Optimal ship lifetime fuel and power system selection under uncertainty
Benjamin Lagemann, Sotiria Lagouvardou, Elizabeth Lindstad, Kjetil Fagerholt, Harilaos N. Psaraftis, Stein Ove Erikstad
Abstract
Ship designers face increasing pressure to comply with global emission reduction ambitions. Alternative fuels, potentially derived from bio-feedstock or renewable electricity, provide promising solutions to this problem. The main challenge is to identify a suitable ship power system, given not only uncertain emission requirements but also uncertain fuel and carbon emission prices. We develop a two-stage stochastic optimization model that explicitly considers uncertain fuel and carbon emission prices, as well as potential retrofits along the lifetime. The bi-objective setup of the model shows how the choice of optimal power system changes with reduced emission levels. Methanol and LNG configurations appear to be relatively robust initial choices due to their ability to run on fuel derived from different feedstocks, and their better retrofittability towards ammonia or hydrogen. From a policy perspective, our model provides insight into the effect of the different types of carbon pricing mechanisms on a shipowner’s decisions.