternative fuel adoption in the maritime industry.

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Source: dnv