Techno-Economic Modeling

Techno-economic Modeling

Bridging Technical Design and Economic Assessment

Techno-economic modeling evaluates technology investment options to assess the competitiveness of newbuilds or existing ships as new eco-designs enter into service or new regulations come into force. The approach simulates newbuild and retrofit technology decisions for a single vessel or a series of ships using regulatory compliance, payback period, net present value (NPV), return on investment (ROI) and other key criteria.

Our analysis bridges gaps between technical design and economic assessment to approach an optimal solution that will ultimately result in reduction of operation cost, increase of charter rates and increase of ship resale value.

Throughout the development and application of a techno economic analysis model, the client and ABS are engaged in a continuous dialogue to yield the most representative model and set of scenarios against which performance is assessed and upon which the investment decision is made. 

Typical questions that a techno-economic assessment may answer include:

  • What is the fuel OPEX comparison between LNG and HFO/MDO?
  • How would the fuel OPEX change with additional ECAs on the current trading route?
  • What is the NPV between a scrubber and LNG-ready retrofit?
  • What are the options for making a vessel LNG-ready to minimize initial CAPEX?
  • What would be the ROI of a bulbous bow retrofit for my container carrier?
  • What level of charter rate premium can I negotiate if I invest in an energy-saving device?
  • What is the life cycle asset value for my current vessel and how does this compare with a newbuilding and the OPEX benefits from the eco features?
  • What are the cost/benefits scenarios with upgrading energy efficiency devices and/or regulatory-driven mandatory equipment?