Last Updated on: 5th July 2025, 11:33 pm
The September 2024 pre-feasibility study from the Maersk McKinney Møller Center on battery-powered vessels that crossed my screen today provides a welcome and thoughtful addition to the critical discussion of maritime electrification. The report rightly identifies battery-hybrid propulsion as an essential part of shipping’s decarbonization toolkit. It demonstrates a clear understanding that batteries offer significant efficiency gains over internal combustion and that partial electrification can sharply reduce greenhouse gas emissions and local air pollution. These conclusions are correct, insightful, and align with rapidly emerging market realities.
However, the core assumptions underpinning the economic modeling, specifically regarding battery system prices, fall short in two major ways.
The Maersk study built its economic analysis on a battery system price of around $300 per kWh. Even their sensitivity tests considered costs down to only $200 per kWh. At these price points, the economics of battery-electric hybrids for maritime transport, particularly on deep-sea and medium-range routes, appeared marginal or at best cost-neutral. The study concluded that hybrid container feeders, tankers, and bulk carriers could achieve breakeven economics against alternative-fuel vessels only under ideal circumstances or with substantial policy support. But this economic framing was already outdated.
In July 2025, the most recent auctions for large-scale lithium iron phosphate (LFP) battery storage systems in China cleared at just $51 per kWh. This is not a projection or hypothetical scenario, but a real-world market price confirmed through competitive tendering. This is after a December 2024 price point of $65 per kWh for a 16 GWh auction, just three months after the study was published.
The significance of this price cannot be overstated, as it fundamentally alters the economic feasibility landscape the Maersk Institute sketched out. At roughly one-sixth of the cost the Institute assumed, battery systems become dramatically cheaper than anticipated, profoundly changing the total cost of ownership calculations for battery-hybrid maritime propulsion.
LFP batteries and the Chinese BESS price point align well with the operational needs and safety requirements of maritime shipping. Unlike nickel-based chemistries used extensively in road EVs, LFP cells exhibit inherently lower thermal runaway risk, significantly improving maritime safety standards and simplifying onboard fire prevention systems. This reduced fire hazard translates into simpler and less expensive safety compliance, crucial in the maritime industry.
Further, maritime vessels, unlike road vehicles, have fewer weight and volume constraints, with only cargo vs batteries vs energy cost optimization providing a constraint, allowing the slightly lower energy density of LFP batteries to be comfortably accommodated. The simpler packs and robust thermal stability of LFP batteries align with shipping’s safety-driven regulatory environment, making their rapidly declining costs and proven reliability highly attractive for large-scale maritime electrification.
The 2022 Nature study from Berkeley Lab researchers found 3,000 km (1,600 nautical mile) journeys were breakeven at $50 per kWh. While somewhat flawed, it was indicative. The modeling from the Institute is in the right vein, as was the Berkeley Lab study, and both are welcomed as hybridization of major ships isn’t on the radar particularly, with dual-energy systems for larger vessels currently being LNG and VLSFO (very low sulfur fuel oil) or methanol and VLSFO.
As I noted recently with a mea culpa article, I’m now of the opinion that biomethanol will be the dominant liquid energy carrier for shipping as aviation will bid heavy vegetable oils required for both shipping fuel and aviation fuels up above the price of biomethanol. I’m late to this opinion, and hence the mea culpa. It’s going to be 5–6 times the cost of VLSFO. Meanwhile, e-methanol will be 9–10 times the cost of VLSFO in reality.
Recalculating the Maersk Institute’s breakeven analyses using the actual recent battery price of $51 per kWh demonstrates that battery-electric hybrids transition from being marginally competitive to significantly cost-effective. Taking the 1,100 TEU feeder vessel scenario the Institute analyzed as a baseline example, at their original $300 per kWh assumption, the hybrid configuration was roughly at parity economically with a methanol-fueled equivalent. With battery costs now proven at $51 per kWh, the battery hybrid emerges as about 24% cheaper over the 20-year lifecycle, translating into tens of millions of dollars saved per vessel. This is not a subtle difference. It transforms the economic narrative entirely.
This pattern repeats across other vessel types the Institute analyzed. For example, the 40,000 deadweight ton product tanker, previously just marginally competitive in the Baltic Sea trade at the higher battery cost, becomes highly advantageous at the new battery price. At $51 per kWh, total cost of ownership savings exceed 30% compared to a fossil-fueled equivalent, even when conservative electricity prices are assumed. Likewise, the previously uneconomic 35,000 deadweight ton bulk carrier trading around the Gulf of Mexico flips decisively into profitable territory, cutting total lifecycle costs by approximately 18%. Suddenly, vessels and routes that the Maersk Institute previously considered financially questionable become clearly and strongly viable.
