Marine Hybrid Propulsion Market Size, Share & COVID-19 Impact Analysis, By Type (Diesel-Electric, Gas-Electric), By Operation (Parallel Hybrid Propulsion System) By Deadweight (Less Than 5K DWT, 5K-10K DWT), By Ship Type (Anchor Handling Tug Supply vessels, Platform Supply Vessel, Yachts, Motor Ferry, Cruise Liner, Small Cargo Ships, Naval Ships, Submarines,ROVs,UUVs), By Installation (Line Fit and Retrofit) and Regional Forecasts, 2020-2027

The global marine hybrid propulsion market size was valued at USD 3.53 billion in 2019 and is projected to reach USD 7.78 billion by 2027, exhibiting a CAGR of 10.09% during the forecast period.

Marine propulsion is a technologically advanced system used to generate thrust to move a naval vessel across the water. At present, 90% of the sea-going naval ship are diesel-powered. Still, ship operators are giving a preference to cut their fuel bills and reduce the environmental effect of their naval operations. The marine hybrid propulsion is a combination of a battery-powered propulsion system along with alternate fuel such as diesel and liquefied natural gas (LNG) utilized during propulsion of the naval vessels.

Shipping Industry is Facing Unprecedented Challenges due to the COVID-19 Pandemic

In December 2019, the spread of the COVID-19 pandemic initiated from Wuhan, China. The rapid spread of the coronavirus pandemic posed a major impact on the global marine industry. Western countries were enforcing nationwide lockdowns since February 2020. China occupied a Key position in the global maritime trade market as the world’s largest exporter.  Every year China exports manufacturing intermediate products to the U.S. and European Union. 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, they are unable to arrange the remotely operated work system.

Shipping Industry is facing unprecedented challenges due to the COVID-19 pandemic. According to Willis Towers Watson report 2020, there has been a drastic reduction of up to 50% ship orders in China and South Korea. Reduction in maritime trading has been impacted on the international supply chains due to the slowdown of major ports trade operation and delay of cargo service. Financial challenges are raised for ship-owners due to the certain fall in demand for shipping. According to the World Trade Organization (WTO), the fall in the maritime trade is expected to be 32% during the financial year of 2020. The demand for anchor handling tug supply vessels, platform supply vessel, yachts, motor ferry, cruise liner, small cargo ships, naval ships are decreasing due to the slowdown of trade activity. Marine hybrid propulsion is a prime system of a naval ship. There has been a direct impact on the market as the demand for naval ships are decreasing from the first quarter of the financial year 2020.

LATEST TRENDS

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Introduction of Technologically Advanced Fuel Driven Hybrid Propulsion System to Fuel Market Growth

The Volvo Penta have designed a hybrid concept for its IPS propulsion system. The IPS hybrid system is structured for powering vessels such as ferries, yachts, and supply boats, with a capacity of 8-13 liter engine range. This system improves the vessel performance, reducing noise levels and vibrations onboard, and improved the long-term efficiency of the power supply system.

DRIVING FACTORS

Increasing Operational Performance of Naval Vessels is Propelling Growth

Shipyard management and vessel owners are continuously investing in marine hybrid systems to improve the operational performance of naval vessels. The hybrid system is minimizing the power consumption of marine engines. The fuel-driven marine engines are able to handle a static load of around 65-80% of the overall capacity of a naval vessel. The reduction in the operational performance of the diesel-based marine engine is due to the interruption of wind and tidal sea waves. Moreover, introducing a battery-powered storage system act as a backup unit of the propulsion system. This battery-powered storage system is used to emulate the external load of the marine engines and help to reduce fuel consumption.

Growth in International Maritime Trade Driving Market

According to the United Nations Conference on Trade and Development (UNCTAD) Maritime Transport Report (2019), the global maritime trade is expanding at a rate of 4.1%, exhibiting the fastest growth since the financial year 2014. The expected growth of maritime trade during the period of 2019-2024 is 3.4%. The report exhibits 16.95 % growth in the containerized trade, 28.8% growth in the dry bulk carriers, and 2.3% growth in the container ships. Arise in the demand for maritime trade has further increased the demand for marine vessels. The hybrid propulsion is an essential system of the naval vessels. Therefore the increasing demand for container ships for maritime trades is boosting the market.

RESTRAINING FACTORS

High Development Cost of Hybrid Propulsion Restrict Market Growth

High development cost associated with the building of hybrid propulsion system is a prime factor hampering the growth of the market. Additionally, high maintenance cost of the hybrid propulsion system will also restrain the market. Dependence on heavy fuel as the primary fuel and high adoption rate of diesel-based propulsion system is likely to hinder the market in the forecast period.

SEGMENTATION

By Type Analysis

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Diesel-Electric Segment to Hold Remarkable Growth

On the basis of type, the market is classified into diesel-electric, gas-electric, and others. The diesel-electric segment held a dominant marine hybrid propulsion market share in 2019 owing to the fuel-efficient technology of diesel-electric propulsion. It is a highly adopted propulsion system in the naval vessels. The gas-electric segment is projected to register a higher CAGR by 2027 due to the increasing use of gas-electric propulsion in anchor handling tug supply vessels.

