Electric Ferries Are Sailing Under the Radar
A fair number of us feel tension while flying because society makes sure that we’re all immediately notified whenever a plane falls out of the sky. The worst airline accident ever recorded took place back in 1977 when two planes collided on a Tenerife runway after the pilot confidently said “oh yeah…” when his flight engineer asked him – for the second time – whether or not they should proceed down the runway for takeoff. Fourteen and one-third seconds later, they collided with an incoming plane resulting in 584 people dead. It was the deadliest accident in aviation history, but still pretty light when it comes to transportation disasters. Riding on ferries has proved to be far more hazardous.
Before we go any further, let’s define what sort of vessel might be classified as a ferry. We’d like to give a shout out to Interferry – a highly respected shipping association representing the ferry industry worldwide – for the below concise set of rules which dictate what a ferry isn’t:
When it comes to 20th century maritime disasters, the worst one ever recorded took place 10 years after the Tenerife incident when a rusting hunk of steel called the Dona Paz was making its way from Leyte to Manila in the Philippines with more than 4,000 people on board, 2,000 of whom weren’t even on the ship’s manifest.
Few people outside the Philippines would be able to recall the day that overcrowded vessel crashed into an oil tanker leaving 4,386 people dead. Most of us probably don’t pay much attention to ferry accidents because we’re not living in a place where we need to rely heavily on ferries for transportation.
Ferries Around the Globe
Ferries play a crucial role in providing cheap transportation for the citizens of many countries. They consume less fuel compared to land transportation methods like buses and they help passengers avoid traffic congestion. In developed countries like Venice, they’ve fully implemented ferries as the major means of public transport. In Alaska, ferries are used to transport people and their vehicles to towns that are inaccessible by road. Since so many people rely on ferries for transportation, it only makes sense that we ought to make them electric. That way, first-world tourists can feel better about themselves when visiting these poverty-stricken destinations. There are other benefits of having electric ferries as well.
Why Electrify Ferries?
It seems like all modes of transportation are turning to electric propulsion, though electric cars are having a bit better luck than electric airplanes. Most of the press around advances in maritime transport surround autonomy and cargo transportation. Turns out that ferries are likely to make the most progress when it comes to electrification since they frequently traverse short distances and stay for relatively long periods of time at the same ports. Ergo, this arrangement makes electric ferry charging quite convenient. That’s why when it comes to battery-powered maritime vessels, ferries are leading the way.
When it comes to environmental benefits, there’s the obvious reduction in multi-colored oil slicks commonly seen pooling around ferry terminals. A company with a dog in the race, Siemens (SIE:GR), claims that vessels re-purposed to function as electric ferries would emit 30 tons less of smog-producing carbon dioxide pollution per engine. It’s also about helping marine life out so there’s more of them for us to snack on later.
Research by the University of Washington revealed that the engine sounds of water vessels like ferryboats and container ships make echolocation more challenging for animals that rely on sound to look for food. A good example of this are the orcas, which bounce off the sound on salmon and other prey to locate them. The ship noise, despite being above water, can easily travel many miles underneath and disrupt their hunting and the way they communicate with each other. Biologists reported that the lack of salmon along with clean water and a quiet environment are contributing to the extinction of resident killer whales in Washington. Converting to electric ferries, pretty much like electric cars, will result in quieter engines. These would at least lower the noise level, which has increased tenfold since the 1960s, so the marine animals would only have to contend with man-made sounds from passengers.
Regular readers will know that we could care less about how warm and fuzzy something is, we’re more interested to know if investors can make money off the idea so that it can scale. You have to beat the system to change it. Turns out that electric ferries aren’t just good for the environment, they’re also a boon to the economy. For example, Washington State is turning to electric ferries to hedge against the price of oil.
The argument for doing so is strengthened by the state’s cost projections. If the most aggressive system were implemented and oil prices stayed low for decades, Washington would net more than $2 million. If diesel gets expensive? It’d be $58 million.
That’s according to an article by the Governors’ Wind Energy Coalition which talks about how Washington State took inspiration from one of the most expensive countries in the world – Norway – home of the first electric ferry.
The First Electric Ferry
The MS Ampere (previously ZeroCat) began its commercial operations in May 2015, making it the first electric ferry in the world. The project was a collaboration between ferry operator Norwegian Shipyard Fjellstrand, industrial giant Siemens, battery systems company Corvus Energy, and shipping company Norled AS. At the moment, the MS Ampere makes 34 trips per day across Sognefjord between Lavik and Oppedal.
The electric propulsion system for the MS Ampere integrates Siemens BlueDrive PlusC Solutions. This includes a battery along with a steering system and thruster control for the propellers. It also has an energy management system while the machineries and auxiliaries of the MS Ampere are controlled and monitored by the integrated automation systems. Two 450kW electric motors weighing a collective 10 tons are used to power the thrusters with help from the onboard lithium-ion batteries.
