In geological time humankind is a relatively young species, and now we are coming of age. Just as teenagers must learn to stop demanding from their family and fend for themselves humanity can no longer keep drawing on the natural capital – fossil fuels, raw materials, rivers and oceans - with impunity. We may not like this reality, we can have all the tantrums we like, and we can try and delay the inevitable but, sometimes, there are some things we simply cannot deny; we have to grow-up.
We may choose not to believe in climate change and deny the need to change but physics is an unswerving teacher. You can choose not to believe in gravity, but when you fall out of the tree you still crack your head. If you don’t believe in climate science, you’ll still be impacted by it. And, as others have articulated far better than me, the time we need to deal with those impacts is fast running out.
But the good news is that, regardless of what economists might have you believe, economics is not a science. Humans designed it and so, we can re-design it. Our current economic system was designed in the pre-Victorian era back in the day when ships were still powered by wind.
If I were MD of the world reviewing trends in our community’s annual accounts it would be clear that we are getting deeper in to debt, that our business is unsustainable. The planet is not an infinite resource supply nor is it a bottomless sewer. Actions have consequences and, it turns out, economics is a wholly owned subsidiary of the environment. If we fail to live within planetary boundaries our species will end up as a mere blip in geological time.
Figuring out how to manage the transformational shift we need to make is enlightened self-interest.
The strategic business case for change depends on fresh thinking. As any investment proposal will warn you about predicting the future based past experience; it is no guarantee of success. This is increasingly true in tumultuous times. The Stone Age didn’t end for lack of stones. As we head in to the uncertain future for the shipping industry let’s examine the Business Case.
Customers, cargo-owners, are demanding that the way they shift freight changes, they want to buy clean shipping. Almost every industrial sector, that is the people who buy shipping’s transport services, is committed to reducing emissions and looking down their supply chain to make emissions savings is a natural commercial response to achieving that objective. I’m told over and over that shippers won’t pay a cent extra for ‘green’ shipping. That means we have to think differently about how to solve the problem.
Renewable energy is a great investment opportunity.
... Ms Gilpin highlights.
Renewable energy is a great investment opportunity. We only need to glance ashore to see how transformative change is being underpinned by renewable energy. In 2016 there was record acquisition activity in the clean power sector, which rose 17% to $110.2 billion. According to Prof. Dr. Udo Steffens, president of Frankfurt School of Finance & Management, “Investor hunger…for wind and solar farms is a strong signal for the world to move to renewables.” According to the Financial Times, cumulative global growth in renewables has risen 1226% since 1990. Back then a single wind turbine might generate 45KW, now, driven by economic imperatives, conglomerates are collaborating to build fleets of floating 10MW+ turbines offshore.
The economic attributes of primary renewable energies – wind and solar – are that they are free, abundant and exclusively available to the asset it powers. These qualities allow us to develop new progressive business models. In the context of shipping we could look towards increased operational and financial autonomy, improved cost predictability where renewable energies mitigate the risk of whatever motor fuel – fossil or bio - is also being used.
This increased economic resilience is further enhanced by knowing that assets are future-proofed against whatever emissions regulations are imposed, because, along with the economic benefits, primary renewable energies are clean.
The economic attributes of primary renewable energies – wind and solar – are that they are free, abundant and exclusively available to the asset it powers.
... Ms Diane Gilpin notes.
The strategic case is largely understood but implementation is hampered by technical and engineering hurdles. The answer is in collaborating around the commercial imperative to adapt or die.
Engaging cargo owners in discussions creates new business opportunities. Long term predictable fuel savings have the potential to attract long term contracts of affreightment. Certainty begets certainty.
We might think about, in consultation with cargo-owners, designing for slower speeds, and then combining a suite of efficiency solutions to reduce overall propulsion requirements. Then we’d figure out how to deploy as much primary renewable energy solutions as we can now, and design to upgrade as new primary renewable technologies come to market.
This ‘system of systems’ is predicated on existing and near to market solutions. None of it is rocket science, but making it work financially requires new thinking. But now finance has joined the team. Anxious about risks of stranded assets, around the volatility, cost and availability of fossil fuels, of supply chain resilience, finance have brought to the table their financial models developed in cleantech that have enabled the rapid development of renewables on land.
Willing participants, focused on commercial solutions, work together to co-create solutions. It’s like working in the America’s Cup and Formula 1 combined - and on steroids, and even more exciting. And the prizes are significantly greater for everyone - both economically and environmentally.
We bring together the brightest minds, the deepest thinkers, the best naval architects, marine engineers, materials designers, commercial and digital pioneers and we collaborate around the common goal to build 100% renewable powered commercially viable working ships.
This is the ultimate race - against time. We rise to the challenge.
The views presented hereabove are only those of the author and not necessarily those of SAFETY4SEA and are for information sharing and discussion purposes only.
About Diane Gilpin Founder/CEO of Smart Green Shipping Alliance
Diane Gilpin leads The Smart Green Shipping Alliance, SGSA, a collaborative industry initiative designed to develop technically, commercially and environmentally superior systems solutions for shipping.
SGSA is leading a collaborative technical feasibility study, from which it will prepare the Business Case, for retrofitting dry bulk ships with wind-assist devices. Project partners include Drax, the UK’s largest renewable power generator, and shipowners, UltraBulk.
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, Willis Towers Watson, Cammell Laird and Capital Law.