Energy demand and supply growth

Increasing demand for and supply of energy

Worldwide in 2030, the majority of the required energy will still be produced from fossil sources. There will be a nearly equal share between coal, oil and gas. Largest growth rate, however, will be seen for alternative energy sources.

Based on an increase of oil price in the long-term, the trend for exploration of fossil energy sources will continue to offshore locations rather than onshore and to deeper waters and also harsher environments. Also, more complex energy sources such as tar sands or methane hydrates will be exploited.

Energy production on offshore wind farms will significantly increase and also other water-based energy production devices using wave and tidal current energy will have a larger market.

The world primary energy production grows at 1.5% p.a. from 2012-2035. The region Asia Pacific provides 47% of the increase in global energy production. There will be a similar share of fossil energy consumption between oil, gas and coal, these remaining to be the main energy sources. While energy consumption will grow marginally for OECD countries developing countries will increase their energy consumption by approximately 75%.

All waterborne sectors
[The trend for increasing exploration of fossil energies in deeper waters and harsher environments requires an oil price level of 80-100 $/barrel for such enterprises to be profitable. While currently the oil price level has declined significantly it is expected that in the mediate term it will rise above a profitable level again.]

Concerns about the environmental impact of the current energy system in combination with an expected long-term increase in oil prices, increasing concerns about the geopolitical situation in major energy producing countries in combination with the EU target to increase energy autarchy and in particular, by 2030, to have a 27% share of renewable energies in the energy mix, will result in an increasing diversity of energy sources in all waterborne sectors.

With the aim of reducing greenhouse gas emissions in the EU and globally, the production, consumption and transport of “clean” fuels such LNG, methanol, hydrogen, bio fuels will increase significantly.

The trend for exploration of energy sources in deeper waters and harsher environment will require development of ships and production platforms capable of operating in these areas in the most safe, efficient and environmental friendly way and relevant infrastructure development for supporting, monitoring and maintaining the assets.

Maritime-specific
With the global aim at reducing greenhouse gas emissions environmental metrics such as SEEMP, EEDI will be further developed and become stricter and the number of ECAs will further increase. This will require ships to become for environmental friendly and energy efficient. Hybrid propulsion systems, using alternative energy sources, hydrogen in fuel cells and “cleaner” fuels in combustion engines will address this trend.

The volatility in oil and gas prices will lead to the need of “future-proof” vessels, which have built-in a design flexibility to allow for easy retrofitting and adjustments of propulsion plants in accordance with market conditions and regulatory requirements.

A high oil price level and the pressure on emission control will result in an increased transport of natural gas and other “clean” fuels around the world. With the U.S. shale gas revolution LNG exports will increase from the U.S. to Asia Pacific and other markets, where gas prices are much higher than in the U.S.

Current gas tanker sizes will increase due to economy of scale effects and the enlargement of the Panama Canal allowing VLGC (very large gas carriers) to cross. The increasing tanker size will need new tank technologies to be developed.

Blue economy-specific
The pressure to reduce fossil energy sources from the energy mix will increase the production of renewable energy significantly. Offshore wind farms and floating energy devices for wave, tidal current and ocean thermal energy conversion (OTEC) plants will significantly increase in number and size.

The significant increase of offshore wind energy production, the need for wind energy buffers and the trend for “clean” fuels for ships and other transport devices will result in developments to transfer wind energy on platforms into other sources like hydrogen. Platforms will need to have gas storage and transfer-to-ship facilities as well as bunker facilities for ships using hydrogen as fuel.

Increasing awareness of environmental impact of offshore production facilities will require that the industry follows higher environmental and safety standards.

Infrastructure-specific
With the increase in production and consumption of alternative fuels like LNG and hydrogen the infrastructure in ports need to be developed covering storage facilities for further distribution with ships and other transportation means, charge and discharge facilities for tankers, bunker facilities for ships using such fuels for propulsion. This will be required for ports in the coastal areas, for inland waterways, but also for offshore platforms which generate “clean” fuels from wind energy.

With the aim of reducing greenhouse gas emissions and generate own power supplies cleaner and cheaper ports will make more use of renewable energy sources on their own premises.
Based on the expectations that economy of scale effects will be further used for especially gas carriers and container vessels, relevant port infrastructures will need to be improved/developed for such ship sizes.

Based on the current difficult market situation it is expected that the number of ships to be scrapped will increase at least in short-term. In combination with an increased pressure on ship owners to use scrapping facilities with adequate environmental friendly production standards there is opportunity for more European yards to develop scrapping services and provide the relevant infrastructure.