Life-Cycle Cost Analysis on a Marine Engine Innovation for Retrofit: A Comparative Study

Abstract

Stricter regulations and ambitious targets regarding air emissions from ships have led the shipping industry to a tipping point necessitating disruptive technologies for green and ecological operation. This study introduces a dual-fuel engine innovation with ultra-high energy conversion efficiency, thereby reducing exhaust gas emissions. However, the total cost performance of such an innovation throughout its long lifespan can be a matter of concern for decision makers (i.e. ship owners) if they decide to retrofit their existing fleet. The purpose of this study is to provide insights into the economic performance of such an innovative dual-fuel engine when it is utilized as the main propulsion system. From a cradle-to-grave perspective ranging from construction, operation, maintenance to end-of-life, the life-cycle costing (LCC) framework is proposed to evaluate the long-term cost performance of the dual-fuel engine with that of a conventional diesel engine. By using the net present cost (NPC) as an evaluation indicator, the research results reveal that the dual-fuel engine is considered as a cost-effective option except for the high fuel price differential scenario, meaning that fuel prices are the most critical factor for ship owners. In addition, the environmental impact of these engines is included in the evaluation to show that 33% reduction in emissions of carbon dioxide (CO2) can be achieved when running the dual-fuel engine, compared to the diesel engine. The proposed framework could conceivably be beneficial in selecting marine engine innovation that takes not only the environmental impact but also the economic performance into consideration.