Wärtsilä’s technology leadership and industry leading service network position us well to capture opportunities arising from the increased environmental focus in the marine and energy industries.
In the Marine industry, increasing regulations and demand for green transport will lead to an unprecedented rate of change in new build and existing fleet. Companies’ environmental commitments to their customers and investors’ push for sustainability targets drive the demand for green sea transport. Decarbonisation is shaping the future of the marine industry with a targeted 50% reduction in GHG emissions from shipping by 2050.
Wärtsilä is developing a range of engine and fuel gas supply systems to help ship owners navigate the route to reduced greenhouse gas emissions – fuel flexibility and efficiency being at the centre of the development activities.
Wärtsilä’s fleet optimisation and safety solutions manage voyage performance with real-time decision support, helping our customers in achieving optimised routing and port operations with tangible fuel savings.
Wind and solar are growing rapidly as the dominant source of energy; renewable energy generation is expected to grow by 8x by 2050. Considering the intermittency of wind and solar, the transition to 100% renewables requires balancing power. Wärtsilä offers flexible power plant solutions, providing both baseload generation and balancing power to support an optimised transition to renewable energy. With our leading software platform, GEMS, we can help our customers optimise different generation assets, advancing the lowest overall energy cost.
Our balancing solutions can ramp up and down quickly, keeping the power grid stable using energy storage solutions for shorter firming periods and dispatchable gas engines for unlimited periods. Thermal balancing and energy storage are complementary technologies. Our market-leading technologies allow our customers to increasingly add renewables to their power system safely, to futureproof their assets, and to reduce emissions.
Moving up the service value ladder
Wärtsilä’s industry leading service network is a key enabler for superior uptime, reliability and total lifecycle solutions, all of which ensure customer success. The network provides preventive, responsive, and optimised service, as well as lifecycle upgrades and remote support throughout the lifecycle of an installation.
Wärtsilä has significant growth opportunities in all steps of the service value ladder. In transactional services, we support our customers by leveraging digital solutions for customer intelligence and automated lead management. We deliver enhanced performance through optimised maintenance and performance-based agreements, where we share the operational risk and guarantee performance by leveraging connectivity, big data, and analytics.
The green transition is expected to provide a more than EUR 2.5bn opportunity for retrofits and conversions of Wärtsilä’s running engine fleet over the next 5-10 years.
Pioneer and leading partner for decarbonisation
Wärtsilä has a strong track record in innovations, and our competences are instrumental in securing a sustainable future for the marine and energy sectors. There are strong synergies between marine and energy in research and development (R&D) and manufacturing of the new technologies. Throughout the decarbonisation transformation, we will continue to invest a stable ~3% of net sales in R&D annually.
As the decarbonisation transformation in the marine and energy sectors moves forward, there will be a need for a broad array of solutions. Our focus in-house is in developing core technologies, and through partnering with technology providers we are able to ensure a broad solution offering for our customers. Already today, Wärtsilä engines are able to run with biofuels, methanol, and up to 25% hydrogen blends. We expect to have engine concepts ready for operating with pure ammonia fuel in 2023 and with pure hydrogen by 2025. It is important to acknowledge that while much of the decarbonisation work in the marine and energy industries is still ahead, Wärtsilä already today has solutions and technologies that enable the transition to decarbonised shipping and 100% renewable power systems.
Set for performance
Wärtsilä’s strong financial position and liquidity support our capital allocation principles, and gives us the possibility to make strategic investments while offering solid dividends to our shareholders.
Wärtsilä’s financial targets were updated in 2021. The new targets reflect growth opportunities and increasing profitability:
We are committed to supporting our customers on their decarbonisation journey, while minimising our own environmental footprint. This is reflected in our ambitious ”Set for 30” decarbonisation targets: