ORKNEY'S ENERGY FUTURE
MARINE TRANSPORT
COSTS
BATTERY FERRIES
The technical analysis found the most feasible and optimal solution was for 11 new battery ferries (9 inter-island and 2 mainland) to be installed into Orkney’s ferry services and a retrofit of the mainland MV Hamnavoe with a battery system.
IMPLEMENTATION TIMELINE
To meet Orkney’s target to fully decarbonise in 2030 [1], a timeline has been proposed which has the twelve battery ferries implemented by 2030 (Figure 1).
Figure 1: Timeline of implementation of battery ferries on Orkney; ferries are decarbonised by the start of the year indicated.
The capital and operating costs arising from this investment have been calculated for the proposed implementation timeline.
The capital cost of the vessel and onshore equipment of the new ferries was based on the e-Ferry Ellen [2]. The battery costs were varied depending on capacity and year of installation. The base cost without batteries totals £12.64m for a new ferry (Table 1). The MV Hamnavoe was built in 2002 hence does not need to be replaced. The cost of retrofit of a similar vessel with a battery propulsion system was approximately £12.62m [3] and this was used for the MV Hamnavoe.
Table 1: Capital cost of aspects of the e-Ferry Ellen [2].
LITHIUM-ION BATTERY COSTS
The cost of lithium-ion batteries is variable in the cost of each of battery ferry; the base vessel and onshore equipment costs are static. The battery cost in 2021 is £434.30 per kWh of capacity, which would be expected to decrease going forwards having reduced from £1,424 per kWh in 2010 [2]. Figure 2 shows the historical cost per kWh of battery capacity as well as a projection over the next 9 years up to 2030 where the cost is forecast to be £181.46 per kWh of capacity [2]. Using this projection, it is assumed that batteries for ferries built in 2030 will be less expensive than those built in 2022 per kWh of capacity.
Figure 2: Cost of lithium-ion batteries per kWh of capacity from 2010 to 2030 [2].
CAPITAL COSTS
The cumulative cost of the twelve battery ferries as they are introduced with the implementation timeline is shown in Figure 3. For comparison, the capital cost of new MGO ferries is shown, assuming the MV Hamnavoe does not need to be replaced. The assumed cost of new MGO ferries were:
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MV Alfred costs £14m [4]
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Other 10 cost £11.06m [2]
The total cost in Table 1 was used with the battery cost for each ferry to calculate the total capital cost of the new battery ferries of £170.5m, compared to £124.6m for the investment in new MGO ferries.
Figure 3: Cumulative capital cost of new battery and marine gas oil ferries introduced in Orkney in line with the implementation timeline.
OPERATING COSTS
The operating costs considered are solely the cost of the fuel. In 2021 all twelve ferries use 8.85 million litres of MGO at a cost of £1.40 per litre [1]. Once all twelve are battery powered in 2030, the calculated annual electricity consumption is 35.8 GWh which is assumed to be at a cost of 17.7p per kWh [5]. Figure 4 shows the operating costs as the battery ferries are implemented. There is a 49% reduction in annual operating cost from £12.4m in 2020 to £6.3m in 2030 once all ferries are battery powered.
Figure 4: Annual operational costs as battery ferries replace the MGO ferries.
New battery ferries were found to have a capital cost of £45.9m greater than marine gas oil ferries but with potential operating cost savings of £6.05m on an annual basis. This would indicate that after eight years the battery ferries would reach financial parity with the marine gas oil alternative, once the full fleet is converted to batteries.
HYDROGEN FERRIES
For the remaining two ferries, the MV Hjaltland and MS Hildasay, where batteries were deemed infeasible, hydrogen was identified as an alternative. These costs were calculated as an estimate and to provide an indication of the level of investment required. They will not be included in the cost to decarbonise the sector due to the technical challenges involved in implementing hydrogen ferries and the impracticality of introducing them by 2030.
The ferries are assumed to be retrofitted with hydrogen storage and propulsive systems. Table 2 shows the maximum daily mass of hydrogen required for each ferry, the size of required electrolyser and the power rating of the current engines, which are assumed to be replaced by a fuel cell of the same rating.
Table 2: Required specifications for hydrogen ferries.
The results of the cost analysis of the retrofit are shown in Table 3, based on the methodology presented in Aquatera’s Low Carbon Ferries Feasibility Study [6] and the values in Table 2.
Table 3: Capital costs of retrofitting two of Orkney’s Mainland ferries with hydrogen propulsion systems.
The cost of hydrogen production per kg is currently variable, depending on the application, electricity source and scale. EMEC research found a cost of £3.83 per kg of hydrogen for Orkney for electricity produced from tidal and onshore wind [1]. The annual hydrogen requirement of 5,992 tonnes would result in annual fuel cost of £23.0m for the two ferries. This is compared to the equivalent MGO cost of £4.7m [1] for 3.35 million litres [8] of MGO showing that far greater investment is required for operation of hydrogen ferries. However, these operational costs would be expected to decrease over time as the cost of electricity from renewables and subsequently green hydrogen decreases.
CONCLUSIONS
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The capital cost of introducing 12 battery ferries to Orkney is calculated to be £170.5m.
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The annual operating cost of the battery ferries is calculated to be £6.3m, once the full fleet is in service.
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The estimated capital cost of retrofitting 2 mainland ferries to operate using hydrogen fuel is £152.3m and the cost of hydrogen fuel is £23.0m at current costs.
REFERENCES
[1] Orkney International Science Festival, "Orkney's Energy Revolution: Hydrogen & Energy Systems," YouTube, 3 September 2020. [Video File]. Available: https://www.youtube.com/watch?v=TCfYGdsSXSc&t=2389s&ab_channel=OISFestival. [Accessed 15 April 2021].
[2] e-Ferry Ellen, "The e-Ferry Ellen Information Package," 2017. [Online]. Available: http://www.conf.eferry.eu/InfoPackage/eFerry_Information_Package.pdf. [Accessed 12 February 2021].
[3] Forsea, "Mercandia 4 to be converted to a freight only vessel," 2019. [Online]. Available: https://www.forseaferries.com/about-forsea/news-and-media/news/mercandia-4-to-be-converted-to-a-freight-only-vessel/. [Accessed 15 April 2021].
[4] C. Watson, "Why are we building gas-powered ships?," BBC, 8 December 2020. [Online]. Available: https://www.bbc.co.uk/news/uk-scotland-51114275. [Accessed 15 April 2021].
[5] E. Yurday, "Average Cost of Electricity per kWh in the UK 2021," NimbleFins, 7 March 2021. [Online]. Available: https://www.nimblefins.co.uk/average-cost-electricity-kwh-uk#nogo. [Accessed 15 April 2021].
[6] Aquatera, "Low Carbon Ferries Feasibility Study," Orkney Islands Council, 2016.
[7] F. G. Aarskog, J. Danebergs, T. Stromgren and O. Ulleberg, "Energy and cost analysis of a hydrogen driven high speed passenger ferry," International Shipbuilding Progress, vol. 67, no. 1, pp. 97-123, 2020.
[8] Aquatera, "Orkney-Wide Energy Audit 2014: Energy Sources and Uses - Addendum," Orkney Renewable Energy Forum, 2015.