Marine Hybrid Propulsion Market Size, Share & COVID-19 Impact Analysis, By Operation Type (Parallel Hybrid Propulsion System and Serial Hybrid Propulsion System), By Component (I.C. Engine, Generator, Power Management System, Battery, Gear Box, and Others), By Ship Type (Container Ship, Passenger Ship, Fishing Vessel, Yacht, Tanker, and Others), By Installation (Line Fit and Retrofit), and Regional Forecast, 2023-2030

The global marine hybrid propulsion market size was valued at USD 4.62 billion in 2022 and is projected to grow from USD 5.13 billion in 2023 to USD 11.59 billion by 2030, exhibiting a CAGR of 12.4% during the forecast period. North America dominated the marine hybrid propulsion market with a market share of 12.77% in 2022. Moreover, the marine hybrid propulsion market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 1,177.9 million by 2030, driven by an increasing adoption of parallel hybrid propulsion system from various end-users.

Hybrid propulsion systems for marine applications combine an internal combustion engine and battery power to optimize engine operation and reduce emissions. They are ideal for vessels with flexible operating profiles and runtimes with varying power requirements. There are various types of hybrid propulsion configurations, and the most adopted are serial and parallel hybrid propulsion. The best hybrid configuration for a boat or business is determined by type of operation, speed of operation, expected mileage and duration of operation, available charging infrastructure, local or national emission standards, and others.

Furthermore, there are various key features of marine hybrid propulsion systems such as reduction in noise level, increased fuel efficiency, increased torque, and others. Moreover, the hybrid propulsion helps the operators to switch to electric propulsion during low-speed cruising or in the event of any internal combustion engine failure. Hybrid propulsion systems offer flexibility in power generation, lower carbon emissions, and decreased maintenance costs. Owing to such significant features, the market for marine hybrid propulsion systems is projected to grow during the forecast period. The rising demand for reductions in carbon emissions will boost the global market size from 2023 to 2030.

COVID-19 IMPACT

COVID-19 Hampered Supply Chain and Reduced Market for Marine Hybrid Propulsion System

Due to COVID-19, local authorities banned many cargo and passenger ships from entering ports. As a result, several merchant sailors became stranded on the ship itself. The ship owner had to incur additional costs as the ship was stuck in territorial waters for a long period. The decline in fishing tourism, cruise tourism, and leisure activities during the pandemic also impacted the boat market. The outbreak affected shipping traffic, as many seafarers ended their employment contracts and had to renew them. In addition, to prevent the spread of a new coronavirus infection, importing and exporting products and goods were prohibited.

LATEST TRENDS

Increase in Adoption of Vanadium Redox Flow Batteries in Marine Hybrid Propulsion System

Vanadium Redox Flow Batteries (VRFB) technology utilizes a non-flammable, aqueous electrolyte that contains vanadium that can be recovered and recycled at the end of the VRFB life cycle. Many key players are focused on adapting this technology to the marine hybrid propulsion system due to environmental factors related to carbon emissions.

Furthermore, the vanadium redox flow battery stores electrical energy in large tanks containing a liquid vanadium electrolyte. Although bulkier than lithium-ion batteries, they have potential advantages for marine applications. In February 2021, VanadiumCorp announced that it entered into a trilateral agreement to improve the development of vanadium-based battery technology for ships and ship propulsion systems.

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DRIVING FACTORS

Decrease in Fuel Consumption Resulting in Low Operating Costs to Drive Market Growth

The major concern for ship owners is fuel consumption in a diesel engine propulsion system. Apart from this, the fluctuation in fossil fuel prices, increase in sulfur emissions, and reliance on low-grade fuel are a few factors owing to which major players are focused on developing hybrid propulsion systems. Furthermore, according to various marine journals, the hybrid propulsion system reduces up to 40% of NOx due to the maximum load reduction. According to a report by the International Council on Clean Transportation (ICCT) a hybrid propulsion system installed on a container ship could reduce fuel consumption by 10-20%. Another study reported that hybrid propulsion systems can lead to fuel savings of up to 30% compared to traditional propulsion systems. These statistics demonstrate the significance of hybrid propulsion system in reducing fuel consumptions, resulting in low operating costs.

Technological Capabilities and Broad Network of OEMs to Drive the Market

Technological advances and innovations are key trends gaining popularity in this market. Many combinations are possible due to different types of energy, power conversion, network technology, and drives. According to the Journal of Marine Science and Engineering, the study of hybrid propulsion shows a reduction of 66% in carbon emissions while increasing the lifetime cost by 40% when compared to a conventional propulsion system.

