By Ryan Skinner (email)
This is the second instalment of the Marine Tech & Innovation Chat (the first was with Joachim Bakke of BW Future). This time we go after the entrepreneur side of the innovation picture - someone developing and selling a specific idea.
Geir Erik Samnøy's got one of the industry's most interesting technical pedigrees, with experience from DNV, RCCL and Ulstein. And just last year he started off on his own to develop a unique technology that takes a holistic approach to reducing ship emissions and driving energy efficiencies.
While the specifics of Samnøy's and PresentWater's innovation are still under wraps, he shared with me some interesting takes on innovation in the industry, what's worth exploring, what's not and the state of the game for marine innovators.
Before moving on to the chat itself, note that the next chat is already lined up, this time with Øyvind Endresen - one of the most innovative minds at Høvik. Anyone with questions about DNV and innovation, send them to me and I'll pass them on to Endresen.
Are you a leader in marine innovation, a developer, technologist, manager or investor, and you've got some strong opinions on developments in the field? Let me know; I'd love to chat with you.
With that, here's the marine tech & innovation chat with Geir Erik Samnøy:
Ryan Skinner: Good morning, Geir Erik!
Geir Erik Samnoy: Good morning, Ryan!
Skinner: Welcome to the marine innovation chat, then!
Samnoy: Thanks for inviting me!
Skinner: So, let's get started.
Skinner: Can you tell me a little about yourself, background and such?
Samnoy: I have a background as an engineer from my eight years in the Royal Norwegian Navy
Samnoy: I added a Naval Architect degree from NTNU before I joined DNV for a period of four years
Skinner: You have some time with Ulstein and RCCL, as well, no?
Samnoy: Yes, I joined RCCL back in 2004 and relocated with my family to Miami
Samnoy: I became responsible for operations of three of their largest cruise ships, in my position as a ship manager
Samnoy: In 2006 I also resumed responsibilities for follow-up of the new building program in Turku, as a ship manager, including the Freedom-class and Oasis of the Seas
Skinner: And what are you doing today?
Samnoy: I started my own company PresentWater AS in 2009 after having worked as Technical Director in Ulstein Marine Service for about a year
Skinner: Why become an entrepreneur?
Samnoy: I had the core idea back in 2005 that had matured over time
Samnoy: and 2009 became timing-wise the good year to kick off this new endeavour
Skinner: Alright. We'll get back to that perhaps.
Skinner: In general, with your experience as ship manager and at DNV, Ulstein and RCCL...
Skinner: ...what are interesting areas for innovation in the marine field today, in your opinion?
Samnoy: Ship owners are all focused on the bottom line, as everybody else doing business...
Samnoy: with that in mind, I believe that radical innovations on emission reduction, especially SOx compliance, will be one of the most interesting areas...
Samnoy: closely followed by step-changing technologies driving energy efficiencies
Skinner: With SOX, there's sulphur-reduced fuel and scrubbers. Are we talking about something there?
Samnoy: Yes certainly and there’s a lot of money at the table regarding choosing the right sustainable solution(s)
Skinner: what kind of thing is liable to constitute or create a radical innovation in terms of SOX?
Samnoy: Until now we have seen lots of incremental innovations, but shortly there will be some radical innovations ready for the market when talking about abatement technologies more precisely desulfurization units, potentially in combination with modified scrubbers.
Skinner: What kinds of ideas/technologies lie behind those innovations?
Samnoy: They will be more holistic solutions, minimizing the fuel equivalent penalty, by e.g. utilizing existing waste streams onboard
Skinner: Fuel equivalent penalty?
Samnoy: Fuel equivalent penalty may serve as a good measure in order to make good comparisons between different abatement technologies. All operational costs - like electrical consumption, chemicals, consumables, spare parts, service etc., should be converted to a fuel equivalent penalty factor - or in % of the fuel cost (read: HFO)
Samnoy: Hence, if you have to source either chemicals, other consumables or spend lots of energy to solve your emission reduction - it comes with an equivalent cost
Samnoy: A closed loop scrubber for example, will have about 7-10% fuel equivalent penalty for carrying out the emission reduction on SOx and Particular Matter
Skinner: But somehow this sounds incremental. What qualifies as step-change? What is a radical improvement?
Samnoy: The radical innovation will omit large scrubbers in the funnel on existing vessels, which will have cost, space and weight constraints. Chemical cost and energy consumption may be reduced by more than 50% and the ship owner will still be able to run on HFO.
Samnoy: This approach will enable the owner to take the "lion's share" of the current 40% price difference between HFO and MGO in ECA areas
Skinner: Right. That makes sense.
Skinner: Would you say that ECAs created the necessary economic incentive/platform for radical innovations in terms of sulphur emissions?
Samnoy: I agree, when it comes to the need for radical innovations.
Samnoy: On the other hand the ECA doesn’t make an economic incentive for the ship owners directly. It just makes it harder for them to compete on even terms with less environmental friendly means like road transportation, in e.g. the Baltic Sea.
Skinner: You talk about holistic systems. How do you see this? Aren't there typically big barriers cost-wise?
Samnoy: holistic systems in this respect are selected and combined technologies that may work together for higher efficiencies, lower footprint with corresponding lower installation and/or operational costs
Samnoy: When waste from one process can be driver for the next, you’re on the right track. Sustainable solutions for the future should ultimately have a positive return on investment regardless of new legislations or temporary economic incentive programs. That will be all entrepreneurs’ competitive challenge.
Skinner: Sounds so straightforward. Why hasn't this been done before?
