Smart Green Shipping Alliance partners with Drax and Ultrabulk to cut shipping supply chain emissions - Drax

Smart Green Shipping Alliance partners with Drax and Ultrabulk to cut shipping supply chain emissions

A group of companies has come together to find new ways of cutting carbon emissions and costs from the shipping industry.

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Publication of Circular and Notice of General Meeting in relation to proposed acquisition of flexible, low-carbon and renewable UK power generation from Iberdrola
5th December 2018

Publication of Circular and Notice of General Meeting in relation to proposed acquisition of flexible, low-carbon and renewable UK power generation from Iberdrola

On 16 October 2018, Drax Group plc (“Drax” or the “Company”) announced that it had entered into a binding conditional agreement to purchase Scottish Power's portfolio of pumped storage, hydro and gas-fired generation for £702 million in cash from Iberdrola (the “Acquisition”).

Drax, operator of the UK’s largest power station, is partnering with the Smart Green Shipping Alliance (SSGA), leading dry bulk cargo transporter Ultrabulk, and Humphreys Yacht Design, naval architects of Dame Ellen McArthur’s ‘Kingfisher’ yacht, to tackle the mounting issue of CO2 emissions from the shipping industry.

A £100,000 12-month feasibility study funded by InnovateUK, the Institution of Mechanical Engineers (IMechE) and private investors has begun, which will examine the potential of fitting an innovative sail technology called Fastrig onto Ultrabulk ships importing biomass into the UK, for cutting both carbon emissions and costs.

The shipping industry emits roughly 3% of global CO2 and other greenhouse gas emissions (CO2-equivalent), or approximately 1 billion tonnes of CO2 and other GHGs per year.  That’s over twice as much as the UK’s total emissions, from all sources.

Drax Power Station in North Yorkshire has transformed its business having converted two thirds of the power station to use biomass instead of coal – it is now Europe’s biggest decarbonisation project. Last year, it imported 6.8 million tonnes of the compressed wood pellets in 221 deliveries to the ports of Immingham, Hull, Tyne and Liverpool, to enable it to generate 14% of the UK’s renewable electricity.

Using biomass at Drax has delivered carbon savings of more than 80% compared to coal – this includes supply chain emissions, but shipping remains one of the most carbon intensive parts of the biomass supply chain. Drax’s desire to drive down emissions even further enabled Smart Green Shipping to partner with an ‘end user’ looking for the lowest carbon cargo provider.

Diane Gilpin, CEO and Founder of Smart Green Shipping Alliance said:

“This is a project that could really make a difference to the way the industry operates. Drax’s determination to cut carbon emissions creates real demand. Reducing emissions is good business, it saves costs and improves long-term operational certainty. This study aims to find the ‘sweet spot’ between reducing emissions and saving fuel costs.

“We’re engaging across shipping, working with port owners, shipbuilders, cargo owners’, and financiers to design pragmatic and effective new systems solutions. The prototypes we’re looking to develop are really exciting. A 21st century sailing-hybrid ship will look as much like the Cutty Sark as a Tesla does a Model T Ford.”

Gilpin is an expert on the UK government’s Clean Maritime Council, which will devise a strategy to reduce emissions from the shipping sector.

UK Shipping Minister Nusrat Ghani said at the Council’s inaugural meeting:

“The Clean Maritime Plan will bring new opportunities for Britain’s businesses to design, develop and sell green solutions to this global challenge.”

Drax Group CEO Will Gardiner said:

“Smart Green Shipping Alliance’s pioneering efforts to deliver cleaner, greener transportation could help achieve the clean growth required for the UK to meet its climate targets. If we’re serious about meeting those targets, decarbonising transportation is the next big challenge.

“The combination of green shipping with renewables makes an even greater contribution to decarbonisation globally. This is a key development in achieving Drax’s aim – to deliver a zero carbon, low cost future for all.”

The innovation leads on the project, Rob and Tom Humphreys of Humphreys Yacht Design, explained how their team’s background in ocean racing has helped them to make technical advances in an industry that has used the same technology for the past century.

Tom said, “Transferring knowledge and technologies from offshore yacht racing to improve the performance of commercial merchant ships mirrors the way Formula One drives design development in the automotive industry.

“We’ve worked on America’s Cup and Volvo Ocean Race campaigns, competing at the highest level. Applying this technology to the commercial shipping industry means that we are able to make very significant fuels saving advances”, said Rob

The first six months of the project will be a technical feasibility study, establishing the mechanical parameters for retrofitting the Fastrig solution onto ships. The next six months will focus on putting together a business case and calculating detailed costings for the project.  The aim is to retrofit a ship with the Fastrig technology – depending on the outcome of the feasibility study, the launch of the Commercial Demonstrator could be done as soon as 2021.

The technology could drive down not only carbon emissions but also cost. Diane Gilpin explained, “Fuel prices are vulnerable to oil market volatility, but once the technology is developed, wind is free at the point of use.  The first onshore wind turbines were single devices producing 45KW; now we’re seeing fleets of 10MW producing energy, without subsidy. We can expect to mirror that speed of transition in the shipping industry.”

The SGSA has been pioneering the uptake of renewables in the maritime industry since 2014, identifying wind power as the first choice of exploration. The long-term aim of the company is to develop commercially viable, zero-emission vessels. The eventual aim is to combine renewable energy from wind power with bio-fuels.

