Marine Hybrid Propulsion Market Size, Share & COVID-19 Impact Analysis, By Type (Diesel-Electric, Gas-Electric, Fully Electric), By Operation (Parallel and Serial Hybrid Propulsion System), By Deadweight (Less Than 5K DWT, 5K-10K DWT, and > 10K DWT), By Ship Type (Anchor Handling Tug Supply vessels, Yachts, Motor Ferry, Cruise Liner, Small Cargo Ships, Naval Ships, Submarines, ROVs, UUVs, AUVs, Ro-Ro Vessels, and Fishing Vessels), By Installation (Line Fit and Retrofit), By Power Rating (500 (kWh), Up to 1 (mWh), Up to 2-3 (mWh), and Above 3 (mWh)), and Regional Forecasts, 2022-2029

The global marine hybrid propulsion market size was valued at USD 3.93 billion in 2021. The market is expected to grow from USD 4.60 billion in 2022 to USD 9.99 billion by 2029, exhibiting a CAGR of 11.71% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with marine hybrid propulsion experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a stellar growth of 9.36% in 2020 as compared to 2019.    

Marine hybrid propulsion is a technologically advanced system used to generate thrust to move a naval vessel across the water. At present, 85% of the sea-going naval ships are diesel-powered, but ship operators prefer to cut their fuel bills and reduce the environmental effect of their naval operations. Marine hybrid propulsion is a combination of battery-powered propulsion systems and alternate fuel, such as diesel and liquefied natural gas (LNG), utilized during the propulsion of naval vessels.

COVID-19 IMPACT

Shipping Industry Faced Unmatched Challenges amid COVID-19 Pandemic

In December 2019, the spread of COVID-19 was initiated from Wuhan, China. The rapid spread had a major impact on the global marine industry. Western countries have been enforcing nationwide lockdowns since February 2020. China occupied a key position in the global maritime trade market as the world’s largest exporter. China exports manufactured intermediate products to the U.S. and the European Union every year. The maritime export industry of China requires an on-site presence of a skilled workforce, but due to the lockdown guidelines released by the government authorities, it is unable to arrange the remotely operated work system.

• According to the Willis Towers Watson 2020 report, there was a huge reduction of up to 50% of ship orders from South Korea and China.


• Furthermore, the United Nations Conference on Trade and Development report, Review of Maritime Transport 2020, stated that the global maritime trade was plunged by 4.1% in 2020 due to the unprecedented disruption due to COVID-19.


• According to the World Trade Organization (WTO) report, there was a drastic fall in maritime trade, nearly 32%, during 2020.

LATEST TRENDS

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Fuel-efficient Propulsion Systems in Naval Vessels is a Latest Trend

The fuel-efficient propulsion system is dependent on a highly adaptable mechanism. One of the key players in this market, Rolls-Royce, is adapting fuel-efficient propulsion mechanisms, and the company’s Azipull thruster is a perfect example of one such product. It a is low drag and highly efficient pulling thruster that is designed for up to 24 knots. This fuel-efficient propeller has excellent maneuverability and low noise & vibration levels. In addition, the Azipull thruster provides various characteristics such as fuel efficiency and hydrodynamic efficiency.

In November 2021, BAE Systems launched a next-generation propulsion and power system for the marine sector. The HybriGen propulsion and power system is a flexible solution that helps marine operators to reach zero emissions. It also improves vessel range electrical efficiency, simplifies installation, and increases propulsion power.

DRIVING FACTORS

Rising Demand for Electric Propulsion Technology from the Shipbuilding Industry to Drive Market Growth

Marine hybrid propulsions are primarily used in merchant ships, recreational boats, and naval ships. The electric propulsion system uses diesel generators and gas turbines. Diesel generators majorly generate three-phase electricity. It provides electric power motors to rotate propellers. The electric propulsion technology helps to reduce the unwanted noise generated by marine engines and removes the need for gearboxes and clutches.

The technology has numerous advantages over the conventional system. It provides high redundancy and enhanced maneuverability, environmental benefits due to reduced emissions, increased payload due to the flexible location of machinery components, and lower fuel consumption. Furthermore, the technology provides improved performance in harsh ice conditions due to maximum torque at zero-speed, is cost-effective, and provides more comfort due to reduced noise.

In November 2021, GE Power Conversion signed a five-year contract worth USD 125 million with the U.S. Navy to maintain hybrid and electric power and propulsion systems used in the U.S. Navy Military Sealift Command (MSC) vessels.

Increasing International Seaborne Trade Activities Will Boost Growth

Rising international seaborne trade and increasing demand for ships for maritime activities drive the marine hybrid propulsion market growth. According to the United Nations Conference on Trade and Development (UNCTAD), maritime trade volumes expanded by 0.5% in 2019 and reached 11.08 billion tons. In the UNCTAD maritime transport report 2018, the global seaborne trade expanded with 4% growth rate, the highest from 2014-2018. Additionally, UNCTAD’s Maritime Transport Report 2020 projected that the maritime trade growth would expand by 4.8% in 2021.

Merchant ships are mainly used for seaborne trade. Asia Pacific is the largest seaborne trading region. Asia Pacific’s prominence in the global merchandise trade was 41.0% of the world’s exports in 2021 and 36.8% of global imports in 2020.

Asian countries, such as South Korea, Singapore, China, and India, have emerged as the leading countries in the shipbuilding industry. These countries accounted for 90.5% of global deliveries of naval vessels in 2017.

RESTRAINING FACTORS

Fluctuations in Crude Oil Prices and Barriers in Supply Chain Projected to Hamper Market Growth

Diesel is a by-product of crude oil. The hybrid propulsion systems use diesel as a fuel. Volatility in crude oil prices is likely to negatively affect the growth of the market. In addition, the high development cost of the hybrid propulsion systems is also anticipated to restrain the market growth.

Furthermore, there were supply chain issues amid COVID-19 that hindered the market growth. Due to the pandemic, there was 7.5% fall in oil prices and 20% fall in commodity prices in March 2020. Thus, slowed down production of naval vessels due to decreasing demand for ships and reduced trade activities hampers the market growth.

SEGMENTATION

By Type Analysis

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Diesel-electric Segment Held Highest Shares in Market in 2021 due to Higher Adoption in Naval Vessels

Based on type, the market is divided into diesel-electric, gas-electric, fully electric, and others. The diesel-electric segment held the largest share in 2021. It is the technology where a diesel Internal Combustion Engine (ICE) drives a generator to produce energy for an electric motor in a naval vessel. The dominance of this segment is due to the fuel-efficient technology of diesel-electric propulsion. It is a highly adopted propulsion system in naval vessels.

The fully electric segment is projected to be the fastest-growing segment during 2022-2029. The segment's growth is due to the increasing environmental advantages from lower emissions and fuel consumption. It provides enhanced performance in harsh ice conditions due to maximum torque at zero speed.

The gas-electric segment will witness significant growth due to the growing use of gas-electric propulsion in anchor handling tug supply vessels. The low price of gasses used for gas-electric propulsion, such as CNG and LNG, is projected to increase the demand for gas-electric propulsion systems.

By Operation Analysis

Parallel Hybrid Propulsion Segment Dominated Market Owing to Rising Demand for Heavy Vessels

Based on operation, the market is divided into a parallel hybrid propulsion system and serial hybrid propulsion system.

The parallel hybrid propulsion system segment held the highest shares in 2021 due to the growing demand for this system in heavyweight ships such as platform supply vessels and cruise liner ships. In addition, the weight of the installation is much less for equivalent endurance. Another advantage is that internal combustion engines can be stopped when the electric mode is activated.

The serial hybrid propulsion system segment will showcase the highest growth during the forecast period. The growth is due to the rising use of this system in unmanned underwater vehicles (UUVs). The prime features of this propulsion system are reduced emissions, improved vessel performance, reduced noise levels and vibrations on board, lower maintenance costs related to engines, improved long-term efficiency of the power supply system, and higher redundancy.

By Deadweight Analysis

5K-10K DWT Segment Will Showcase Highest Growth during Forecast Period

Based on deadweight, the market is segmented into less than 5K DWT, 5K-10K DWT, and more than 10K DWT. Deadweight tonnage is an accurate measurement of the overall contents of a naval ship, including fuel, crew, passengers, and cargo.

The 5K-10K DWT segment holds the highest shares in 2021 and continues its domination during 2022-2029. 5K-10K DWT is the ideal deadweight tonnage that provides the exact load variation required for the hybrid system to perform at high efficiency, which is expected to drive the segment's growth.

The less than 5K DWT segment is projected to show significant growth. The growth is attributed to the growing demand for installing the hybrid propulsion system in small vessels such as cruise, small cargo ships, lifeboats, and others.

By Ship Type Analysis

Anchor Handling Tug Supply Segment Held Highest Shares in 2021 Owing to Increasing Demand from Emerging Economies

Based on ship type, the market is segmented into anchor handling tug supply vessels, platform supply vessels, yachts, motor ferry, cruise liners, small cargo ships, naval ships, submarines, ROVs, UUVs, Ro-Ro vessels, fishing vessels, and AUVs.

The anchor handling tug supply vessels segment held the largest shares in the market in 2021. The dominance is due to the growing demand for these vessels from emerging Asian economies such as China and India.