Samnoy: A rather good question. Large supplier/ OEM companies focus on finding solutions for single challenges and thereby maintain or increase their market share. While holistic solutions are often operator driven solutions, as they see the whole picture and know which keystones to be turned.
Skinner: And the operators haven't been there?
Samnoy: Most operators are busy with either making big money when the markets are “hot”. Or trying to survive in down-turns. They hardly have time to invest in their assets or in personnel allocated to R&D activities.
Skinner: So smart people with experience with the whole picture are able to step back and find the hidden, but obvious, benefits of doing things differently.
Skinner: And then market this back to the operators. Something like that?
Samnoy: Seeing the whole picture is definitely the key to making good decisions based on detailed business cases. Thus, I believe new opportunities will arise all the time for individuals having the appropriate background and network in place, while maintaining their knowledge.
Skinner: Do you see any other areas in shipping where this kind of thing is being done?
Skinner: Or should be done?
Samnoy: I think this is already happening within shipping logistics for instance even though more can probably be done.
Samnoy: Deployment of cruise vessels (selected ports and sailing route) may be as important short-term as how efficient the power plant onboard is operating. Slow-steaming for the merchant fleet is of the same nature.
Samnoy: You start with the low hanging fruits – until the market is up again =). Only the operators paying their own fuel bill have a more sustainable approach to overall energy efficiencies
Skinner: Specifically, in which areas do you see big potential for the future, in terms of where innovation could have dramatic results?
Samnoy: Utilization of waste- and waste heat as the clear number one, where currently developed technology easily can harvest 10-15% or more on fuel saving with payback within 2-3 years.
Samnoy: and secondly a totally new way of looking at ballast water as a resource rather than a problem
Skinner: ballast water as resource?
Samnoy: 5- 8 Billion tons of ballast water is transported worldwide per year! The major ports suffering most significantly related to the ballast water, is also the one’s scrutinized on fresh water supply
Samnoy: Given the society at large is anxious about future access to fresh water globally, there is a clear link here...
Skinner: I met a guy who tried to make a biz shipping Norwegian water to China. Don't think it was a big success. But he didn't try to use the ballast tanks to do it....
Samnoy: You literary don't have to bring it
Samnoy: You already have the appropriate resource..
Skinner: Right. You see a market in fresh water transport, alongside the transport of goods like oil and stuff in containers?
Samnoy: To be more precise - the holistic approach gives us the opportunity to CONVERT the needed ballast water to fresh water during voyage, at a cost less than $0.30/metric ton, whereas all the environmental requirements will be complied with
Skinner: Any areas of innovation in marine segment that you find overrated?
Skinner: as in, more attention than they deserve?
Samnoy: Selective Catalytic Reduction (SCR), evaporators for freshwater generation and based on above –the current ballast water treatment systems
Skinner: OK. What's the climate like for marine innovation these days, in your opinion?
Samnoy: Locally, in Norway at least, things are changing to the positive
Samnoy: Initiatives like Maritim21, Innovation Norway and Marut funding programs seems to target shipping more aggressively than just a few years ago
Samnoy: The NOx-Fund in Norway has already proven to be a good market-based instrument, and in my opinion similar set-up may also give desired effect on reaching other critical climate change goals
Samnoy: Contrary to governmental financial support, it appears that investors are harder to get these days. They are more willing to pay far more once the start-up companies can show revenue, than a relative small investment during the commercialisation stage. I.e. Investors have cyclic behaviour as the rest of the industry.
Skinner: Innovation seems to progress through a few first-mover companies (the Ulsteins, Wilhelmsens, RCCLs, etc.), then slow creep through the world fleet. Or driven by rules. Do you think there's the potential for innovations that gain rapid, broad adoption, without rules driving them? Say, the iPhone of shipping, in terms of popularity?
Samnoy: I do think so, when the innovators are able to make the impossible possible, get their solutions from the smart stage - to the simple, elegant and small stage. I believe you may get an iPhone-effect once one or more challenges are converted to new business opportunities in a practical holistic system
Skinner: About the holistic system, how are you going to get all the piecemeal systems to work together, when it seems they're designed specifically NOT to work together?
Samnoy: Like in the process industry shore-side, you may have standalone systems but you ensure that all waste streams are handled the most cost efficient way. Eventually you start combining processes with built-in required redundancy.
Samnoy: Once the business cases are bulletproof and the proper technologies are chosen, it's all about risk reducing measures to maximise value
Skinner: Sounds like a bunch of partnerships, licenses and contracts in different directions. True?
Samnoy: The owners are already faced with this problem – as only a few large companies are currently providing non-holistic solutions to all the environmental challenges this coming decade
Samnoy: In our case with four key technologies - it's not that complex. The important thing for our company is to secure the core radical technology that is the enabler between the four "off the shelf" state-of the art technologies
Samnoy: We will provide a turn-key project where solutions are deployed and built on each in a stepwise approach in order to maximise value and payback for the owner
Skinner: So, about that core radical technology, when is PresentWater going to lift the veil?
Samnoy: We recently kicked off the last prototype to be built. Hence, Spring/Summer 2011 will become the official market launch for our MarineExergy system
Skinner: OK. I guess I will pose one last question.
Skinner: What is the simplest thing you could imagine that would speed up the pace of marine innovation significantly?
Samnoy: Money (and networking) for pilot test programs of new innovations. I think there are numerous of good ideas still unknown in the market place that has the potential to put Norway on the map, again!
Skinner: Sounds good, then.
Skinner: I think that's it, then, Geir Erik!
Samnoy: Thanks for the opportunity, Ryan!