Beyond simply improving economics for short-sea and regional routes, these new battery economics also stretch the operational envelope for battery-electric maritime propulsion. At $51 per kWh, vessel operators can economically justify significantly larger battery packs, extending electric sailing ranges and increasing battery shares from around 80% to potentially as high as 95% of the total propulsion energy. Routes previously limited by battery costs can now economically deploy batteries to cover far longer distances. The feeder ship studied, previously constrained economically to short regional loops, can now comfortably justify battery-powered propulsion for routes up to 1,700 nautical miles, roughly double the previous feasible distance. The tanker and bulk carrier segments similarly benefit, with economically feasible electric sailing legs increasing substantially.
1,700 nautical miles crosses the Atlantic. That’s with today’s China LFP BESS prices. That’s why the future will see Atlantic crossings fully battery powered with almost no biomethanol burned, and Pacific crossings will see 50% to 60% of route distance powered by batteries. It’s just going to be the cheapest option.
As a note, while this adjusts the Institute’s costs for batteries, it doesn’t touch their costs for methanol. They are leaning into literally the worst case cost scenario for methanol, synthesized methanol from green hydrogen and captured CO2, and as a result the real costs will be 9–10 times that of VLSFO. I’m pretty sure that just as they had too high costs for batteries, they radically underestimated the price of e-methanol, sticking solely to the energy efficiency ratio based on their Sankey diagram in figure 1 on page 11.
This is also rapid napkin math today, not a bankable technoeconomic assessment and modeling. The Institute should redo their study with better assumption about both battery prices and biomethanol prices, then republish the results to show more clearly and with greater rigor the breakevens. Anyone reading the Institute’s report should not consider it wrong, but right in direction and wrong in amplitude.
As such, the real break evens will be vastly more in favor of battery electric, as per my recent projections in the mea culpa article.
The implications of these cost dynamics extend beyond individual vessel economics into the broader maritime industry transformation. Shipping companies evaluating battery-hybrid propulsion can now focus less on cost-reduction compromises and more on maximizing efficiency, reducing emissions, and recovering cargo capacity. With battery costs drastically reduced, vessel designers gain new flexibility to prioritize operational performance over financial constraint. Moreover, lower battery costs amplify the positive impacts of carbon pricing mechanisms. Every incremental increase in carbon pricing now further tilts economics toward electrification rather than alternative fuels.
Battery cost is no longer the primary barrier to widespread maritime electrification. The critical bottleneck now shifts to shore-side infrastructure. Ports will need to rapidly scale up high-capacity charging stations, deploy substantial renewable energy generation resources, and potentially develop battery-swapping facilities to meet the surge in electricity demand from ships at berth. The incremental roadmap for port electrification I outlined in a recent series becomes much more economically urgent. The good news is that early adopters are already demonstrating feasibility, with ports in Scandinavia and China investing substantially in this infrastructure. This infrastructure shift is not merely an operational consideration but represents the key enabling factor for rapid, scalable maritime electrification.
Policy and regulatory frameworks must also keep pace with the shifting economics. The International Maritime Organization’s impending carbon-pricing mechanisms, the expansion of emission control areas, and tightening EU emissions standards all further bolster the economic attractiveness of battery-hybrid propulsion. Regulators and policymakers need to recognize that battery-hybrid ships, once seen as niche solutions, now represent the economically rational default for much of the fleet. Incentives, infrastructure investments, and regulatory policies must adjust accordingly, ensuring ports and power grids are ready to accommodate and support a rapidly electrifying maritime industry.
This rapid shift in battery economics mirrors the earlier revolutions in wind and solar power, where technology cost assumptions made only a few years prior quickly became obsolete as real-world market prices plummeted. The Maersk Institute’s directional insight was correct, their vision of battery-hybrid propulsion sound, and their technological feasibility assessments were thorough. But like many energy technology studies, their amplitude of change underestimated the speed and magnitude of battery cost reductions. In a matter of months, market realities have eclipsed cautious assumptions.
And like so many especially European studies, they radically underestimated the cost of synthetic fuels.
The consequence is clear: maritime electrification, driven by radically lower battery costs, is no longer an optimistic projection but a practical, economically compelling reality today. Shipping companies and maritime infrastructure planners that recognize this immediately and move decisively will capture a strategic advantage. Those that cling to outdated assumptions will find themselves increasingly disadvantaged as competitors leverage radically cheaper battery technology. Maritime electrification is no longer merely about long-term decarbonization goals; it is about near-term economic and operational rationality.
The Maersk McKinney Møller Center’s recent battery-powered vessels study deserves credit for recognizing battery hybridization as the strategic future of maritime shipping. However, its economic modeling was outdated when it was published. The real-world market price of batteries at $51 per kWh combined with the real world price of low-carbon liquid fuels fundamentally rewrites the maritime electrification landscape. The future of shipping has already arrived, and it is battery-electric. The only real question now is how quickly ports, shipbuilders, and operators adjust to embrace and profit from this new economic reality.
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