Strong growth in marine market electrification

Last year’s trends show marine electrification is growing steadily.

We at The Switch, our customers and other partners in the value chain continuously update our knowledge of the constantly evolving market. The sales cycle is very long, and gathering signals and trends in developments is essential.

We are observing the following:

• Electric propulsion is being studied for more and more vessel types.
• The use of batteries for marine vessels is booming.
• Shaft generators have become standard in newbuild deep-sea vessels.
• Retrofits are being considered by many vessel owners, despite the challenge of finding commercially viable solutions.

Industry sources agree

Industry reports confirm the growth with more details.

Container vessels, gas carriers and tankers have adopted shaft generators – and the adoption rate for these vessels is still increasing. Switching to electric is happening fastest for ferries, fishing vessels, and offshore supply vessels. Europe – especially Norway – is leading the way in the electrification of marine coastal vessels.

In 2023, more than 900 ships were operating with batteries, around 45% of these operating in Nordic countries with Norway having the largest fleet. In DNV’s latest Maritime Forecast, the report stresses that until carbon-neutral fuels become viable, prioritizing the development and use of technologies that reduce energy consumption is crucial for lowering shipping’s emissions.

Asia continues to build the majority of ships, with China being the biggest player.

Electrification drivers

The biggest driver for this transformation is the strategy of the International Maritime Organization (IMO), with a stated target of reaching net-zero GHG emissions by or around 2050. Several regulations – such as the Carbon Intensity Indicator (CII), Energy Efficiency Design Index (EEDI) and Energy Efficiency Existing Ship Index (EEXI) – have been defined to guide development toward this target.

EEDI Phase 3 ensures that all new vessels are designed to a minimum energy efficiency level in line with IMO decarbonization targets. This phase requires a reduction of at least 30% of the initial baseline. While some vessels were required to meet EEDI Phase 3 standards by April 2022, all remaining vessels greater than 400 GT must comply with Phase 3 effective January 1, 2025. This applies to all new ships with a contract to build on or after January 1, 2025.

Electrification lowers vessel operational costs through saved fuel costs. However, higher Capex in the investment phase influences decision-making.

Looking to the future

Electrification of the marine market is increasing at a higher rate than the overall growth of the marine market itself. In 2025, we expect the biggest growth to be in electric propulsion. Several interesting projects are already in progress. In addition, we expect the market for shaft generators to grow, as well. And in the coming years, I believe we will also see electric propulsion adopted for new sizes of vessels.

The opportunities are there, and the solutions are coming. Let’s embrace the challenges with enthusiasm and creativity!