Financial Analysis
The aim of this financial analysis is to check the commercial viability of retrofitting a Flettner rotor on the chosen ship. Once the final energy savings were calculated, the fuel saving was calculated based on the formula below:
Marina Gas Oil (MGO) was selected to be the bunker oil for this ship. The energy consumption at 75% load for engine Wärtsilä 12V50DF was taken from the engine datasheet. Meanwhile, the heat content for MGO is at 42.7 MJ/kg. Based on this formula, the annual fuel saving is approximately 910 tonne.
Subsequently, the basis and assumptions for financial analysis were determined prior to the payback period analysis as per below:
Rotterdam bunker oil was selected as this oil falls under the European, Middle East and Africa (EMEA) region. The bunker price is based on the average price from September 2018 to March 2019. The figure below shows the bunker price on March 2019.
In addition, the cost of a 30x5m Flettner rotor was provided by Norsepower Ltd. An additional cost was included for the retrofitting of the rotor (based on information from Norsepower), as well as a contingency as per below.
Based on this information, the calculated payback period for one 30x5m Flettner rotor is approximately 6 years and the Net Present Value (NPV@10%) for this project is EUR 0.9 Million. The project Internal Rate of Return (IRR) is calculated at 23%. This is considered a robust project financially as the project IRR exceeded the common targeted IRR value of 10%.
