A financial evaluation of the design concept for a 'clean energy producing vessel'. (May 2015)

• Record Type: Journal Article
• Authors: Cullinane, Kevin; Cullinane, Sharon
• Is Part Of: Proceedings of the Institution of Mechanical Engineers. Volume 229:Number 2(2015:May)
• Page Start: 201
• Page End: 217
• Publication Date: 2015-05
• Subjects: Financial evaluation -- energy production -- vessel -- design concept -- clean energy producing vessel -- net present value; Marine engineering -- Periodicals; 623.805
• DOI: 10.1177/1475090213512294
• Languages: English
• ISSNs: 1475-0902

Abstract

The design concept for a 'clean energy producing vessel' proposes the exploitation of remote offshore gas reserves, primarily from stranded fields, using a floating electrical power generation plant. In comparison to conventional approaches utilising liquefied natural gas and pipeline technologies, the clean energy producing vessel represents a highly innovative approach to the production and transportation logistics of natural gas for electricity generation. The main objective of this article is to undertake a financial evaluation of the clean energy producing vessel design concept. This is achieved by developing a financial model comprising cost and revenue modular elements that reflect the major technical components of the design concept: the floating production, storage and offloading unit; the electrical generation plant; cable transmission; carbon capture and electricity prices. The results for net present value and internal rate of return are derived for all combinations of either high- or low-revenue scenarios and for high- or low-cost scenarios. With a rather low internal rate of return of just 15.53%, the only scenario that yields a positive outcome is that of the high-revenue and low-cost combination. Accounting for savings in carbon dioxide emissions exerts only a negligible impact upon the results. Analysis of future research required concludes that following its deployment and implementation, the feasibility of the clean energy producing vessel design concept depends on the outcomes of economic and technological assessments, which are difficult to predict with any degree of certainty.