Norsepower

Norsepower

7. Affordable and Clean Energy 9. Industry, Innovation and Infrastructure 13. Climate Action

Overview

The innovation of the company is on the automation system as the Rotor is an improved version of the Flettner Rotor from 1926. The automation system calculates the wind’s conditions and when these are favourable, it launches the rotation of the turbine that creates a lift and pushes the boat, therefore reducing the fuel consumption. The innovation helps solving three SGDs: clean energy, innovation and infrastructure and climate action

Interview Video

Authors

Roxanne Cadenne--Feuillette

Roxanne Cadenne--Feuillette

Clara Sasportes

Clara Sasportes

Lia Strandberg

Lia Strandberg

School

Hanken School of Economics

Hanken School of Economics

Professors

Martin Fougere

Martin Fougere

Anna Dziuba

Anna Dziuba

Innovation

Norse Power’s Rotor Sail is a mechanical sail for large ships. This innovation is based on two components: the rotor and its linked automation system which measures permanently the wind conditions on the sea. The Rotor Sail is put on the deck of the ship. When the wind conditions are favourable, the automation system can launch the turbine. While the rotor is turning through this turbine, the device converts the wind into a lift. As the CEO explains us, “in a way, we are pushing the ship from water through the rotation of our device (Riski Tuomas 2019)”.

This innovation targets global shipping markets, with 3 main end-markets: tankers, roro ships (ferries designed to carry wheeled cargo such as cars, trucks, etc.), and cruise boats. For instance, Norse Power has already delivered products to Maersk (the first tanker operator in the world), Viking Line and Bore (Finnish companies). (Norsepower)

Norsepower’s innovation allows ships to reduce their fuel consumption. The end customers are thus able to save money on their operations while reducing their carbon emissions by 5 to 20% (Riski Tuomas 2019). The Rotor Sail can thus address 3 SDGs:

- SDG 7 (Affordable and clean energy) by using wind as an assistant of fuels in the shipping market

- SDG 9 (Industry, innovation and infrastructure) by developing a sustainable maritime transport industry

- SDG 13 (Climate action) by reducing ships’ carbon emissions

(Sustainable Development Goals)

Norsepower

Inspiration

In 1926, a concept related to the Rotor Sail innovation was developed under the name Flettner Rotor. But it had never been developed in a full scale, with a business case goal. More than 90 years later, a businessman named Tuomas Riski was looking for a feasible business concept.

“I wanted to find a business concept related to cleantech; a kind of innovation which would be a good business hopefully and which would also help us to solve the global issues with the impact on the environmental challenges. (Riski Tuomas 2019)

“That just happened to me… Some people had this idea of a mechanical type of sail, and we just picked it up and founded Norsepower and here I am." (Riski Tuomas 2019)

In fact, Tuomas Riski started and built entirely the project from 2012 with some external advisers who had previous experience. “We took like the norm physics and norm concepts [of Flettner Rotor] and we modernized it.” As a former Finnish champion of sail, Tuomas Riski was particularly aware and sensitive of this kind of technology. His knowledge helped a lot in the creation of the Rotor Sail.

Overall impact

A typical ship can reduce fuel emission and consumption 5-20% with the technology that Norsepower has innovated (Riski Tuomas 2019). Since Norsepower was established they have raised more than 20 million USD to facilitate development, piloting and commercialisation of their Rotor Sail Solution (Norsepower). The estimated long-term potential in fuel reduction by utilizing the technology that has been innovated by the company, can reduce emissions up to 60 megatons/year. This is approximately 6% of the entire global shipping emissions. This makes the overall impact of the innovation quite impressive (Riski Tuomas 2019). Norsepower focuses on developing continuously in their Rotor Sail Solution technology in order to deliver further optimisations. This includes increasing the potential in fuel savings and in reducing carbon emissions (Norsepower). The company’s goal is to reduce emission to zero (Riski Tuomas 2019).

The company has several evidences of their impact for reducing emission. The company has over 46 different action patents and has been awarded during years, for instance by WWF in year 2018 with the Climate Solver awards, as well as for Quality Innovation award in the category of Responsible and Renewable Innovation in year 2018 (Norsepower), just to mention a few. What more advocates the impact and possibilities this innovation can achieve is that they are funded by TEKES- the Finnish Funding Agency for Technology and Innovation, and by the European Commission’s Horizon 2020 Framework Programme for Research and Innovation (Norsepower).

Business benefit

The company has a huge potential market. Beyond the environmental-friendly impacts through the reduction of the CO2 emissions, shipping companies (the customers) also benefit from huge cost savings by decreasing their fuel expenses. The amount of these savings depends on how many rotors are placed on the ship. Typically, a payback period for such investment is 4-5 years. Norsepower has already delivered five products to three different customers for a total revenue of €2m. Rotor Sails are currently added to the ship once it has already been built and used, but the company would like to position itself at the design step since it would be more profitable and would probably bring more customers. To this extent, the company projects to further penetrate the market in the coming years and to achieve a €100m turnover by 2025. Norsepower has been fundraising for many years, but profitability should be achieved by 2020.

Looking at deeper in the production cycle, Norsepower has partnerships with two different suppliers. The first plant is in Poland (Central Europe) and aims at addressing the whole European market. The second is in China as this country is considered a huge potential market.

Finally, regarding the company itself, the business only relied on the Rotor Sail innovation. The founder was the only employee for many years, but Norsepower now employs 13 persons. 95% of the team ever hired is still working for the company. This high retention rate is based on strong values, as people want to be part of a company with “good concerns” acting in favour of sustainability. The strategy is to remain small, while the suppliers will be the ones who hire the most staff as sales grow. (Riski Tuomas)

Social and environmental benefit

The impact of this innovation can be enormous if the company achieves its long-term goal of decreasing the emissions by 6% (Riski Tuomas). Global shipping is an enabler of trade and globalization and also one of the most polluting industries. As climate change is more and more a critical subject, the changes have to happen. Changing this industry and making it more sustainable is critical for the world we know. This way this innovation benefits the society and the environment. Changes have to be made everywhere and this one opens the door to a more sustainable transport industry. The innovator Tuomas Riski says they are targeting the broader three of the sustainable development goals. More defined they are targeted within energy efficiency and in fuel consumption regarding emissions in shipping. The ship will always need its main engine. But the innovation can reduce the CO2 emission and have a positive impact on the environment. The company sees the innovation as good business where the mission and positive side effect of the innovation is having a positive impact on the environment.

While the emission of the entire shipping decreases, it is an action for combating the climate change (Sustainable development Goals). It will also encourage shipping companies to utilize the technology since using the technology will also be profitable for them by reducing the fuel consumption (Riski Tuomas). The benefits for society or environment of the innovation are described under heading three, where the sustainability goals are defined.

Interview Video

Interview

Tuomas Riski, CEO of Norsepower

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Norsepower

Norsepower

Helsinki, Finland, FI

Business Website: https://www.norsepower.com/

Year Founded: 2012

Number of Employees: 11 to 50

Norsepower is a company that designs and sells Rotor Sails with an automation system. The whole device, installed on the deck of the ship, aims at reducing the fuel consumption by 5 to 20% behind the lift provided by the rotation of the Rotor. The device is mostly on LNG boats, such as the Maersk Pelican, and on cruise ferries with Viking Line.