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UPSCALE OF ELECTRICAL PULSES TECHNOLOGY CAPABLE OF FRAGMENTING HYDROCARBON CHAINS IN FUEL FOR MARITIME APPLICATIONS

Periodic Reporting for period 1 - AQUASONIC-diesel (UPSCALE OF ELECTRICAL PULSES TECHNOLOGY CAPABLE OF FRAGMENTING HYDROCARBON CHAINS IN FUEL FOR MARITIME APPLICATIONS)

Reporting period: 2015-02-01 to 2015-06-30

The maritime industry is one of the most fuel intense industries and a great source of greenhouse gases, among which CO2 is the primary source of concern. Shipping is responsible for approximately 3% of global CO2 emissions , and future scenarios indicate that CO2 emissions from ships will more than double by 2050 . The IMO Marine Environment Protection Committee has already developed a package of measures for reducing shipping’s CO2 emissions putting direct pressure on the maritime industry. On the other hand, as the cost of marine fuel oil has increased by more than 33% since 2011 the need to improve and lower the fuel consumption of marine diesel engines has never been more urgent in the history of marine industry. 90% of global trade is transported by ship and almost 90% of the EU’s external trade is carried by sea. In addition 40% of the internal trade is done by ship connecting two of the 1,200 merchant ports along the EU coastline.
In the past years, we have focused our research efforts on applying our patented electric pulsed power technology to other industrial sectors to replicate the success we achieved for lime removal. Fuel is a fluid that contains long-chain hydrocarbon molecules that result in incomplete burning during the combustion process, leading to greater levels of harmful emissions and higher fuel consumption. Based on our patented electric pulsed power technology we have developed a prototype which improves the combustibility of the used fuel. The tests carried out have shown that the application of electric pulsed power technology on fuel before its entrance to the motor engine led to a direct reduction of fuel consumption by 10% as well as reducing related polluting CO2 emissions.
On the commercial side, we have planned to sell AQUASONIC-diesel to the maritime sector (potentially 14,000 ships in Europe) by the beginning of 2018. This sector has been primarily identified by us due to its high demand of fuel (a containership of around 8,000 Twenty-foot Equivalent Units consumes about 225 tons of bunker fuel per day at 24 knots). The selling price of the technology is estimated between 2.000 – 20.000 €, depending of the fuel flow in each case, for each AQUASONIC-diesel module installed in a ship and will significantly optimize the combustion and therefore reduce the fuel consumption by up to 20%, leading to an increase of the power output of between 10% and 15% and consequently reduce the emission of CO2 pollutants by approximately 60%. By demonstrating the system benefits to ship owners, we set ourselves the target of reaching sales of 15M€ until 2021.
The overall system advantages and the actual fuel price situation, and environmental pressure on the transport sector to reduce emissions of combustion gases, presents a great business opportunity to introduce this technology in the market.
Overall AQUASONIC-Diesel Objectives:
In order to provide the maritime sector with our technology, we need to scale up starting from our initial prototype, install the system in different types of big ships and boats as freight ship goods, container ships, freighters, cargo vessels, tugboats to assess its durability, and check its performance in the operating environment. In addition, a key aspect for this novel technology to be introduced successfully in the maritime transport sector is the certification by specialized bodies that AQUASONIC-diesel fully complies with the standards specified for the sector. The main characteristics that AQUASONIC-diesel will provide to the end users are:
1. Lowering fuel consumption by 20%, dropping emissions by up to 60% leading to cost savings.
2. Foreseen for new builds and retrofit without causing any modifications to the marine diesel engines.
3. Maintenance free, robust, natural and ecological physical treatment of fuel that does not affect the fuel properties, without the application of chemicals (unlike the state of the art). Non-polluting (no leaching of toxic substan
AQUASONIC-Diesel activities during Phase I.
This report is a summary of the main activities planned for SME instrument Phase I that have been performed from February 2015 to End June 2015.
1. Technical viability plan;
A structured plan to scale up of the AQUASONIC-Diesel prototype for larger vessels, including technical product development and marketing activities and upgrading production capabilities to achieve the sales forecast has been done. Aquasonic has further analysed certification requirements together with entities that have the credentials for it (RINA), which has been included in the technical plan. Also, entities with capacities for the optimization of control and chemical analysis have been identified.
Future activities to be performed in a subsequent Phase II have been organized in Work Packages as follows:
- WP1. AQUASONIC-Diesel Technical Design: To obtain a detailed specification and configuration model that we will validate, using design software tools, in all its features.
