Marine Hybrid Propulsion Market Size, Share & COVID-19 Impact Analysis, By Type (Diesel-Electric, Gas-Electric, and Others), By Operation (Parallel and Serial), By Deadweight (Less Than 5K DWT, 5K-10K DWT, and More than 10K DWT), By Ship Type (Anchor Handling, Tug, Supply vessels, Platform Supply Vessel, Yachts, Motor Ferry, Cruise Liner, Small Cargo Ships), By Installation (Line Fit and Retrofit) and Regional Forecast, 2021-2028

The global marine hybrid propulsion market size was USD 3,053.2 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with marine hybrid propulsion witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a huge decline of 13.60% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 3,370.9 million in 2021 to USD 8,122.2 million in 2028 at a CAGR of 13.39% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.

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 along with alternate fuel, such as diesel and liquefied natural gas (LNG) utilized during the propulsion of naval vessels.

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

In December 2019, the spread of the COVID-19 pandemic was initiated from Wuhan, China. The rapid spread of coronavirus 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. Every year, China exports manufactured intermediate products to the U.S. and the 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, it is unable to arrange the remotely operated work system.

The shipping industry is facing unprecedented challenges due to the COVID-19 pandemic. According to the Willis Towers Watson 2020 report, there has been a drastic reduction of up to 50% of ship orders in China and South Korea. A reduction in maritime trading impacted the international supply chains due to the slowdown of major ports trade operations 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 maritime trade was expected to be 32% during the financial year of 2020. The demand for anchor handling tug supply vessels, platform supply vessels, yachts, motor ferry, cruise liner, small cargo ships, and 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 is decreasing from the first quarter of the financial year 2020.

LATEST TRENDS

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

A 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 is low drag and highly efficient pulling thruster and designed for service of up to 24 knots. This fuel-efficient propeller has excellent maneuverability and low noise and vibration levels. In addition to that, the Azipull thruster provides various characteristics such as fuel efficiency and hydrodynamic efficiency. Thus, the growing demand for fuel-efficient systems will boost the market for marine hybrid propulsion in the upcoming years.

In July 2019, ABS and MARIN launched a Joint Industry Project (JIP) to investigate the performance of wind-assisted shipping propulsion technologies. These technologies reduce the fuel consumption of a merchant’s vessel through the use of sails or some other device, thereby converting the kinetic energy of the wind into thrust.

DRIVING FACTORS

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

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

The technology has various advantages over the conventional system. It provides high redundancy and improved maneuverability, increased payload due to the flexible location of machinery components, environmental benefits due to reduced emissions, and lower fuel consumption. In addition to that, the technology provides enhanced performance in harsh ice conditions due to the maximum torque at zero-speed, reduces life cycle cost, and provides more comfort due to the reduced noise. Due to these advantages, there is a rising demand from the shipbuilding companies, which, in turn, would drive the market growth.

In May 2020, Daewoo Shipbuilding (South Korea) and Marine Engineering designed and developed an electric propulsion system for the KDDX destroyer and LPX-2 LHD projects of the Republic of Korea Navy. Therefore, the surging demand for electric propulsion technology from the shipbuilding industry is set to drive the growth of the market.

Increasing International Seaborne Trade Activities Will Boost Marine Hybrid Propulsion Market Growth

According to the United Nations Conference on Trade and Development (UNCTAD), maritime trade volumes expanded by 0.5 percent in 2019 and reached 11.08 billion tons. In the UNCTAD maritime transport report 2018, the global seaborne trade had expanded with a 4% growth rate, which was the highest from 2014-2018. The report indicated 17.1% growth in containerized trade, 2.4% growth in crude oil shipments, and 29.9% growth in dry bulk commodities.

Merchant ships are primarily used for seaborne trade. Asia Pacific is the largest seaborne trading region. In 2019, Asian seaports handled 6.9 billion tons of unloaded goods and 4.5 billion tons of loaded goods. Asian countries such as China, India, Japan, and South Korea have emerged as the leading countries in the shipbuilding sector. These countries accounted for 90.5% of global deliveries of naval vessels in 2017.

Furthermore, the share of developing economies in terms of seaborne imports rose to 65% in 2019, and the seaborne trade of developed economies reached up to 155 million tons. UNCTAD’s Maritime Transport Report 2020 projected that the maritime trade growth will expand by 4.8% in 2021. Propellers are the essential system of naval ships. Thus, the expansion of the naval sector due to rising international seaborne trade activities would propel the growth of the market.

