Rise In Need for Energy Efficiency
The growing emphasis on energy efficiency is a major factor driving the growth of the marine variable frequency drive market. In order to achieve the marine industry's target of reducing energy consumption while improving operational efficiency, marine VFDs have emerged as a critical solution. These devices optimize the performance of electric motors and minimize energy wastage.
By regulating the frequency and voltage of the power supplied to the motor, marine VFDs enable precise control over motor speed and torque. This control allows vessels to operate at different speeds and power levels, ensuring that energy is utilized efficiently. Moreover, a significant portion of power generated on board ships, around 60%, is consumed by motor pumps. The traditional control methods, such as turbines, control valves, and hydraulics, are commonly used to manage the pumping systems in marine applications. However, the average pumping efficiency of these systems is typically below 40%.
This presents a significant opportunity to enhance energy efficiency in marine pumping systems. Moreover, a 10% reduction in pump speed can lead to 27% decrease in power consumption. Thus, variable frequency drives play a key role in achieving these energy savings by adjusting the frequency of power supplied to the motor, thereby altering its speed.
Variable Frequency Drives offer precise control over speed, pressure, and flow, allowing for substantial energy savings of up to 50%. The energy saving potential of VFDs varies depending on their specific application. In case of variable torque applications like pumps fans simply reducing the speed can result in significant energy consumption reduction. Fans and pumps fall under the category of variable torque applications, where torque increases exponentially with speed. By operating motors at reduced speeds, the torque requirement decreases, leading to lower current and energy consumption.
It is common for fans and pumps on ships to be over-capacity, which provides an opportunity to operate them at reduced speeds. As a result, the demand for VFDs in such applications is driven by the potential for energy savings and improved efficiency.
Moreover, the demand for energy efficiency in the maritime industry is driven by various factors. Firstly, reducing energy consumption leads to cost savings for ship owners and operators. By optimizing the usage of energy, VFDs help lower fuel consumption, resulting in reduction in operational expenses. Additionally, variable frequency drives can extend the lifespan of equipment by reducing wear and tear, leading to lower maintenance and replacement costs.
In addition, the need for energy efficiency in the marine industry is also influenced by the environmental concerns. With a strong emphasis on minimizing the marine industry's ecological footprint and reducing its carbon emissions there is a growing need for the adoption of sustainable practices. One of the major technical measures adopted in this regard is the Energy Efficiency Design Index. It promotes the use of energy efficient equipment and engines in the design of new ships.
By establishing minimum energy efficiency standards based on the capacity mile requirements of different types and sizes of ships, the EEDI aims to reduce pollution and enhance overall energy efficiency.
Furthermore, in 2021, the International Maritime Organization (IMO) announced its commitment to adopting energy efficiency measures to decrease the carbon intensity of international shipping by 40% in 2030 compared to 2008 levels. This highlights the industry's determination to address climate change and achieve significant reductions in greenhouse gas emissions.
Thus, marine variable frequency drives play a vital role in these efforts by enabling ships to operate more efficiently and consume less fuel. By reducing the energy consumption, variable frequency drives contribute to reduced greenhouse gas emission supporting the transition towards a greener and more sustainable maritime industry. Consequently, the increasing demand for CO2 reduction and energy efficiency in the maritime sector is expected to drive the demand for variable frequency drives used in marine vessels in the foreseeable future.
Growing Shipbuilding Industry
Marine transportation is an essential component of the global trade accounting for 90% of the total trade worldwide. With the growing trade activities worldwide the demand for energy efficient ships is also anticipated to witness growth over the forecast period. Thus, the growing shipbuilding industry is a significant driver behind the increasing demand for Variable Frequency Drives (VFDs) in the marine sector.
Additionally, the expansion of the shipbuilding industry is fueled by factors such as lower energy costs, longer equipment life, and lower maintenance requirements. This growth is particularly prominent in the Asia-Pacific region, where strong economic expansion and government policies supporting the shipbuilding industry, especially in countries like China, contribute to the market expansion.
The Government of India has implemented a Financial Assistance Policy for Indian shipyards, amounting to USD 483.5 million, over a period of 10 years, specifically for contracts awarded between April 1, 2016, and March 31, 2026 which is further extended to 2047. Under this policy, Indian shipyards will receive financial assistance equivalent to 20% of the lower value between the Contract Price and the Fair Price for each vessel constructed by them. However, the assistance rate of 20% will gradually decrease by 3% every three years.
Additionally, in 2021 the parliament of Japan passed several laws aimed at improving the competitiveness of local shipbuilders against those in South Korea and China.
Under the laws the government announced to provide subsidies, tax incentives, and loans at low rate of interest to shipbuilders provided the ministry of infrastructure, land, and transportation approves their business plans. Moreover, the government will also provide financial assistance to the local companies ordering ships built by firms with government approved business plans. Thus, the favorable policies for the shipbuilding industry are anticipated to drive the growth of shipbuilding which in turn will result into driving the demand for VFDs used in these ships.
Furthermore, the stringent regulations for the reduction of greenhouse gas emissions and more efficient fuel utilization have fueled the growth in demand for VFDs. These regulations are pushing shipbuilders and vessel owners to build and adopt technologies that can help meet these requirements.
According to the United Nations Conference on Trade and Development, China accounts for 44.2% of the total ship builds globally in the year 2021. China, being the most populous country globally possessing the largest economy based on the purchasing power parity, boasts a growing shipbuilding industry. This shipbuilding industry is responsible for the production of various types of tankers, vessels, including gas carriers, and container vessels. However, the largest shipbuilding facilities in China such as China State Shipbuilding Corporation and China Shipbuilding Industry Corporation are government-owned resulting into increased government support to the industry.
Moreover, Japan and South Korea are other major shipbuilding countries. This growth in the shipbuilding industry is due to the presence of major shipbuilding players such as Hyundai Heavy Industry, Daewoo Shipbuilding, Marine Engineering, Samsung Heavy Industry, Mitsubishi Heavy Industries Ltd, and Sumitomo Heavy Industries in these countries. Thus, the advancing demand for shipbuilding is anticipated to drive the demand for VFDs used to control and manage the speed and power supply to electric motors used for propulsion purposes in almost all machinery systems in ships.
The increasing emphasis on energy efficiency and environmental sustainability is driving the adoption of variable frequency drives in marine applications, as they optimize performance and reduce operational costs.
U.S. Department of Energy