Per Lange, CEO of Ultrabulk said:

“We are very much looking forward to working with our partners at Drax and Smart Green Shipping Alliance. The feasibility study initiated is very much in line with the environmental focus of Ultrabulk and the shipping industry at large.

“We have made considerable improvements to NOx and SOx emissions; the latter being the focus as in 2019 the SOx emission has to be reduced by 85 per cent. As an industry we are under way to deliver on these limits, but we shall naturally not stop there.

“CO2 still needs to be reduced. As well as the Shipping Industry’s commitment through International Maritime Organisation targets, Ultrabulk is committed to achieving significant additional reductions. The Smart Green Shipping Alliance is an exciting step in that direction.”

Dr Jenifer Baxter, Head of Engineering, IMechE said:

“This is an exciting project that addresses one of the more difficult decarbonisation challenges and represents the ingenuity of engineering that the Institution of Mechanical Engineers seeks to support.

“Shipping has been a part of our global transportation system for hundreds of years moving through wind and man-power to coal and diesel power. This project presents a new phase taking us full circle forward again to wind power, leading the way with state-of-the-art power and engine technologies enabling shipping to remain relevant and commercially viable in an increasingly low-carbon world.”

ENDS

For more information contact:

SGSA: Diane Gilpin, 07768 312176, digilpin@smartgreenshippingalliance.com

Drax: Jessica Gorton, 07712677177, Jessica.gorton@drax.com

HYD: Rob Humphreys, 01590 679344, rh@humphreysdesign.com

Notes to Editors

The International Maritime Organisation, the London-based specialist UN agency responsible for the safety of shipping and its environmental impact, in April this year reached a landmark greenhouse gas agreement, which set two key goals: Greenhouse gas emissions from shipping to decline by at least 50% by 2050, compared to 2008 levels, and as an interim goal carbon intensity of shipping to decline by 40% by 2030. The International Chamber of Shipping has said the future of the sector lies beyond fossil fuels, and that the IMO agreement sends a strong signal for the development of low and zero carbon propulsion technologies in the shipping sector.

Smart Green Shipping Alliance

  • Established in 2014 with the purpose of commercialising renewable energy for the global shipping sector
  • SGSA accelerates commercially viable solutions through transferring technology and knowledge from offshore yacht racing, F1, renewable energy, aviation and defence to complement deep commercial maritime expertise. It includes the Institution of Mechanical Engineers (IMechE), Humphreys Yacht Design, Lloyds Register, Group Partners, University of Southampton, University College London, Tyndall Centre for Climate Change, Willis Towers Watson, Cammell Laird and Capital Law.
  • Founder/CEO sits on the newly created Clean Maritime Council
  • Advisory Board: Dr Jenifer Baxter, IMechE; Baroness Bryony Worthington, Environmental Defense Fund, and architect of UK climate policy; Professor Jingjing Xu, maritime commerce Plymouth University; Peter Hinchliffe CBE, former Secretary General, International Chamber of Shipping.

Humphreys Yacht Design

  • Rob & Tom Humphreys head up a team of highly talented and experienced naval architects and yacht designers in a studio that boasts one of the most diverse design portfolios.
  • Successful projects include multiple award winning Superyachts (such as the 37m MY Ermis² and the 38m Ketch Cyrano de Bergerac), America’s Cup, Vendee Globe, Global Challenge and Whitbread / Volvo Ocean Race yachts.
  • The Studio also has well over 3000 production yachts to its name.

For more information visit: www.humphreysdesign.com

Drax Group

  • Drax operates the largest power station in the UK, based at Selby in North Yorkshire. Since converting four of its six generating units to use biomass instead of coal, it has become the biggest renewable power generator in the country, producing enough renewable electricity for four million households.
  • As well as the engineering skill and expertise needed to convert the power station from coal to biomass, the team at Drax also had to create an entirely new global supply chain to provide the quantity of biomass required to fuel its boilers – the majority of which comes from North America and Europe.
  • Its biomass generating units deliver carbon savings of more than 80% compared to when they used coal – this includes supply chain emissions.
  • It is committed to reducing its emissions further and helping other businesses to decarbonise through its B2B electricity supply businesses, Haven Power and Opus Energy, which provide 100% renewable power to more than 350,000 business sites.
  • Drax is starting an innovative Bioenergy Carbon Capture and Storage pilot later this year which could help the power station deliver negative emissions, meaning the power it produces will help reduce the amount of carbon dioxide accumulating in the atmosphere – vital for global efforts to tackle climate change.

Ultrabulk

  • Ultrabulk Shipping is a dry bulk cargo shipping business.
  • The company’s vessels transport cargos including scrap, bio fuels, iron ore, grains, minerals, and sugar.
  • Ultrabulk operate a fleet of Handysize, Supramax, and Panamax vessels.
  • The company was founded in 1891 and is headquartered in Copenhagen, Denmark.

IMechE

  • Founded in 1847 in Birmingham, with the original statement of purpose: “To give an impulse to invention likely to be useful to the world”
  • 120,000 members globally

For more information visit www.imeche.org

InnovateUK

Innovate UK drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas.

We connect businesses to the partners, customers and investors that can help them turn ideas into commercially successful products and services and business growth.

We fund business and research collaborations to accelerate innovation and drive business investment into R&D. Our support is available to businesses across all economic sectors, value chains and UK regions.

Innovate UK is part of UK Research and Innovation.

For more information visit www.innovateuk.ukri.org