Core Power Sees Maritime Nuclear Bridging Divide Between Decarbonisation Hawks and Doves

Mikal Bøe is CEO of Core Power. Image Credit: Mikal Bøe / LinkedIn

The use of nuclear reactors in shipping has the potential to appeal to bridge the widening divide between supporters and skeptics on decarbonisation, according to technology firm Core Power.

Over the past seven years Core Power has been developing the use of nuclear reactors in commercial shipping, at first as floating power plants and subsequently for nuclear-powered propulsion, and the firm hopes to see its first orders before the end of this decade.

The technology can appeal both to those disappointed and encouraged by the IMO's recent decision to delay a vote on its net-zero framework by being both a means of decarbonisation and a means of improving on current technologies, Mikal Bøe, CEO of Core Power, said at a press briefing event last week.

"We're starting to see this sort of entrenchment of two camps, almost like left and right in politics, where net zero says we've got to save the planet, and we've got to impact the way we do things to do so, and the other side says, actually the planet is going to be fine," he said.

"I see nuclear emerging in the gap, because it's the only thing that solves both; one that says, here is a way of not emitting anything and using a lot less resources to generate a lot more effect, and then on the other side, which is the anti-net-zero camp, we can say we're getting double or triple the generating capacity."

Earlier this year the firm hired Charlotte Vere, a former UK maritime minister and member of the House of Lords, as vice president for international relations.

"Whether you're in the UK or the US, the focus on nuclear is huge, and it's bipartisan," Vere said at the event.

"It's not a question of one side of politics or the other wanting to take forward the opportunities that we see in nuclear.

"Just look what's happening in the US; President Trump, like him or loathe him, is absolutely focused on it, because he sees it as a way of projecting American energy dominance throughout the world."

IMO Delay

The company has not yet seen signs of the IMO NZF delay dampening enthusiasm for nuclear reactors in shipping.

"I was a bit worried about that; when this first happened, I was on a business trip going around speaking to a lot of shareholders and some new companies as  well, a bit nervous about what they were going to say," Bøe told Ship & Bunker at the event.

"Are they going to say, 'Great, now we doing have to do anything, we can just carry on as usual'?"

"The reaction I got was different, it was one that said, 'Phew, thankfully now we don't have to go down this route; we can focus on what's important, and we can now focus on the things that give us a competitive advantage, the things that help us create a better industry.'"

Order Expectations

The firm has previously said it expects to receive its first reactor orders for ships by the end of the 2020s.

The first of these reactors is likely to be installed on a ship by 2033, Bøe said last week.

"The first installation that we've now got being designed is due for 2033, and then there's a lot of trialling and testing and validation et cetera," he said.

"And then that orderbook starts to build, so we assume that the first orderbook that comes form that will be in the region of 15 to 20 ships, which will then be constructed between 2034-5 to the end of that decade, and then it starts to accelerate from there.

"We see an opportunity to get to the 3,000 ship mark up to about 2060.

"It's not about meeting a 2030 target, it's about creating a product that demonstrates how you can really make a big difference in both shipping and power generation."

Costs

The company puts the up-front capital cost of a large ship with nuclear propulsion at about $700 million.

But because the reactors on these vessels will come loaded with enough fuel to run for at least the 25-year commercial life of this ship, this cost needs to be compared to the cost of buying a new conventionally-fuelled ship and all of the bunker fuel it will consume over its lifetime.

Using this calculation, nuclear propulsion could be competitive at bunker prices not far off today's level, Bøe said.

"All the models are pointing to being a competitor with bunkers at about $600/mt," he said.

The VLSFO price has averaged at about $585.50/mt at 20 leading hubs around the world this year, according to Ship & Bunker's G20-VLSFO Index.

Core Power's calculation does not include other savings and revenues that a ship with nuclear propulsion could generate, including EU or other GHG costs, and the potential to sell excess power supply to ports while at berth.

Another factor not included is the higher speeds at which these vessels could operate, meaning they can carry more cargo per year, as a ship with nuclear propulsion would not need to limit its speed to optimise bunker consumption and cut emissions.

"We should be designing ships that could do - for bulkers and tankers - 17, 18, 19 knots, and we should be designing container ships that should do north of 30 knots," Bøe said.

"It creates an efficiency in the industry that makes it more competitive."

Where Might Ships With Nuclear Propulsion Operate?

The issue of where the first ships with nuclear propulsion might operate is a complex one. 

Nuclear regulators in the state where the ship is flagged will put controls on where the ship can operate, and not every country is likely immediately to accept the arrival of ships with nuclear reactors at its ports.

Core Power sees potential in US-Europe and US-Asia routes as the likely first contenders for this type of ship.

"It's going to be Transatlantic or Transpacific," Bøe said.

"My bet is a sort of troika or quadrangle of South Korea, Japan, Canada, United States in the Pacific, with Australia appended to it because of the submarine deal that the Australians have done with the US and UK.

"And then I think in the Atlantic, it's the mogas trade - the faster movement of the mogas arbitrage in the Atlantic - which is basically LRs and MRs, and then container ships."