No, There Won’t Be Nuclear-Powered Commercial Shipping This Time Either

A while ago, I published my sexy-practical quadrant chart for maritime shipping decarbonization. Sharp-eyed readers noted an omission from it: nuclear power for commercial ships. While I make no claims to be encyclopedic, I do try to be relatively thorough, and it honestly didn’t occur to me to include it. Imagine my surprise that a private nuclear commercial shipping representative, CTO Giulio Gennaro of Core Power Energy, was on the panel with me at Stena Sphere’s technical summit in Glasgow.

Marine shipping megatonnes fossil fuels before refueling, chart by author

The panel of four included me with my projections of maritime shipping megatonnes by mode and category. Bulk will plummet with peak demand for the oil, gas, and coal that are 40% of it. The 15% of bulk that is raw iron ore will drop too, due to more scrapping everywhere and more local processing with renewable electricity and green hydrogen. Container shipping will rise, but not as much as bulks will fall. And global population growth will slow and stop between 2050 and 2070.

My take is that all inland shipping and two-thirds of short sea shipping will just go to battery-electric eventually. There will be hybrid solutions where when the batteries are replaced, the pure battery range will increase and less fuel will be consumed. And biofuels will take care of the rest.

But this is about the case Gennaro made for nuclear.

First, he was right that the biggest ships on the longest routes have the greatest carbon emissions. That’s somewhat of an obvious point, but it’s worth stating. My solution won’t be putting tons of batteries on ultra large crude carriers. Biofuels are fit for purpose, but it’s worth discussing what else might work on large problem areas. Only the biggest ships, doing the longest routes, with well known end points, and guaranteed requirements for long Pacific crossings would make sense for nuclear powering per Core Power, to paraphrase its assertions, hopefully correctly.

The characteristics he described pertained only to the biggest bulk carriers for oil, coal, and iron ore, it would appear. As noted, those segments are headed for very significant decline with peak coal demand in 2013, peak oil demand later this decade, and steel alternatives and rising bulk shipping prices resulting in iron ore mostly being processed nearer the mine in the future. Building a few, very large nuclear-powered ships for a radically declining market doesn’t slip smoothly through the waters of economic decision making.

As an indicator of that niche going away, while there are over 900 ultra large crude carriers in service, only one — yes, that’s not a typo, only a single ship of that class — was on order earlier this year. No one is buying them because everyone knows that they have a good chance of being stranded assets. As I found out this week, smaller carriers are being ordered, but the ones most suitable for nuclear aren’t.

He made it clear that they were arguing for small molten salt nuclear reactors (which I guess would be MSR SMRs?), but no one pressed him on commercial demonstration of that technology. For context, there are two prototype, non-grid connected, tiny MSRs in operation in China the last time I checked. This technology has been around since the 1960s and was never commercialized. And as the product doesn’t exist today, it won’t exist in any volumes for a decade at least. They have a preferred technology, but I see no evidence of a specific design. They appear to be doing more promotion of the idea rather than development of a product.

Claims that it’s safer or cheaper don’t stand up to much scrutiny when it’s never been deployed in earnest. The safety claim is interesting, as the sales pitch includes proactively dealing with port, governmental, shipping industry, and civilian concerns about nuclear safety. In my opinion, nuclear reactors are really very safe, and radiation from them even from meltdowns like Chernobyl and Fukushima just isn’t that much of a concern compared to global warming. It’s not those reasons that make me question nuclear energy.

But my informed opinion isn’t shared by the average Jill or Joe and governments. The last time commercial nuclear-powered freight was tried was the 1950s. New Zealand passed a law banning nuclear ships in its ports, and it’s still on the books. Turkey and Spain just said no. The UK demanded and got extra liability insurance. And commercial nuclear-powered ships sank without a trace. Since then, Chernobyl and Fukushima have occurred, and nuclear safety concerns still exist, although they’ve morphed somewhat. Governments are much more aware of exclusion zones covering hundreds of square kilometers and Fukushima’s full economic impact of a trillion USD. There is more interest in new nuclear again, mostly in Europe as it tries to get over its Russian gas addiction, but that doesn’t necessarily translate into excitement about nuclear ships in commercial ports. Among other things, security and regulatory requirements for ports go way up.

Having published extensively on the economics of small modular reactors and commercial maritime decarbonization, I know that any SMR technology would cost 3-5x the value of the basic ship and possibly more. A $100 million bulk carrier would cost upwards of $400 million with an SMR on board. Only ship owner-operators would find the use case potentially viable, as ship owners who lease their vessels would be eating the capital costs, but not getting all of the operational cost benefits. A novel business model would be required. In other words, another limitation on the market, as so many ships are leased by their owners to operators.

Gennara was asked about regulatory compliance for commercial nuclear, and tried to make the case that ship building and owners would be isolated from it, as Core Power would build, install, and lease the nuclear reactors to the ships, owning the liability, maintenance, and decommissioning. He asserted that this was like Rolls Royce and other engine manufacturers providing warranties and maintenance to its engines, but that’s at best analogous, and I don’t buy the claim that this doesn’t add significant regulatory burden to ports, ship owners, and ship leasers. Once again, he had an answer because it gets asked a lot, but the answer doesn’t hold much water, in my opinion. It’s like an industrial plant powered by a dedicated coal plant across a fence and operated by a third party claiming that the coal plant’s emissions shouldn’t be counted in their industrial process, a story I heard this week from Laurent Segalen, who spotted this example while he was running example deployments of Scope 1, 2, and 3 calculations, a framework he was integral to developing.

Next, of course, is that SMRs are supposed to last longer than ships. Generally nuclear reactors are 40-year solutions, but most big hulls have 25- to 30-year targeted lifetimes. One assumes the answer is yanking the power plant out of a ship that’s being decommissioned and dropped into another ship for a while, but the timeframes don’t really match up.

Last up is the expectation of using high-assay, low enrichment uranium, HALEU, as the fuel. That’s something that almost all SMR designs use, which should make it uncontroversial. However, one country has locked up the processing of HALEU. For a change it isn’t China, but Russia. Oops. The USA at least is attempting to create a non-Russian HALEU supply chain, but it’s not trivial to establish something like that.

Nuclear works fine in military ships and extreme condition ice-breakers, which are quasi-military, and getting more fuel is incredibly difficult or could be difficult. But Core Power’s pitch for commercial ships faces a declining addressable market. Pulling a big marine engine is non-trivial before you get into nuclear security and regulations, so more downtime for hulls. The proposal is a novel small modular reactor design, albeit of a proven, if rarely used, technology, so that’s another addition of risk. The cost requires a novel business model that isn’t used in the market, so yet another challenge to use. And the fuel supply is deeply at risk.

The question of nuclear for commercial ships is so obviously flawed from a business perspective that I didn’t even bother to include it in my quadrant chart of sexy vs impractical maritime decarbonization technologies. Perhaps that was an oversight on my part. Core Power managed to find $100 million in funding to pitch its case and try to make anyone buy it. That pays for the CTO to attend events like the one I was just at, I guess, but is so insufficient to deliver a working power plant for ships that it’s more of distraction. I might put it in the next version of those charts, but while it’s definitely impractical, I’m not sure if it’s trendy sexy and hyped, or like dirigibles is just a regurgitated idea that excites few people.