By Operation Analysis

Parallel Hybrid Propulsion Segment to Exhibit Impressive Growth

On the basis of operation, the market is classified into a parallel hybrid propulsion system and serial hybrid propulsion system. The parallel hybrid propulsion system segment held the largest share the forecast period. This dominance is due to the increasing demand of this propulsion type in the heavyweight ships such as platform supply vessel and cruise ships. The serial hybrid propulsion system segment is projected to register a higher CAGR during the forecast period due to the increasing use of this system in unmanned underwater vehicles (UUVs).

By Deadweight Analysis

Increasing use of Naval Vessels will Propel Segment Growth

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 is anticipated to project a significant CAGR during the forecast period, attributed to the ideal deadweight tonnage criteria of 5K-10K DWT for naval vessels, in which a hybrid propulsion system able to operate easily. 5K DWT is a deadweight tonnage capacity of small cargo ships and naval ships. Additionally, more than 10K DWT is a deadweight tonnage capacity of the platform supply vessel, yachts, and cruise liner.

By Ship Type Analysis

Increasing Use of Anchor Handling Tug Supply from China Will Register a Remarkable Growth

In terms of ship type, this market is segmented into anchor handling tug supply vessels, platform supply vessel, yachts, motor ferry, cruise liner, small cargo ships, naval ships, submarines, ROVs, UUVs, and AUVs. The anchor handling tug supply vessels segment is expected to hold the dominant share in the market. This is due to the increasing demand for anchor handling tug supply vessels from the emerging Asian economy such as China and India. Remotely operated underwater vehicles (ROVs), unmanned underwater vehicles (UUV), and autonomous underwater vehicles (AUVs) are operated on lithium battery-based marine hybrid propulsion systems. The adaptability of hybrid marine propulsion for yachts, motor ferry, cruise liner, small cargo ships, naval ships, and submarines is due to the large deviations in the load profile of thrusters.

By Installation Analysis

Increasing Adoption of Marine Hybrid Propulsion Technology in Merchant Ships to Enable Dominance of Segment

Based on installation, the market is classified into line fit and retrofit. The line-fit segment dominated the market and is further anticipated to be the fastest growing segment during the forecast period. This growth is owing to the increasing adoption of a hybrid propulsion system in merchant ships. The hybrid propulsion system can be easily installed in the naval vessel and improve the operational performance of naval vessels by using advanced electric motor in the propulsion system. The retrofit segment held the largest share during the forecast period. Increase in naval vessel orders and deliveries, economic growth in Asia-Pacific, the need for fuel efficient power rating propulsion technology is augmenting the market.

REGIONAL INSIGHTS

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The marine hybrid propulsion market size in North America stood at USD 1.01 billion in 2019, attributable to the increasing procurement of offshore support vessels for the U.S. and Canada from the shipbuilding hubs of South Korea and China. The market in Europe is anticipated to be the largest market during the forecast period owing to the presence of key players in Europe, which includes BAE Systems, General Electric Company, and Rolls-Royce plc. Asia Pacific is expected to exhibit healthy growth owing to the expanding shipbuilding industry in China and India. In addition to this, key market players in Asia-Pacific are increasing funds, which in turn, will boost the market. Rest of the world registers remarkable growth during the forecast period accountable to the increasing spending on small cargo ships in crude oil industry from Latin America and Middle East & Africa.

KEY INDUSTRY PLAYERS

Innovative Research Ideology Implemented by Key Market Players to Aid Market Dominance

The designing of fuel efficient hybrid propulsion systems and advanced lightweight materials for propulsion systems are the upcoming trends and forecasts in the market. A diversified product portfolio, coupled with the latest technology trends and secondary research methodologies accepted by key players, are the prominent factors boosting the market.

LIST OF KEY COMPANIES PROFILED:

• ABB Ltd. (Switzerland)


• BAE Systems (The U.K.)


• Caterpillar Inc. (The U.S.)


• General Electric Company (The U.K.)


• MAN Diesel & Turbo SE (Germany)


• Mitsubishi Heavy Industries, Ltd. (Japan)


• Rolls-Royce plc (The U.K.)


• Schottel GmbH (Germany)


• Siemens AG (Germany)


• Steyr Motors GmbH (Austria)


• Torqeedo GmbH (Germany)


• Wartsila Corporation (Finland)

KEY INDUSTRY DEVELOPMENTS:

• June 2020 –Vigor Fab and ABB has been signed a contract with Washington State Ferries to provide the hybrid-electric propulsion system for Olympic Class naval vessels.


• March 2019 – CWIND and ØRSTED have been Secured a Contract to provide a hybrid-powered propulsion system for Surface Effect Ship. The first vessel of the surface effect ship series will be delivered in the year 2024.

REPORT COVERAGE

The marine hybrid propulsion market research report is offering structured analysis of the market and majorly focusing on key aspects such as leading market players, product types, and leading technological trends of the product.

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Besides this, the report offers insights into the market, current trends, and highlights key industry developments. In addition to the aforementioned factors, the report provides several factors that contributed to the growth of the market over recent years.

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