OSV owners can use retrofits and upgrades to keep their vessels relevant, retain asset values and standout among peers
In an oversupplied OSV market, ‘future-proofing’ might be the best weapon vessel owners have to compete and ensure they do not get stuck with a stranded asset.
When it comes to future proofing its vessels, Norwegian vessel owner Østensjø Rederi believes it has struck on the right formula. Operating in the offshore oil and gas, renewables and tug sectors, Østensjø Rederi has some 25 vessels in its fleet, all of which are currently operating, with none in layup, according to Østensjø Rederi chief project officer Egil Arne Skare.
Mr Skare made his comments during Riviera Maritime Media’s webinar How can you retrofit your OSV fleet to future proof your competitiveness? The event was produced with the support of premier partner Wärtsilä for Offshore Webinar Week in January.
Mr Skare explained that one of the Norwegian OSV owner’s secrets to keeping its vessels working was to incorporate innovative designs with technical elements to attract utilisation even in a tough market. “Our policy is to future proof to keep operational levels high. This also keeps the vessel value high for its lifetime,” said Mr Skare.
As an example, he cited the company’s first purpose-built vessel, ex Edda Fonn, which was sold to the Royal New Zealand Navy after serving 15 years in the Østensjø fleet. Renamed HMNZS Manawanui, the former IMR, survey and light construction vessel was bought by the New Zealand Government for NZ$103M (US$69M) in 2018. Defence officials choose Edda Fonn as the most suitable option from an initial list of over 150 offshore and subsea support vessels.
“To keep our vessels relevant in a demanding market they usually undergo a midlife upgrade”
Mr Skare said: “To keep our vessels relevant in a demanding market, our OSVs usually undergo a midlife upgrade.” Since 2011, Østensjø newbuilds have been constructed with DC distribution systems. “We are now implementing this closed DC bus principle for our battery retrofit programmes. As we speak, we have two active retrofit projects for battery and shore power upgrades,” he said. The company is building six commissioning service operation vessels (CSOVs) for the offshore wind market, with DNV battery power and shore power notations. These vessels are being built for Edda Wind, owned 50% by Johannes Østensjø dy AS and 50% by Wilhelmsen Holding ASA. All the vessels will be managed by Østensjø Rederi.
Other systems on the Østensjø newbuilds are variable speed gensets, speed-controlled pumps and fans, heat recovery and HVAC systems. For propulsion, Østensjø is equipping its newbuilds with electric Voith Schneider Propellers (eVSP), which incorporate a permanent synchronous motor, reducing system complexity and improving efficiency.
“All systems,” said Mr Skare, “include simple, but novel, energy saving measures. In short, we always bring something new into each and every project we do.”
These systems lay the groundwork for future proofing its fleet. “We are aiming for zero-emission vessels entering the offshore wind market in 2025.”
He explained Østensjø’s newbuild CSOVs in Spain will be hybrid-battery powered, fitted with shore power systems and built as hydrogen-ready.
“All newbuilds are now prepared for hydrogen fuel stored on board in liquid hot organic hydrogen carriers (LOHC),” he explained. Storing hydrogen in an oil is “compelling and very convenient,” he noted, adding, “hydrogen is released on demand for onboard power production.” He said as a result the company has “already established the plan for the midlife upgrade of our newbuilds.”
Joining Mr Skare on the panel was Wärtsilä project services, hybrid sales senior sales support engineer Svein Mannes.
Wärtsilä is supporting Østensjø on several hybrid-battery retrofits, including the offshore construction vessels (OCVs) Edda Fauna and Edda Flora. Each of the OCVs will be retrofit with an integrated hybrid power module from Wärtsilä, with a new electronic DC bus-link, allowing them to operate in DP 2 and 3 modes with a closed DC bus in hybrid, and an open bus on the AC system.
The Wärtsilä integrated hybrid power module combines the engines, an energy storage system, and power electronics, optimised by an energy management system (EMS).
“We are aiming for zero-emission vessels entering the offshore wind market in 2025”
Functioning as the ‘brain’ in the Wärtsilä Hybrid System, the EMS optimises energy flows between the different power sources, storage and consumers, to achieve optimum efficiency.
Mr Mannes said when it comes to battery-hybrid retrofits, one of the best solutions for OSV owners is a containerised solution, which reduces installation time and the impact on cargo space – “the bread and butter of the ship.”
He enumerated the main technical functions of a hybrid-battery solution as peak shaving, spinning reserve and optimised engine operations. Peak shaving allows the operator to use battery power to reduce peak loads on the engines, minimising “the wear and tear on the engines,” said Mr Mannes.
In the case of optimised engine operation, engines can be taken offline. “This will require a cycling of the batteries, which in turn reduces the lifetime of the batteries. So, the benefits must be carefully evaluated against the battery cost,” he cautioned.
Owners need to standout
“One of the incentives to performing a vessel retrofit or upgrade is to standout,” noted panellist Arnstein Eknes, DNV OSV and special ships segment director.
He said the challenging conditions over the last six years created by oversupply in the market created a highly competitive situation. This allows “those in the market to cherry pick the very best vessels out there,” said Mr Eknes.
Other factors in play include tightening regulations, with IMO aiming to decarbonise “fast” and the European Union “even faster.” This means that “charterers are moving towards solutions that are future-oriented and decarbonised and that banks are doing the same,” said Mr Eknes, also noting efforts such as the Sea Cargo Charter agreement and Poseidon Principles.
These factors are driving interest in two areas onboard: energy and digitalisation.
In the case of energy, owners are investing in battery upgrades, but this does not make sense for all, said Mr Eknes. “It really depends on your operational scenario, how much you can save in energy and how much you can save maintenance. When an owner is saving fuel, it’s is mainly creating an added value for the charterer. The benefit of the fuel saving is not directly coming into the pocket of the owner; someone else is paying for the fuel.”
Addressing decarbonisation, Mr Eknes said there was a “big shift” towards alternative fuels, noting that while there is no “silver bullet,” hydrogen will be part of any solution, possibly carried as ammonia. “My message to you is that new alternative fuels are coming and retrofitting, and modularisation, are part of the solution.”
As for digitalisation, Mr Eknes said it presents multiple opportunities for owners. “What can we do when the ships are connected? What can you do when you can not only see a fleet of vessels but also systems, components and engines?” He said this visibility offered opportunities to rethink maintenance planning. “It allows you to make more decisions from shore; to analyse, prepare services, support your crew.” He said using digital tools, owners can save energy and offer more transparency, making “you stand out among your peers.”