Furthermore, various OEMs are focused on taking collaborative steps to implement a marine hybrid propulsion system on board. For instance, in August 2022, Crowley was selected by Senesco Marine to provide the design review and product packaging for a hybrid electric passenger ferry for Casco Bay Lines in Portland. As part of an elite project team, Crowley brings many skills to sustainable, low-emission design, and construction services.

RESTRAINING FACTORS

Increase in Complexity of Propulsion System Compared to Conventional System will Hamper Market

The recent trend to design more efficient and versatile ships has led to a growing variety of hybrid propulsion and power supply architectures. Intelligent control strategies are required to improve performance in these architectures. Various types of ships, such as offshore vessels, naval ships, and container ships, have to perform different operations, such as transit and critical dynamic positioning operations, which makes it complex for the propulsion system. The varying operating profiles make it difficult to optimize power and propulsion plants for specific operating points during the vessel design stage, as has been traditionally done.

Furthermore, in marine hybrid electric propulsion systems, the electric drive system is usually controlled by a Power Management System (PMS), which optimizes load distribution. This is important due to the fact that power supplies are connected to the same distribution grid and improper power supply and demand can lead to a shutdown of the electrical system. However, developing an optimized PMS to achieve different operational load profiles is challenging as it requires sensor detection, such as fuel consumption, power output, and engine speed, which is typically not readily available. Additionally, a control strategy for the electrical network is required for the maintenance of voltage and frequency stabilization, which creates more complexities than the conventional system.

SEGMENTATION

By Operation Type Analysis 

Parallel Hybrid Propulsion System Segment is Expected to Dominate Owing to its Extensive Application in Various Ship Types

By operation type, the market is bifurcated into parallel hybrid propulsion system and serial hybrid propulsion system. Parallel hybrid propulsion is expected to dominate the market during the forecast period. This growth is due to the increasing implementation in ship types, such as tug boats, passenger ships, and others, owing to various advantages as operators can switch to electric propulsion during low-speed cruising, which reduces fuel consumption.

The serial hybrid propulsion system segment is anticipated to grow significantly during the study period. This segment type is used for short-distance public transport vessels and city ferries. In a serial hybrid propulsion system, the batteries must have high power density and large capacity to meet demand.

By Component Analysis 

I.C. Engine Segment Dominates the Market Owing to Significance of Engine Component in Propulsion System

By component, the market consists of I.C. engine, generator, power management system, battery, gearbox, and others. The I.C. engine segment is anticipated to dominate during the forecast period owing to the requirement of power during hybrid propulsion. Furthermore, the cost of the I.C. engine makes it a significant component in the entire hybrid propulsion system.

The generator segment is anticipated to witness significant growth during the study period owing to the development of a new type of generator by various key players. The main advantages of marine generators are that they have lower maintenance cost than gas generators, improved noise reduction, safer operations due to no sparkling, and longer lifespan owing to lower burn temperatures. Owing to the significance of marine generators, the segment is anticipated to grow during the study period.

By Ship Type Analysis 

Fishing Vessel Segment Dominates the Market Owing to Rising Fleet

By ship type, the market is categorized into container ship, passenger ship, fishing vessel, yacht, tanker, and others. The fishing vessel segment is anticipated to dominate the market during the forecast period owing to increase in fleet size of fishing vessels around the world. According to a report by the Food and Agriculture Organization of the United Nations, in 2020, the estimated number of fishing vessels was 4.1 million. Moreover, Asia has the world’s largest fishing fleet with 2.68 million vessels.

The yacht segment showed significant growth in 2022 due to increasing demand for low-carbon emissions in commercial marine tourism. Many key players are focused on the development of technologies to tackle the problem of carbon emissions and improve energy efficiency. The development of air lubrication increases energy efficiency. Such key developments are a major reason for the growth of the segment during the study period.

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By Installment Analysis

Owing to the Demand for Technologically Advanced Ships, the Line Fit Segment Dominates the Market

By installment, the market is categorized into line fit and retrofit. The line fit segment will dominate the market during the forecast period. Various OEMs and manufacturers install diesel-electric propulsion systems while manufacturing. The segment will grow in the coming years due to technologically advanced ship requirements.

The retrofit segment is projected to show significant growth owing to the increased demand for retrofitting old propulsion systems with the advanced hybrid propulsion system.

REGIONAL INSIGHTS

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In terms of geography, the market is divided into North America, Europe, Asia Pacific, the Middle East & Africa, and South America. The North America market was valued at USD 0.59 billion in 2022. This region's growth is due to the rise in marine fleet size. Furthermore, the increased focus of various OEMs on R&D and implementation of hybrid propulsion systems is a major market driver. Furthermore, in April 2022, the Canadian federal and provincial governments invested USD 3 million to adapt efficient hybrid and electric engines to fishing vessels. The funding will enable fishermen to invest in hybrid systems at a significantly lower investment cost and will facilitate the adoption of hybrid fishing vessel systems by AKA Group and other companies operating in the hybrid propulsion market.

