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Calhoun: The NPS Institutional Archive

DSpace Repository

Theses and Dissertations 1. Thesis and Dissertation Collection, all items


Shipboard LED lighting a business case analysis

Cizek, Christopher J.

Monterey, California. Naval Postgraduate School

Page 2





Approved for public release; distribution is unlimited



Christopher Cizek

December 2009

Thesis Advisor: Nicholas Dew
Associate Advisor: John Mutty

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2. The Number of LED Fixtures

In addition to the high initial cost of the LED fixtures, the number of lighting

fixtures per ship is a significant cost driver and one of the main reasons only a small

portion of the fleet achieves cost effectiveness in the baseline scenario. Although fixture

counts for each ship class are estimated based on the most accurate data available, they

are still approximations. Therefore, a closer look at this variable is warranted. Varying

the fixture counts by ten percent does not change the cost savings for any class from

negative to positive or vice-versa. For the five conventional classes that show negative

cost savings in the baseline scenario, a break-even fixture count was computed as shown

in Table 10.




for Break-

DDG 1573 1285 18.28%
LSD 2919 1201 58.85%
LCC 3317 1394 57.98%
LPD 3335 2196 34.15%
LHA/LHD 7015 2091 70.19%

Table 10. Fixture Counts Required for Break-Even

In general, these findings show that a lower number of light fixtures per ship is

better (in terms of cost-effectiveness). Partial installations may also be desirable to take

advantage of potential cost savings while waiting for fixture prices to decrease to a more

acceptable level. Fixture count data collected for DDGs showed that approximately 300

of the 1573 fixtures per ship are series 331.1 (single lamp) fluorescent fixtures.

Comparing this to the break-even counts above, replacing just the two and three-lamp

fluorescent fixtures onboard DDGs with compatible LED fixtures would make financial

sense while reducing the requirements for fluorescent lamps to a minimum. A detailed

review of light fixture data for other ship classes may reveal similar partial installations


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3. The Cost of Fuel

a. Historical and Future Oil Prices

The prices of crude oil and refined petroleum products have historically

been very volatile. Small disruptions in the overall world oil supply, such as those

caused by the Arab oil embargo in the 1970s and first Persian Gulf War in 1991, typically

result in large price swings in world oil markets. The U.S. Energy Information Agency’s

(EIA) Annual Energy Outlook 2009 predicts that oil prices will rise over the long term,

with an 80% increase in the average price per barrel by 2030. The EIA addresses

volatility by presenting a high price case (with a 170% increase) and a low price case

(with a 30% decrease). Prices of diesel fuel are predicted to increase an average of 1.4%

per year through 2030 (EIA, 2009).

Holding all other assumptions constant but increasing the cost of fuel by

1.4% each year results in a modest increase in cost savings for FFG, CG, MCM, PC and

LCS classes. These are the same classes that break even at the current fixture price of

$1300. Since operational fuel costs rise proportionately for both lighting systems, no

new ship classes reach the break-even threshold with this change. Perhaps more

interesting is the effect of market volatility on fuel prices. Assuming a fuel price of $4.99

per gallon (80% higher than the 2010 standard price) results in positive life cycle cost

savings for the DDG and LPD classes. If fuel prices reach $6.51 per gallon, the Navy

fleet as a whole reaches the break-even point (with cumulative cost savings of zero).

Fuel cost savings in the first seven LED-equipped ship classes fleet are great enough at

this price to offset the high installation costs for the larger ship classes and lack of

operational savings for nuclear-powered vessels. Assuming a fuel price of $7.48 per

gallon (170% higher than the standard price) results in positive life cycle cost savings for

all conventional ships except the LHA/LHD class. If fuel prices fall to $1.94 (a 30%

decrease in the standard price), only four ship classes (FFG, CG, MCM, and PC) have a

positive life cycle cost savings with LED lighting system installation. Table 11

summarizes the break-even fuel cost by ship class. Holding all other assumptions

constant, at fuel prices above those listed LED lighting systems are more cost-effective

than fluorescent systems.

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