WinGD sees LNG as future for industry

“We think LNG is the future. LNG-fuelled vessels have lower greenhouse gas emissions, and superior Sulphuric Oxides (SOx) and particulate matter (PM) emissions, so the environmental advantage for LNG are clear, both in terms of current and future environmental regulations,” Stiefel said, noting increasing pressure from industry regulators to restrict other environmental emissions, such PM, Black Carbon and volatile organic compounds (VOCs).

Focusing on WinGD’s low-pressure Otto cycle based dual-fuel engine technology, Stiefel noted that Nitrogen Oxides (NOx) emissions were well within likely future targets. WinGD X-DF engines operating on LNG reduce a cargo vessel’s emissions by 99% for SOx, 90% for NOx, 99% for PM and about 18% for Greenhouse gases.

“We think exhaust gas control systems have a place, extending the life of existing vessels in the market, but they are a short-term solution at best. They cannot represent the future as they actually increase overall CO2 emissions because of the additional energy consumption of running the abatement technology,” Stiefel said. “For newbuildings, scrubber installation is a short-term financial engineering fix.”

Stiefel was equally outspoken about the range of alternative fuel options being presented to the market. “We have conducted research into a range of alternative fuels ourselves and think that there may be a place for them in the future looking towards 2030 and 2050 onwards. But we need to come together as an industry around one solution to present to shipowners.”

“LNG is the obvious choice now and over the coming 10 to 15 years – it is based on existing engine technologies, dual-fuel engines have been in service for years, the shoreside technology and infrastructure exists, and it doesn’t rely on technological innovations in containment technology.”

Environmental regulation

Such concerns need to be factored in when ship owners make purchasing decisions. The rapid expansion of infrastructure means that concerns about LNG bunker fuel availability have receded, while emerging price differentials against existing bunker benchmarks will help cost management.

“Future environmental regulation remains the key variable for ship owners to monitor,” Stiefel argued.

The Energy Efficient Design Index is also likely to tighten further after 2025. However, Stiefel warned the scope for further efficiency improvements in diesel engine design is decreasing. The thermal efficiency of WinGD’s latest X82-B engines, which feature upgraded power density, and improved fuel consumption characteristics, is now 50% and has reached 56% for part-loads.

“Given the high efficiency of these engines, and the long-term trend of 3% efficiency gains every 5-8 years, further transformational improvements in diesel engine efficiency will be hard to achieve,” Stiefel explained. The market may need to accept smaller engines, and reduced navigation speeds.

LNG market

Returning to the LNG market, demand for LNG-fuelled engines has continued to grow robustly: dual-fuel orders accounted for almost 30% of all two-stroke orders in 2018, measured on a MW output basis.

Industry analysts, such as Clarksons, expect the overall share of dual-fuel engines within the marine propulsion market will continue to grow until 2026, as new orders for dual-fuel engines outpace the overall market.

The growth in demand for dual-fuel engines has been welcomed by WinGD, which received a 60% market share of dual-fuel engine orders placed in the last year. “We had received over 150 orders for our new X-DF engine by the end of last year, and market feedback has been highly complimentary about its operational performance,” Stiefel added.

Stiefel noted that the dual-fuel engines have become a significant part of WinGD’s overall orderbook, accounting for 30-40% of overall orders in 2018. While LNG carriers continued to account for around 70-80% of orders for X-DF engines received in 2018, the growth of interest from other market segments, such as bulk carriers, was as encouraging as they represent significantly larger potential markets.

Some of the interest is being driven by the extension of the X-DF product portfolio: WinGD is expected to make its first deliveries of its new X92DF engines in July 2019. The company has received a number of high-profile orders for its new X-DF engines, such as an order by Korean dry bulk operator H-Line Shipping for two 180,000-dwt, LNG-powered bulk carriers in July 2018 with options for up to 20 further orders.