Global Economics

SkySails: Greener Shipping with Kites


Harnessing wind power to tow ships—and reduce their fuel consumption

As a child, Stephan Wrage spent lots of time pursuing two of his favorite activities: flying kites and sailing on Hamburg's Alster lakes. He grew up to become an ardent conservationist, moving into an eco-friendly apartment building that recycles rainwater and uses solar energy for heating. So it's no surprise that the 34-year-old engineer eventually chose a career that combines all three of his passions.

Wrage is the founder of SkySails, a Hamburg company that makes huge kites used to tow cargo ships and tankers, harnessing wind power to reduce the vessels' consumption of conventional fuels by as much as 35%. SkySails is one of 39 companies chosen by the World Economic Forum as a 2008 Technology Pioneer.

Wrage's lightbulb moment came at age 14 as he sailed his dinghy on a local lake. "I was questioning why we were going so slow and thought: 'If I had a kite, we could go faster,'" he recalls. Because kites fly much higher than sails, they can harness stronger and more constant winds.

Beluga Watch

Wrage started SkySails in 2001 with his own money and has since raised $30 million from investors, including the ship financier Jan Luiken Oltmann Gruppe, an assortment of shipping companies, and private investors.

SkySails' kites, which measure from 150 to 1,000 square meters (1,615 to 10,764 square feet), are made of a lightweight, resistant material that the company has developed. They aren't cheap: Prices range from about $450,000 to $3 million, depending on size. But the company says they pay for themselves within three to five years by cutting fuel consumption and reducing emissions.

The Beluga Sky Sails, a 140-meter-long freighter owned by Germany's Beluga Group, is the first commercial vessel to be equipped with SkySails kites. The ship, which specializes in carrying heavy industrial equipment, is to be christened Dec. 15 in Hamburg.

Big Winner

Other shipping companies will be watching closely. "The reaction from ship owners has been, 'Yes, of course we will use it, because it saves oil,' so I believe they will sign contracts right away if the Beluga runs well," Wrage says. Results of the Beluga's fuel savings during the first few months of operation will be made public later.

If the system catches on, the environment could be a big winner. There are roughly 50,000 cargo and tanker vessels worldwide that consume an estimated 280 million tons of oil annually and produce 600 million to 800 million tons of carbon-dioxide emissions, some 5% of the world's annual total.

Customers are already lining up for SkySails kites. The company says all of its 2008 production capacity and half of its 2009 capacity already have been reserved. If the kites work as advertised and oil prices keep rising, this company is likely to enjoy smooth sailing.

Schenker is a BusinessWeek correspondent in Paris.

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