Samsung and Bloom Make Fuel Cell LNG Tanker Deal
(Bloomberg) -- Samsung Heavy Industries Co. and Bloom Energy have announced an agreement to develop cleaner power for ships by jointly designing fuel cell-powered vessels that will reduce carbon emissions and help improve air quality.
The plan is to initially develop eco-friendly vessels that carry liquefied natural gas and will be among the first in the industry, said Haeki Jang, vice president of shipbuilding and drilling sales engineering at Samsung Heavy Industries. The partners could eventually work to develop this type of power for container ships and tankers.
Samsung Heavy and Bloom, in a statement, said they will replace all existing main engines and generator engines with solid oxide fuel cells over the next several years, investing millions of dollars in the technology. They declined to provide exact figures, citing a confidentiality agreement.
Global greenhouse emissions attributed to maritime operations surpass 2% — greater than those from some large economies. Moreover, said Bloom founder and Chief Executive Officer K.R. Sridhar, “Covid has clearly shown very starkly that, while we have been focused strongly on the [carbon-dioxide] in the atmosphere, in reality the air polluting emissions which cause tremendous harm to our health — our lungs — are particulates: sox [sulfur oxides] and nox [nitrogen oxides] and so on. It’s one of those ignored stories.”
Fuel cells create electricity through an electrochemical reaction without burning fuel; the process means a reduction in particulate emissions of more than 99%, said Sridhar. The cells will help Samsung meet and comply with the International Maritime Organization’s goal to cut CO2 emissions 40% by 2030 and 50% by 2050.
“With the IMO 2030 regulations coming up, we felt the need to take steps to become the leader of providing eco-friendly solutions to customers,” Jang said.
The company — the world's third-largest shipbuilder, with an order backlog worth $23 billion at the end of 2019 — first approached Bloom in spring 2019. A memorandum of understanding was signed, and the two companies started work on a paper design at a very high level, Sridhar said. An approval in principle from various certifying agencies was obtained last September.
“Ever since energy became commercialized, there have been two very strong silos. One is stationary power, for everyday use, and the second is transportation energy,” he said, referring to air, sea and land transport. But in recent years, electrification of transportation is helping to break down the silos by bringing about a confluence.
The companies said a design will be ready to showcase by 2022 that customers could order. It will take two to three years to build, in line with the industry standard in maritime for building a ship, according to Sridhar. The companies anticipate that the market for Bloom’s servers on Samsung Heavy ships could grow to 300 megawatts annually, three years after the vessel is produced, Bloom estimates.
Samsung Heavy and two bigger South Korea rivals signed agreements in early June to build LNG carriers for Qatar Petroleum, the world’s largest producer of liquefied natural gas. The deal, valued at around 70 billion Qatari rials ($19.1 billion), could see them build more than 100 LNG vessels for Qatar.
In the past three years, Bloom has installed fuel cell systems for Korean utilities across South Korea. International work is a big growth area for the company, which also increasingly is taking on projects for U.S. utilities. The work in South Korea put Bloom more squarely on Samsung’s radar.
“Bloom’s technology has already been proven on land projects, which was an important factor in deciding to work with Bloom,” Jang said. “The technology that it uses [is] compact in size but very efficient,” which Samsung sees as highly adaptable for ships.
Bloom now has a dedicated, cross-functional team of engineers working on the maritime project. Shipping companies such as A.P. Moeller-Maersk A/S and Mediterranean Shipping Co. in recent years have invested in scrubbers, which use water to help reduce sulfur emissions on vessels in order to comply with IMO regulations. Jang foresees demand for the promise of cleaner, more sustainable technology.
Dual-fuel engines currently being installed in ships can’t meet the CO2 emissions regulations, Jang said. And, he added, “If they don’t invest in these eco-friendly ships, shipping companies may not get jobs with the oil majors” — a powerful incentive.
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