Asia Pacific is anticipated to show significant CAGR during the forecast period. The Asia Pacific marine hybrid propulsion market growth is owing to the increase in international trade coupled with increasing shipbuilding activities in China, India, Japan, and others. In March 2022, the Indian government approved financial assistance of USD 110.39 million for building 47 vessels under the Shipbuilding Financial Assistance Policy (SBFA).

Europe will experience significant growth during the forecast period. Europe is expected to have a significant marine hybrid propulsion market share during the study period. Germany, Italy, Russia, and France in Europe are major shipbuilding nations and are among the largest consumers of marine electronics. Europe has a growing demand for autonomous cruises and ships.

The market in the Middle East will witness substantial growth shortly. The rise in demand for investment in the oil and gas industries makes it a rising opportunity for offshore vessels, container ships, and bulk carriers. Furthermore, in November 2021, a new patrol vessel, Ribcraft, launched in Dubai, equipped with a unique hybrid-electric system provided by Transfluid and Elcome International.

The South America market is expected to grow at a moderate rate during the forecast period. The increase in contracts for marine hybrid propulsion in countries, such as Brazil and Argentina, is projected to boost market growth in the region. In November 2020, a Brazilian offshore support hybrid propulsion vessel operator, CBO, signed a contract with Wärtsilä to convert the CBO Flamengo to hybrid propulsion. This will be the first vessel in Latin America to be fitted with a high power battery pack for hybrid propulsion.

KEY INDUSTRY PLAYERS

Increase in Joint Ventures by Key Players to Boost Market Growth

The global market is highly fragmented, with the presence of various key players such as ABB Ltd. (Switzerland), BAE Systems (U.K.), Caterpillar Inc. (U.S.), General Electric Company (U.S.), Nidec Industrial Solutions (Italy), MAN Energy Solutions (Germany), Siemens (Germany), and others. Implementation of a marine hybrid propulsion system is the most important metric by which companies can compete. Other factors, such as technological advances and collaboration, help companies reduce manufacturing and installation costs and increase the number of system installments.

LIST OF KEY COMPANIES PROFILED

• ABB Ltd. (Switzerland)


• BAE Systems (U.K.)


• Caterpillar Inc. (U.S.)


• General Electric Company (U.S.)


• Nidec Industrial Solutions (Italy)


• MAN Energy Solutions (Germany)


• Siemens (Germany)


• Mitsubishi Heavy Industries (Japan)


• Wärtsilä Corporation (Finland)


• Steyr Motors (Austria)

KEY INDUSTRY DEVELOPMENTS:

• June 2022 – Wärtsilä and Stena signed a joint contract to build the largest hybrid vessel. Technology group Wärtsilä will supply hybrid propulsion systems for three new RoPax vessels currently under construction for Stena RoRo, Europe's largest ferry operator. The two ferries have a battery capacity of 11.5 MWh, making them the largest hybrid vessels in the shipping industry.


• November 2022 – The UECC launched a new vessel called 'Autoachieve' in Gothenburg to provide short-haul sea transport. The ship was in the port of Gothenburg and was introduced on 16 November. Once in service, the ship will call at the port of Gothenburg every week.


• September 2022 – L.R. granted Empresa Naviera Elcano Approval in Principle (AiP) for its patented steam hybrid conversion design for converting a steam turbine LNG carrier to a dual fuel efficient propulsion system.


• July 2021 - BAE Systems, a leading provider of electric propulsion, was selected by luxury sailing yacht builder Southern Wind to supply the electric hybrid power and propulsion systems for its new high-performance superyacht. BAE Systems will supply and integrate next-generation systems for the SW96 Nyumba, the first sea vessel to benefit from the company's latest propulsion technology.


• August 2020 - BOS Power received an order from its end customer, Norwegian shipping company AQS, with Skagen Ship Consulting for an electric/hybrid propulsion system for a new aquaculture vessel. Skagen Ship Consulting, working with Macduff Ship Design, is responsible for the design and equipment supply of an 18.5m hybrid service vessel. The 24-hour vessel will be built by TRX Marine in Yalova, Turkey, and will be used to supply Cermac's fish farm in Finnmark.

REPORT COVERAGE

The market research report provides a detailed analysis of the market. It comprises all major aspects such as R&D capabilities and manufacturing process optimization. Moreover, the report offers insights into the market trends and highlights key industry developments. In addition to the abovementioned factors, it mainly focuses on several factors that have contributed to the global market growth in recent years.

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Report Scope & Segmentation