The MS Ampere ferry can accommodate 360 passengers plus 120 cars. Data gathered from the trips of Norway’s electric ferry shows that the vessel lowers diesel consumption by one million liters and offsets 570 tons of carbon dioxide. The region’s nitrogen oxide emissions diminished by 15 tons which translated into a 95% decrease in emissions. Meanwhile, the electric ferry operating costs proved to be 80% lower than their fuel-powered counterparts. Due to the success of the project, Norway expects its entire ferry fleet will be all-electric by 2023.
Electric Ferry Challenges
If all of you Alaskans out there without Internet could read this, you’d be quick to point out one of the challenges faced by the makers of MS Ampere. Sparsely inhabited areas of the type where ferries might service have weak electrical grids. The locals won’t appreciate having their television sets and washing machines switched off so the nearby ferry can recharge in time for the next scheduled sailing.
To solve the weak grid problem, Siemens and Corvus Energy decided to position banks of batteries in every ferry terminal. While the electric ferries are traversing the waters, the batteries steadily recharge by drawing moderate amounts of power from the grid. That way, the ferries won’t have to pull too much electricity every time they charge.
Since the ferries only have a limited amount of time to charge in docks, the companies also installed one lithium-ion battery at every pier to work as buffers. Implementing these precautions eliminates the need for them to expand the entire grid in order to decrease waiting periods for passengers. This resulted in an electric ferry charging period of about 20 minutes for every trip excluding the allotted 10 minutes for loading and unloading of cars and passengers. Maybe if those Norwegians moved to the greatest city in the world they wouldn’t have to worry about shoddy electrical grids and sub-par pizza.
The First Electric Ferry in New Yawk
Dubbed by 97% of its occupants as “the greatest city in the world,” New York has seen a drastic increase in traffic congestion what with the 59% rise in the number of for-hire vehicles. In fact, the average traffic speed has dropped to 15% during business hours since 2010. With the L train subway temporarily shutting down this year, commuters between Manhattan and Brooklyn will have to find alternative routes. This is where the Brooklyn electric ferry project comes in.
The first electric ferry in New York will be powered by SW/TCH E-mobility in collaboration with investing group Clean Marine Energy. The company aims to include this platform to its e-commuting fleet onshore. Their flagship e-ferry, which will connect Williamsburg with the East side of Manhattan, will be able to carry 150 passengers. Aside from the electric ferry, SW/TCH also encourages passengers to avail of their other commuting options such as their mini-shuttles and electric vans. Commuters can also lease their e-bikes and even e-skateboards on a daily basis.
The SW/TCH membership plans are $150 per month and members receive a base quantity of ride credits that can be applied to all e-rides in the company’s fleet. While the price may seem palatable, you may think twice about it when learning that the company plans to offer “beer and cocktails along with live music in the afternoon.”
Sounds like a great way to appeal to the sort of people who think it’s totally cool when the air stewardesses decide to hold an impromptu trivia game with the passengers halfway through a flight. According to the project’s website, things will kick off at the end of 2018 with a build time of roughly a year. This means they’ll come online around the same time as their neighbors to the north.
The First Electric Ferry in Canada
Canada is on board with the electric ferry revolution and recently ordered their first two electric ferries. The Ontario government accepted the electrification proposal of Damen Shipyards in the Netherlands in collaboration with SCHOTTEL in Germany for the propulsion systems. The contract includes building an electric ferry servicing Kingston and Wolfe Island and another for Millhaven and Amherst Island. The electrification of these ferries will cut down the carbon dioxide emissions of the region by almost 7 million kg annually.
The Amherst Island electric ferry, which is scheduled for delivery in 2020, can transport up to 300 passengers and 42 cars. Meanwhile, its Wolfe Island counterpart, which will be delivered in 2021, can carry up to 399 passengers and 75 cars. The electric ferry speed for both vessels is said to be the same as the conventional propulsion of 12 knots. That’s because these electric ferries are equipped with four twin-propeller engines that also have a diesel power backup.
Companies that manufacture electric ferry equipment like the motor seen above may be attractive acquisition candidates for large industrial companies that want exposure to the growth of electric vehicles while increasing their appeal to the ESG investing types.
The electrification of ferries, especially in Norway, has led to a number of other countries initiating the electrification of their ferry transport industry. With India and China having some of the cheapest electricity in the world, some of you MBAs out there ought to be taking notes and thinking about how you might be able to use electric ferries to undercut local transport providers and “make money while saving lives.” Socially responsible investing as it’s supposed to be.
Do you want to trade stocks for free? For the rest of your life? TD Ameritrade has completely eliminated commissions for stocks, ETFs (domestic and Canadian), and options. Open up an account with TD Ameritrade today and make brokerage fees a thing of the past.