Gisas Power, the world’s first all-electric tug, has reduced fuel consumption by over 50% (source: Riviera Maritime Media)
High capital expenditure for tugs using batteries or alternative fuels is disincentivising owners from investing in low-emissions vessels
Costs of building and purchasing tugs running on alternative fuels or with onboard energy storage systems remain too high for most owners to invest in them. Tug owners continue to face competitive markets, preventing many from raising prices for marine and towage services.
Owners of oceangoing tugs are tackling rising fuel costs while providing towage under lump-sum contracts and facing competition from offshore support vessels and heavy-lift ships for long-distance transport.
These commercial pressures and low margins are not providing tug owners with the required cash to invest in new tugboats, especially expensive vessels running on alternative fuels or with batteries on board, which is a challenge for technology providers and shipbuilders.
Although there is the promise of lower opex and long-term payback for the additional investment, tug owners do not have the cash flow to make these investments.
“Sustainability is on everyone’s mind, but its consequences have serious commercial implications in the tug market,” says Century Marine Services managing director Steve Dougal.
“The political pressures from the IMO, governments or even local authorities all mean owners are inundated daily with warnings about the need to cut emissions,” he explains.
“But the cost implications for owners, especially in a time of economic unpredictability, are not small, and this makes decision making on new investments problematic.”
There has been a rise in orders for tugboats complying with IMO Tier III emissions standards in the past three years, to lower NOx, SOx and particulate matter emissions.
This is driven by legislation in northern Europe and expectations in more ports worldwide that vessels operating in harbours close to populations will produce fewer harmful pollutants.
But most tugs built still run on diesel and there has only been a trickle of tugboats built with batteries on board or using alternative fuels.
Gisas Power and Sparky are pioneers as the first electric-powered tugs, with at least 5-10, planned to enter service in 2023. Port of Antwerp is about to begin operating its first hydrogen-powered tugboat after its completion in Spain Q3 2022, so the alternative-fuel fleet will gradually increase worldwide.
“They are all exciting developments and have been necessary to prove our industry can do it,” says Mr Dougal. “However, until an alternative comes along that is as widespread and convenient as oil, then commercial concerns over their feasibility are going to remain.”
The cost of building tugs running on batteries /or alternative fuels, such as LNG or hydrogen, are at least 50% greater than constructing tugs powered by diesel combustion engines. There are also fears these higher-price tugs may become redundant before their useful life is completed.
“Tugs are not cheap, and many owners will not want to invest in new tonnage, where there is a risk of not enjoying the usual 20-30 years earning potential over a tug’s working life,” says Mr Dougal.
“They would rather take the least risky route and hold on to their existing vessels for as long as possible.”
This hesitation reduces incentives for builders to invest in constructing electric tugs, although Sanmar Shipyards, Navtek Naval Technologies and Damen Shipyards are ploughing ahead with building the first electric tugs for their own stocks and other owners’ fleets.
There is hope prices for electric-powered tugs and those burning alternative fuels will fall in the long term as more are produced. But many tug owners will not be ready to invest these high sums and will need governments or port authorities to support them.
“Uncertainties remain, especially in terms of cost and new investment, besides the unpredictable external influences of the world economy in a period of profound and fast-moving change,” says Mr Dougal.
“And environmentally, while the industry is heading on the right path, we have yet to find a fuel that has the widespread convenience and commercial practicality of oil,” he comments.
“Owners are struggling to make capital expenditure decisions due to the uncertainties, investment risk and economic turbulence,” he adds. “There is greater attention on alternative fuels and green tugs, but there is no El Dorado of fuel for green towage.”
European owners
Tug owners investing in electric tugs are first movers that others may be forced to follow by international, regional and national regulations.
In Europe, the Fit for 55 environmental regulatory package is proving a headache for tug owners but could also bring benefits as it promotes transporting cargo on inland waterways within the European Union (EU) on low-emissions vessels.
European Tugowners Association secretary general Anna Maria Darmanin says EU’s plans to lower the gross tonnage of vessels affected by the proposed emissions trading scheme (ETS) will be worrying for tug owners. Currently, ETS will be for ships over 5,000 gt trading between European ports or arriving or departing them.
“The European Parliament wants to reduce the gross tonnage of ships involved in the ETS from 5,000 gt to 400 gt,” says Ms Darmanin, adding this would include some of the largest harbour tugs operating in the region.
“In September, 25 non-governmental organisations, companies and trade associations stepped up their lobbying to reduce this from 5,000 gt to 400 gt, which we are really concerned about,” she says.
“We need safe. profitable and sustainable operations, not just worrying about the environment. Owners are careful about their investments and have ambitions to reduce emissions, but we must keep in mind their primary operation is maintaining safety in ports.”
Operational incentives
There are operational and environmental benefits from operating all-electric tugs, even when batteries are backed up by diesel generators. From the limited operational data from current pioneers, it has been demonstrated that all-electric tugs will substantially cut fuel and maintenance costs.
Gisas Power, the first all-electric tug, built to Navtek’s Zeetug30 design, has reduced fuel costs by more than 50%. In its 2.5 years of operation, it has reduced CO2 emissions by 446 tonnes compared with a traditional diesel-powered (MDO) tug.
“If you want to reduce emissions at ports, you need to start with tugs and workboats,” says Navtek Naval Technologies general manager Ferhat Acuner. As evidence, he cited separate studies, with one conducted in the USA indicating tugs and workboats account for 58% of CO2 emissions, and another in Turkey estimating that such vessels were responsible for 76% of CO2 emissions in ports.
In 830 days of operation, Gisas Power showed operating expenditure and maintenance costs were greatly reduced, too. Total fuel costs using an all-electric Zeetug30 were reduced by 50.3% when compared withMDO and maintenance costs fell by 79%. Mr Acuner says the data was derived from comparing the Zeetug30 with a similar diesel-powered tug in the shipowner’s fleet.
Based on the first 2.5 years of operation, battery health was around 99.5% and the quick-charge station would charge an all-electric tug in 52 minutes. According to research and operational results, the battery life would be 15-18 years, compared with initial estimates of 10 years.
