As environmental regulations tighten in line with the global decarbonization trend and the shipbuilding and shipping industries speed up development of eco-friendly ship technologies, marine engine makers are also moving in earnest to enter the electric-propulsion vessel market. With the electric-propulsion ship market just beginning to take shape, companies are drawing attention with differing strategies.
According to the industry on the 21st, Hanwha Engine plans to complete the acquisition of Hanwha Aerospace's MDS division within this month and move to expand its business scope.
The MDS division oversees work related to energy storage systems (ESS) for ships. At the end of Dec. last year, it announced it would acquire 100% equity of Norway-based electric propulsion and power automation specialist SEAM AS for about 2 billion Norwegian kroner (about 308 billion won).
Hanwha Engine's electric propulsion is expected to be applied first to small vessels. Because the battery drives the motor to turn the propeller, there is a limit to battery loading. Newly acquired SEAM AS also specialized in small vessels operating along the Norwegian coast.
Norway controls 42% of Europe's entire electric-propulsion ship market and is leading the early market. With coastal characteristics and even a mandate for eco-friendly ferries, it is also called a test bed for electrification of ships worldwide.
Even counting vessels scheduled for delivery, only 1,346 electric-propulsion ships have been delivered to the global market. Hanwha Engine acquired a leading company to enter a market that is in its early formation stage quickly.
The industry believes that as the market matures, application to large vessels will gradually become possible. A shipbuilding company official said, "Electric-propulsion ships are similar to the trajectory of the electric vehicle market," adding, "Battery technology must advance to increase energy density, and charging infrastructure must be established for application to large ships."
HD Hyundai is targeting the market with a different approach using nuclear power as the energy source. On the 9th, it signed a joint development agreement with the American Bureau of Shipping (ABS) for a "concept design of a nuclear-linked electric propulsion system," agreeing to cooperate in areas such as the basic design of a nuclear-linked electric propulsion system. The goal is to develop a customized power management system applicable to large container ships capable of long-duration operations.
HD Hyundai aims to commercialize electric propulsion for large vessels by 2030 and plans to launch the propulsion drive, the core of electric-propulsion ships, in 2028. To that end, in May 2024 it also signed a cooperation agreement with ABS to develop a high-voltage direct current transmission and distribution system for ships and to establish class rules. MVDC is a technology that transmits high-voltage power as direct current and can increase power integration efficiency by up to 20% when applied to large electric-propulsion ships.
Environmental regulations are driving growth in the electric-propulsion ship market. Norway requires passenger ships and ferries that pass through certain areas such as fjords designated as UNESCO World Heritage Sites to operate with zero-emission service that emits no carbon dioxide or methane starting this year.
The European Union (EU) will also mandate the use of greenhouse gas reduction fuels and technologies for ships berthing at EU ports starting in 2030. Regulations by the International Maritime Organization (IMO), which targets carbon neutrality by 2050, also have an impact.
Although the market is only now blooming, demand for electric-propulsion ships is expected to gradually increase. According to market research firm Fortune Business Insights, the electric-propulsion ship market, which was about $4.97 billion (about 7.4 trillion won) last year, is expected to grow to $5.83 billion (about 8.7 trillion won) this year and to $22.73 billion (about 33.9 trillion won) by 2034. That is a high average annual growth rate of 18.5%.
An industry official said, "There are no customers in Korea who can place orders right away, so it does not translate directly into revenue, but it should be viewed as an investment in a future market that will grow globally."