RESTRAINING FACTORS

Fluctuations in Crude Oil Prices Expected to Hamper Market Growth

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

SEGMENTATION

By Type Analysis

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Diesel-electric Segment Dominated the Market in 2020

Based on the propulsion type, the market includes diesel-electric, gas-electric, and others. The diesel-electric segment held a dominant share of the market in 2020. 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 gas-electric segment is projected to register a higher CAGR by 2028 due to the increasing use of gas-electric propulsion in anchor handling tug supply vessels. Comparatively low price of gases used for gas-electric propulsion such as LNG and CNG is expected to increase the demand for gas-electric propulsion systems.

The others segment consists of the application and properties of the hydraulic drive system. The growth of the segment is due to the rising use of hydraulic drive systems to provide constant force irrespective of changes in speed.

By Operation Analysis

Parallel Hybrid Propulsion Segment to Hold Largest Share during the Forecast Period

On the basis of operation analysis, the market is segregated into parallel hybrid propulsion systems and serial hybrid propulsion systems. The parallel hybrid propulsion system segment is set to hold the largest marine hybrid propulsion market share during the forecast timeline. The dominance is due to the increasing 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 is projected to register a higher CAGR during the forecast period due to the increasing use of this system in unmanned underwater vehicles (UUVs). The prime features of this propulsion system are improved vessel performance, reduced emissions, lower maintenance costs related to engines, power rating, reduced noise levels and vibrations on board, improved long-term efficiency of the power supply system, and higher redundancy.

By Deadweight Analysis

5K-10K DWT Segment to Grow at Faster Pace during 2021-2028

Based on the 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. The growth is attributed to the ideal deadweight tonnage criteria of 5K-10K DWT for naval vessels, in which a hybrid propulsion system is able to operate easily.

Less than 5K DWT segment is anticipated to grow due to the rising demand for small vessels such as cruise, small cargo ships, lifeboats, and others.

The growth of more than 10K DWT is attributed to the increasing demand for container ships, tankers, large cargo vessels, and others. The surge in demand for such large vessels is owing to the growing international sea-borne trade.

By Ship Type Analysis

Anchor Handling Tug Supply Segment to Dominate during the Forecast Period

In terms of the ship type, the market is segmented into anchor handling tug supply vessels, platform supply vessels, yachts, motor ferries, cruise liners, small cargo ships, naval ships, submarines, ROVs, UUVs, and AUVs. The anchor handling tug supply vessels segment is expected to have a dominant share in the market during the forecast period. The dominance is due to the increasing demand for these vessels from emerging Asian economies, such as China and India.

Remotely operated underwater vehicles (ROVs), unmanned underwater vehicles (UUV), and autonomous underwater vehicles (AUVs) operate on lithium battery-based hybrid propulsion systems. The adaptability of hybrid marine propulsion for yachts, motor ferries, cruise liners, small cargo ships, naval ships, and submarines is set to propel the market growth. This growth is due to the ease of access of hybrid propellers and large deviations in the load profile of thrusters.

By Installation Analysis

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

Based on the installation, the market is classified into line fit and retrofit. The line-fit segment has dominated the market and is anticipated to be the fastest-growing segment during the forecast period. This growth is owing to the increasing adoption of the hybrid propulsion system in merchant ships. A hybrid propulsion system can be easily installed in the naval vessel and can improve the operation performance of naval vessels. The retrofit segment is expected to hold the largest share of the market during the forecast period. This growth is attributed to the surging demand for fuel-efficient naval vessels from several naval forces across the globe.

REGIONAL INSIGHTS

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The market size of marine hybrid propulsion in North America stood at USD 790.8 million in 2020. The growth of the market in this region is owing to the increasing procurement of offshore vessel support for the U.S. and Canada from the shipbuilding hubs of South Korea and China. Europe is anticipated to be the largest market during the forecast period owing to the presence of key players in this region, such as ABB Ltd., BAE Systems, 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 this region are increasing the funding, which will refuel the market growth. The rest of the world would register remarkable growth during the forecast period. This growth is attributed to the increasing spending on small cargo ships from Latin America and the Middle East & Africa.

KEY INDUSTRY PLAYERS

Innovative Research Ideology Implemented by Key Players to Propel Growth

The designing of fuel-efficient marine hybrid propulsion systems and 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 to boost 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 (The U.K.)


• Caterpillar Inc. (The U.S.)


• General Electric Company (The U.S.)


• 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:

• March 2021 – ABB Ltd. announced that the company’s hybrid power, propulsion, and shore charging system was selected by the Casco Bay Lines 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).

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The global marine hybrid propulsion market research report provides a structured analysis of the industry and majorly focusing on key aspects such as leading market players, product types, and leading technological trends of the product. 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 over the recent years.

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