The Autonomous Underwater Vehicles (AUVs) segment will grow with the highest CAGR during the forecast period. Increasing use of AUVs due to their applications such as oil & gas exploration, reconnaissance, anti-submarine warfare, ocean mapping, and others drive the market growth.

By Installation Analysis

Increasing Adoption of Marine Hybrid Propulsion Technology in Merchant Ships to Drive Line-fit Segment

Based on installation, the market for marine hybrid propulsion is classified into line fit and retrofit.

The retrofit segment dominated the market and is projected to be the fastest-growing segment during the forecast period. An increase in demand for retrofitting old propulsion systems in the vessels with advanced hybrid systems to reduce fuel costs is anticipated to drive the segment's growth.

The line fit segment will witness significant growth due to increasing decommissioning and scrapping of obsolete marine vessels, which created a demand for the shipbuilding industry.

By Power Rating Analysis

Up to 1 (mWh) Segment to be the Largest Segment Owing to Rising Demand for Yachts and Platform Supply Vessels

Based on power rating, the market is classified into 500 (kWh), up to 1 (mWh), up to 2-3 (mWh), and above 3 (mWh).

The up to 1 (mWh) segment dominated the market in 2021. An increase in demand for platform supply vessels, yachts, and anchor handling tug supply vessels for various applications drives the market growth.

The 500 (kWh) segment will witness the highest growth during the forecast period. The growth is attributed to the increasing demand for ROVs, UUVs, and AUVs for various commercial and military applications.

REGIONAL INSIGHTS

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The market is segmented into North America, Europe, Asia Pacific, and the rest of the world based on region.

Europe has dominated the market with a market size of USD 1.23 billion in 2021. The increased number of ships due to the growing international seaborne trade led to rising demand for propulsion systems and propellers across Europe. Norway is the fourth largest shipping nation in the world. In January 2021, the country had 1,783 ships totaling 51.1 million deadweight tonnes.

Asia Pacific is projected to show the highest growth during the forecast period. The growth is attributed to the well-developed shipbuilding industry involved in the development of complex naval vessels, such as ferries, cruise ships, mega yachts, and submarines. Furthermore, the demand for marine hybrid propulsion in the defense sector increases due to ongoing territorial conflicts among countries such as China, India, and Pakistan.

The market in North America will showcase significant growth during 2022-2029. Increasing procurement contracts of naval vessels from the U.S Navy and rising demand for dry cargo and maritime tourism across the region propel the market growth.

The market for the rest of the world is estimated to witness moderate growth during the forecast period. Increasing maritime trade in the Middle East, Africa, and Latin American countries drives the market growth during the forecast period.

KEY INDUSTRY PLAYERS

Innovative Research Ideology Implemented by Key Players to Propel Growth

The designing of fuel-efficient marine hybrid propulsion systems and implementation of advanced lightweight materials for these systems are the upcoming trends in the market. An expanded product portfolio, coupled with the latest technology trends and research methodologies implemented by key players, is the major factor that boosts the market growth. Moreover, major players, such as ABB Ltd., BAE Systems, Wartsila Corporation, and others, are focused on transforming their products to offer cost-effective systems to their customers. Furthermore, the key players adopt strategies such as mergers, agreements, partnerships, and acquisitions to sustain their position in the market.

LIST OF KEY COMPANIES PROFILED:

• ABB Ltd. (Switzerland)


• BAE Systems (U.K.)


• Caterpillar Inc. (U.S.)


• General Electric Company (U.S.)


• MAN Diesel & Turbo SE (Germany)


• Mitsubishi Heavy Industries, Ltd. (Japan)


• Rolls-Royce plc (U.K.)


• Schottel GmbH (Germany)


• Siemens AG (Germany)


• Steyr Motors GmbH (Austria)


• Torqeedo GmbH (Germany)


• Wartsila Corporation (Finland)

KEY INDUSTRY DEVELOPMENTS:

• April 2021 - Danfoss Editron signed a contract with Sea Forrest Power Solutions Ltd (SFP) to provide the drive system that powers Singapore’s first plug-in parallel hybrid-electric fast launch vessel.


• March 2021 – ABB Ltd. announced that the Casco Bay Lines selected its hybrid power, propulsion, and shore charging system for its new 50m ferry. ABB’s hybrid-electric propulsion solution will help the ferry to operate in zero-emissions, battery-powered and diesel-electric modes, or in a combination of both.


• February 2021 – Naval architectural consultancy Chartwell Marine selected BAE Systems PLC to provide the electric hybrid power and propulsion system for a new maritime research vessel for the University of Vermont (UVM).

REPORT COVERAGE

An Infographic Representation of Marine Hybrid Propulsion Market

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The global marine hybrid propulsion market report provides a structured analysis of the industry and majorly focuses on key aspects such as leading market players, product types, and leading technological trends. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report provides several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation