by Dimitrios V. Lyridis, Director of the Laboratory
for Maritime Transport School ,
National Technical University of Athens
Greece boasts one of the longest coastlines in the world and about 6,000 islands. Short distance shipping (SSS) is essential for movement of cargo and passengers to and from the mainland. SSS represents more than 70% of goods transported by sea in Greece. Yet, the industry of short sea shipping struggles financially and green transition is seen as one more burden to carry.
Under the strong pressure from the decarbonisation imperative and the current energy crisis that has caused ferries’ ticket prices to skyrocket, the SSS industry seeks alternatives to conventional ferries. Electric ferries are seen as a possibility and relevant projects are underway. Dimitrios Lyridis, Director of the Laboratory for Maritime Transport at the School of Naval Architecture and Marine Engineering, presents the pros and cons of such an alternative.
Is the idea of an electric ferry feasible in Greece?
Technically, there are very few challenges to be overcome. These are limited to the capacity of the electric grid of the port that will charge the vessel (electric bunkering), to the interconnection of ship to shore and to some technical issues onboard. The major problems are financial as the capital expenditure is high, especially with respect to the batteries and the battery management system that may reach or exceed the cost of the actual vessel. They are also legal/regulatory as the regime for buying and selling electricity by ports (to ships) has still to be finalised. Until these issues are successfully resolved and appropriate motivation on behalf of the state has been put in place, the realisation of a battery-operated ferry will remain a distant dream.
How important are such solutions for the short distance shipping in Greece?
In Greece, we have many short connections of a distance of around 3 to 15 or 20 (sea)miles (1 mile is approximately 1.84 km). These are the optimum distances for ferries with electric propulsion (batteries). The operating costs of such ferries are much lower than the ones with conventional fuels. Given also the fact that the requirements in terms of electric power are not high, the city/port electric grid can support the capacities required.
Are there any relevant projects underway in Greece?
For the time being, there are at least two commercially driven projects under development. However, as the capital required for such investment may reach twice the capital required by a conventional ferry (already marginally profitable if at all), their realisation will very much depend on the appropriate funding being secured.
Is financing for such projects difficult to secure? Is there something the state could help with?
Unfortunately, due to state aid rules (General Block Regulation) and general EU policy, vessels in general cannot be funded but in exceptional cases and under very specific conditions (related to environmental and social circumstances). But for ferries for these connections, the criteria are only rarely (if at all) met.
Are stakeholders in close cooperation to find solutions to the green transition of shipping?
Currently, shipping stakeholders such as shipowners, charterers, cargo owners do not cooperate in order to promote shipping interests. Instead, they react to new regulations and developments usually way too late. But not all stakeholders have the same goals. Cargo owners, for example, seek lower freight rates, but ship owners seek higher ones. Their interests are apparently dissimilar. Still, both aim at efficient transportation.
Many times, shipowners and ship operators react either too late or a priori negatively to any new regulation or evolution. This is understandable because most of the time the regulations are imposed by institutions external to shipping with benefits to the general public, but vessels are expected to bear the cost required for compliance. On the other hand, a more active role of the shipping community at the time these regulations are drawn and at the political level these decisions are taken will both make compliance much more acceptable, but also its implementation much more realistic. Greece with the largest fleet in the world (around 20%) and in the EU (almost 60%) could play an important role in this area and in my view should treat the new environmental trends as an important opportunity for even further expansion and influence.
The Norwegian example
The world’s first electric car and passenger ferry, Ampere, went into commercial operation in 2015 in Norway. The country, foreseeing the drastic changes in European fuel regulations, built a strong electric ferry shipyard industry and currently has about 70 electric ferries in its national fleet, drastically reducing both the air and noise pollution the conventional ferries caused. The all-electric, battery-powered ferries do not emit greenhouse gases or particulates, and their noise emissions are substantially lower than diesel-powered ferries.
According to the Norwegian government’s plan, the entire ferry fleet will be electric, hybrid or hydrogen by 2025. The world’s first hydrogen ferry will be launched again in Norway in 2023.
In Norway, when electric ferry construction began, the additional investment cost of replacing diesel ships with fully electric ones amounted to a total of €357 million, including network upgrades in remote areas, but the potential cost savings were significant.
Calculations show that, over a 10-year period, operating savings from electric ferries amounted to €71.4 million per year. Through the state agency ENOVA, the Norwegian government has financially supported 42 ferry services, 53 electric ferries and 623 electric buses (total cost €132.5 million).
This article is published in the May/June 2022 issue of Greek Business File, available here.