- Benefit, Cost, LNG
This analysis addresses the ex-ante costs and benefits for the best available LNG technologies individually and together in different configurations. The potential savings on fuel costs, resulting from the switch of diesel to LNG, forms the core of the financial benefits in this analysis. The fuel cost savings, and also the business case, strongly depend on the LNG fuel price on the one hand, an external factor from the ship owners point of perspective, and the fuel consumption of the relevant vessel on the other hand.
Benefits for the society in the form of environmental benefits due to emission reduction are significant and may in some cases reach nearly a half million euros annually achieved by one vessel. Most benefits are made on reducing NOx, whereas benefits rising from CO2 reduction are relatively marginal.
The total cost is defined for six different LNG configurations for inland vessels and it appeared that costs strongly vary among the different configurations and representative vessel types, depending on factors like whether it concerns an existing vessel or newbuild, place of the LNG tank, the installed power on board, LNG engine type, etc. Vessels with relatively high investment costs also benefit on average the most from lower fuel costs resulting from the switch to LNG,
while it appeared that higher investment costs can mainly be related to a higher installed power and the requirement for more engines but this means at the same time a relatively higher fuel consumption on average and consequently higher savings on fuel costs.
The business case strongly depends on the investment costs, the fuel price and the fuel consumption. Given the investment costs and fuel savings it is possible to realise a positive business case, without any subsidy, during the economic lifetime of the LNG-installation of 10 years.
The full analysis can be found under downloads