Opportunities and challenges using performance management to save fuel and ensure compliance

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1 DNV GL MARITIME Opportunities and challenges using performance management to save fuel and ensure compliance Genoa Shipping Week Jarle Coll Blomhoff Genoa, 1 DNV GL 2015 SAFER, SMARTER, GREENER

2 The European Commission has decided to set up a system for monitoring, reporting and verification (MRV) of CO 2 emissions 31 December 2016 Implementing acts adopted 1 January 2018 Begin of first reporting period 30 April 2019 Submitted emission report S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D August 2017 Monitoring plans submitted to verifiers 31 December 2018 End of first reporting period 30 June 2019 Publication of data by EC Ship-owners need to set up reporting system for fuel consumption The European Commission will make the results public 2

3 Data required for MRV can be used to realize fuel savings which is largest lever to reduce total cost of vessel operation Ship operating costs incl. capital expenses, example 1 KNOTS Fuel ~ 28 Cost of passage ~ 5 Voyage related ~44 Cost in port Lubricants/consumables ~ 8 ~ 1 Others ~ 1 Maintenance & repair ~ 10 Crew ~ 6 Total ship costs 100 Fixed operating ~23 On-shore admin Insurance Classification ~ 1 ~ 3 ~ 1 Others ~ 1 Capital cost ~33 Operator s perspective: dwt VLCC Charter USD/day Bunker USD/day dwt VLCC, Middle East Europe trade 30 MW, 300 USD/ton bunker 3

4 knots Several challenges exists before an effective reporting and monitoring system can be used to save fuel Data collection Storage & analytics Decision support Data Server Standard Reports (Automatically provided by system) Manual data Automatically gathered data Key challenges Improve data quality of manual data Installation of sensors on existing vessels Key challenges Structure the data to enable analytics Connect various sources and combine data Database analysis (individual users) Vessel name - January 2013 Key challenges Enable 5 automatic days evaluation of data Speed through water Engine speed Slip Provide decision support against defined targets 40% 35% 30% 25% 20% 15% 10% 5% 4

5 Decision support can be provided by focusing on relevant stakeholder specific and timely data Effective energy management monitoring and reporting Top management Focus on a few, relevant KPIs, providing detailed data in master database for further analysis Fleet Manager Continuously and timely monitor KPIs Superintendent Define stakeholder specific reports/dashboards Provide reference values, e.g. target, sea trial or sister vessel performance 5

6 ECO Insight is the example for a commercially available reporting and monitoring system Public domain industry data Fuel Data Vessel Data AIS Data Weather Data CFD baselines Comprehensive view on fleet performance (voyage, engine & system, hull & propeller) Enriched with additional industry data: weather, fuel-quality, satellite data, Benchmarks against own fleet and market averages Advanced analytics e.g. for hull degradation or normalizations using CFD models Fleet 1 Fleet 3 Fleet 2 Fleet 4 Operations data from customers vessels My dashboard function to customize user specific views and analysis trails Easy to install data collection system for onboard usage (Navigator Insight) 6

7 How to use performance monitoring to save fuel? Irregular speed patterns 1 result in higher voyage consumption Client example: Speed development of a 8,500 TEU container vessel start $147K $124K $140K $93K $70K finish Theoretical savings potential through constant speed: $0.5 m Speed legend knots knots knots 5-10 knots 0-5 knots 0 knots 1. Caused either by weather or crew behavior 7

8 Summary The European Commission will apply the MRV regulation The MRV regulation will require shipping companies to monitor and publish their consumption Data required for MRV can be used to realize fuel savings which is largest lever to reduce total cost of vessel operation Several challenges exists before an effective reporting and monitoring system can be used to save fuel An efficient performance management system will enable you to reduce fuel consumption for your fleet without additional workload 8

9 Opportunities and challenges using performance management to save fuel and ensure compliance Jarle Coll Blomhoff Business Development Leader Maritime Advisory Region Germany and Eastern Mediterranean +49 (0) SAFER, SMARTER, GREENER 9