LISW23: Core Power Sets Out Case For Nuclear as Shipping's Answer to Decarbonisation

CEO Mikal Bøe set out his argument for the technology at a London International Shipping Week event on Thursday. Image Credit: Ship & Bunker

Nuclear firm Core Power has set out the case for its technology to be used as the means for decarbonising the largest ships in the commercial fleet.

The company hosted a well-attended event during London International Shipping Week on Thursday, with as many as 200 shipping-industry representatives in the audience.

At a press briefing at the end of the event, CEO Mikal Bøe set out his argument for the technology being a cheaper means of decarbonisation.

"If you run a Newcastlemax bulk carrier at 14 knots, using 65 mt a day [of VLSFO] for 25 years at say $700/mt on bunkers, you'll have spent north of $800 million; add carbon tax to that, and it goes north of a billion.

"If you switch to green methanol or ammonia, at the current cost of electricity -- green, not blue -- you're looking at a total fuel cost over those 25 years of more than $5 billion.

"If the same vessel could be run with a nuclear reactor ... for those full 25 years, without refuelling, and you consider the cost of fuel and installation and all of these things, you are going to come in just south of a billion."

That cost estimate includes the decommissioning cost at the end of the ship or reactor's life, Bøe told Ship & Bunker at the event. The estimate does not include the likely increased cost of insuring such a vessel, he said, but he does not expect that cost increase to be a significant part of the equation.

"I don't think it's going to be orders of magnitude more than hull and machinery P&I is today.

"K&R might be a little higher, because of the perceived effect of a K&R incident, but honestly I think insurance is going to be a bit of a rounding error in this whole thing. It is in the nuclear industry."

The company has raised $100 million in investment so far after being set up in 2018. It expects to have a demonstration of its technology ready by around 2030 to 2035, and plans to build a non-self-propelled floating nuclear power plant as its demonstration.

The financial case for the technology appears strong, if costs can be kept somewhere close to Bøe's estimates and the cost of the renewable power needed to make green ammonia and methanol does not fall significantly. One key challenge with the technology will be finding the financing to buy both a ship and all the energy it will consume over a 25-year commercial life all at once, rather than paying for bunkers steadily over the course of those 25 years.

But Bøe suggested new entrants to ship financing might be able to raise the money.

"I expect there to be a lot of new players involved," he said.

"Think about the cost of building a wooden sailing ship in 1850 versus an iron or steel steamship -- it was ridiculously more expensive, like 15 or 20 times more expensive to build.

"But they did it.

"Most people couldn't afford it, and they didn't survive.

"If it's a billion-dollar ship sailing for 40 years, but it doesn't have any fuel costs, who will step up to do that? I don't know.

"But what we are seeing now is large owners, large operators, large shipyards, large industrial corporations and the big commodity trading-houses stepping up and investing heavily in getting this technology up and running."

Former IBIA Director Unni Einemo joined the firm as its director of communications last month. Einemo has seen significant support for the technology during this week's events in London, she told Ship & Bunker.

"I'm so encouraged by all the positivity I'm seeing," she said.

"The overwhelming feeling I'm getting is people saying, yes, we see this makes sense."