A new study by University College London shows the conditions under which nuclear-powered container ships could become economically viable. The key factors are falling reactor costs and effective CO₂ regulation.
The use of nuclear energy in merchant shipping could become economically viable from 2040 onwards. However, this would require significantly lower reactor costs and effective international regulation of greenhouse gas emissions. This is the conclusion reached by a recent study by the renowned Energy Institute at University College London (UCL).
For the study, entitled ‘Nuclear Reactors for Merchant Shipping: A Total Cost of Ownership Assessment of a Low-Carbon Pathway’, the researchers compared the total cost of ownership (TCO) of large container ships with a capacity of 14,500 to 19,999 TEU. The study examined nuclear-powered ships as well as conventional and ammonia-powered alternatives.
The calculations show that the use of nuclear power would not be economically viable without the International Maritime Organisation’s (IMO) planned Net-Zero Framework (NZF). Even assuming the lowest possible reactor costs, conventional ship propulsion remains cheaper.
The situation is different under the assumed conditions of the IMO regulations. According to these, nuclear-powered ships could generate additional revenue by selling surplus emission credits to other ships. Provided reactor costs are sufficiently low, nuclear propulsion would be the most cost-effective of the options examined from 2040 onwards.
Reactor costs as a decisive factor
According to the researchers’ assessment, economic viability depends primarily on the investment costs of the reactor technology. The figures cited in the literature range from around $2,600 to $12,400 per kilowatt of electrical power (kWe).
The lower end of this range presupposes industrial-scale series production and significant cost reductions. Given the significantly higher costs of newly developed first-generation reactors, however, nuclear propulsion is not the most cost-effective solution in any of the scenarios examined.
At the same time, the researchers see only a limited window of opportunity for a commercially viable market entry. The potential revenue from the sale of surplus emission allowances would be particularly high at the start of the operational period. However, as emission standards become increasingly stringent, these advantages would diminish.
Nor does a higher ship speed necessarily improve economic viability. At a speed of 25 knots, a container ship of this type could cover 32% more distance annually, but would require more than three times the installed propulsion power to do so. Costs would rise accordingly.
Unresolved insurance and liability issues
In addition to the technical and economic challenges, there are significant regulatory obstacles. The existing international liability conventions for nuclear installations were predominantly developed for stationary onshore reactors and cannot be readily applied to merchant shipping.
The experts consulted for the study do not expect a comprehensive international regulatory framework to be in place in time for the first nuclear-powered merchant ships. It could take 15 to 20 years for a fully developed insurance system to be established.
The authors also point out that their calculations may underestimate the actual costs of nuclear propulsion. Specific insurance costs, reactor maintenance and their integration into the ship’s structure were not taken into account in the cost model. Decommissioning costs were estimated only approximately.
According to the researchers, the future of nuclear power in merchant shipping therefore does not depend solely on technical progress. A reliable international climate policy, as well as binding regulations on liability, insurance and operation, are also crucial.