- WP2. Industrial process optimisation. We will optimize the manufacturing process adopting a Lean Manufacturing Strategy (to optimize product cost and increase the competitiveness of Aquasonic) and performing a cost and Life Cycle Analysis of the process to reduce environmental impact. This WP will also be extended to the installing activities.
- WP3. AQUASONIC-Diesel Components Integration in the final product: we will integrate all the components selected and tested in WP1 to produce a first batch of around 15 AQUASONIC-Diesel configurations for testing and certification. They will depend on the results obtained in WP2.
- WP4. Testing and Certification: We will validate and certificate the first batch of devices with the upgraded configuration with the support of a certification lab and a certification body.
- WP5. Exploitation and Commercialization plans. We plan to engage key-players of the ship building and maritime transport maintenance market segments to establish first agreement with shipyards and maintenance companies taking into consideration the results obtained in WP4.
- WP6. Project Management. WP6 is a transversal work package that groups all the activities related to the project coordination and management
2. Commercialisation plan.
A detailed commercialisation plan for Aquasonic has been elaborated, and due to the high possibilities of the product, the Maritime transport market has been selected as priority and deeply analysed for the first years of the market target of Aquasonic in order to establish the commercial strategy of the product.
3. Financial Review and Business Plan.
We have implemented an updated business plan for AQUASONIC-Diesel that includes a complete overview of the company background, market analysis, competitors analysis, strategies for operations, go to market strategy and management as well as market projection and a financial and viability plan.
4. Consortium set up.
We pre-agreed a future partnership with EUNOVA 2001, S.L. Engineering Company, a company based in Alicante specialised in design and refurbishment of commercial vessels. Several shipyards in Italy and Spain have been contacted for the future implementation of AQUASONIC-Diesel, and yet the agreement with Navia Nabiera has been confirmed for the participation on for testing and demonstration in future Phase 2.
In addition we discussed the requirements for certification with RINA (classification society), who will be contracted for the required activities.
5. Risk assessment.
We have reviewed the risks related to both commercial and technical progress of AQUASONIC-Diesel for the subsequent implementation of the Phase 2.
Aquasonic is aware of the trends in the maritime sector which are mainly driven by two important aspects: Reduction of the fuel consumption (and associated cost reductions). While the cost of marine fuel oil has increased by more than 33% since 2011, freight rates continued to be depressed by overcapacity and sluggish economic growth. Today, fuel bunkers represent about 70% of an average vessel´s total operating cost, according to the Baltic and International Council (Bimco). Maersk for example reported recently that its annual fuel cost is US$6 billion. A 10% improvement in fuel efficiency translates to a US$600 million improvement in bottom line. In this sense, competition in shipping produces a strong need to reduce operating costs from which fuel is a very important part (approximately 50%) not to forget the increasing oil prices which are expected to increase the demand for more fuel-efficient ships. The need to improve and lower the fuel consumption of marine diesel engines has never been more urgent in the history of marine industry. On the other hand Shipping is facing progressively stricter environmental regulations in the future. These affect to both air pollution, limits on sulphur oxide (SOx) and nitrogen oxide (NOx) emissions from ship exhausts, and water pollution, affecting the use of chemicals to improve the combustion process. Furthermore, shipping is responsible for approximately 3% of global CO2 emissions[1], and future scenarios indicate that CO2 emissions from ships will more than double by 2050. Aquasonic is proposing a solution to a European and even global problem which is common to all ships. If all of them were to use AQUASONIC-Diesel, the total amount that could be potentially saved is 20% of the consumption per lfote, saving also around 60% on operating costs . We plan AQUASONIC-Diesel to enter the segment of maritime transport ships in the first place (14,000 ships in Europe) by the beginning of 2018. The selling price of the technology is estimated at 2.000-20.000€, depending of the module installed. We expect to reach sales of 15 M€ by 2021.
We have implemented an updated business plan for AQUASONIC-Diesel that includes a complete overview of the company background, competitor’s analysis, strategies for operations, go to market strategy and management as well as market projection and a financial and viability plan. The financial plan also shows that break-even point can be achieved in the second year of commercial operations under a pessimistic scenario.
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