HD Hyundai Marine Solution wins $37 million order for 'Chuk Power Generation System'

Supply Contract Signed for 17 LNG Carrier Vessels

Rendering image of the shaft generator system to be supplied by HD Hyundai Marine Solutions. Photo by HD Hyundai Marine Solutions

HD Hyundai Marine Solutions, a comprehensive solution company in the marine sector of HD Hyundai, has succeeded in securing a large-scale 'shaft generator system' order.

HD Hyundai Marine Solutions announced on the 22nd that it recently signed a $37 million (approximately 49.4 billion KRW) contract to supply 'shaft generator systems' for 17 LNG carriers from a Middle Eastern shipping company. HD Hyundai Marine Solutions plans to sequentially supply the ordered 'shaft generator systems' by 2028.

A shaft generator system is a system that generates electricity by utilizing part of the rotational power of a large engine used for ship propulsion. The large propulsion engine has higher fuel efficiency compared to medium-sized engines previously used as power sources, resulting in significant fuel cost savings. In particular, it is gaining attention as an eco-friendly ship power generation facility because it helps improve the Energy Efficiency Design Index (EEDI) and Carbon Intensity Indicator (CII), which are increasingly strengthened by IMO environmental regulations. The Energy Efficiency Design Index quantifies the amount of CO2 emitted to transport 1 ton of cargo 1 nautical mile during the ship design process. The Carbon Intensity Indicator quantifies the actual amount of CO2 emitted to transport 1 ton of cargo 1 nautical mile using operational information such as fuel consumption and sailing distance.

The future market outlook is also bright. The 'shaft generator system,' which was selectively installed by some shipping companies in the past, is now becoming standard for large gas carriers such as liquefied natural gas (LNG) carriers and liquefied petroleum gas (LPG) carriers. The applicable ship types are also gradually expanding to container ships, crude oil carriers, bulk carriers, and more.

According to the global market research firm Business Research Insight, the shaft generator system market size, which was about $245.81 million (approximately 328.4 billion KRW) in 2022, is expected to grow at a compound annual growth rate (CAGR) of 6.85%, reaching $365.8 million (approximately 488.7 billion KRW) by 2028. It is anticipated to grow even more steeply after 2030, when carbon emission regulations become fully enforced.

Previously, HD Hyundai Marine Solutions selected the 'shaft generator system' as a core new business area while pursuing business diversification in 2020 and has since actively entered the market. It has shown growth by securing orders for 4 ships in 2021, 2 ships in 2022, 9 ships in 2023, and 21 ships in 2024 (including this recent order).

In particular, this large-scale order is significant because it was approved by a Middle Eastern shipping company known for being very conservative in selecting onboard equipment and having strict quality standards. HD Hyundai Marine Solutions is reported to have received high evaluations for the organic technical combination and on-site response capabilities of key components of the 'shaft generator system,' such as generators and variable frequency drives (VFD).

An official from HD Hyundai Marine Solutions stated, "With the strengthening of carbon emission regulations, the demand for retrofitting 'shaft generator systems' on operating ships is also expected to expand," adding, "Since ship retrofitting is a strength of HD Hyundai Marine Solutions, we plan to strategically expand related orders."