Nuclear power has been highlighted as a potential route to fossil-free shipping. But the economics count against the technology. Nuclear-powered vessels are significantly more expensive than both conventional and ammonia-fuelled ships, according to a new report from University College London’s Energy Institute.

Interest in nuclear power at sea is growing, including in Sweden. In October, for example, Lighthouse, RISE and SMTF organised a seminar on the potential role of nuclear power in the future of Swedish shipping. And it is not difficult to see why. With its very high energy density, low emissions and the possibility of operating a vessel for long periods without bunkering, the technology is clearly attractive in some respects. But nuclear power is not renewable, and major questions remain around waste, safety and regulation.

And then there is the price tag.

In the report Nuclear Reactors for Merchant Shipping: A Total Cost of Ownership Assessment of a Low-Carbon Pathway, researchers at the UCL Energy Institute calculated the total cost of ownership for large nuclear-powered container ships and compared it with conventional fuels and ammonia.

Their model shows that a conventional container ship costs $119.6 million, compared with $148.5 million for an ammonia dual-fuel vessel. A nuclear-powered vessel costs considerably more: from $228 million under the most optimistic assumptions to $582 million.

According to the report, reactor costs, ranging from around $2,600 to $12,400 per kWe, are the decisive factor and would need to fall by as much as 80 per cent for nuclear propulsion to become commercially viable. Cost reductions on that scale have yet to be demonstrated.

But even cheaper reactors would not be enough. For nuclear propulsion to have any chance of becoming competitive, the IMO’s Net-Zero Framework would also need to enter into force. In the most favourable scenario, nuclear propulsion could then become competitive around 2040. The low emissions from nuclear-powered vessels could generate revenue through the sale of surplus credits within the emissions trading system.

"Nuclear can compete, but only with much cheaper reactors and a global emissions policy, and neither exists yet. How both develop over the coming years will decide whether nuclear has a place in shipping”, says Farah Bziker, one of the researchers behind the study.

The study also questions another argument in favour of nuclear propulsion: that access to such large amounts of energy would make it profitable to operate container ships at significantly higher speeds. A nuclear-powered container ship travelling at 25 knots could indeed cover one-third more distance per year than one travelling at 15 knots, but at a very high cost. The required power triples, which means a larger and more expensive reactor is needed, wiping out the entire economic benefit of the higher speed.

There are also costs that are much harder to put a price on. Insurance and liability issues for nuclear-powered merchant vessels operating between countries remain unresolved. Experts interviewed for the study estimate that it could take 15 to 20 years for a mature insurance market capable of handling nuclear-powered shipping to develop.