ABB and Swedish nuclear energy firm Blykalla have signed a Memorandum of Understanding (MoU) to accelerate the introduction of lead-cooled small modular reactors (SMRs) for maritime applications, aiming to decarbonize the global shipping industry. This collaboration marks a significant step in developing clean energy solutions for the marine sector.

Technology Sector Focuses on Maritime Decarbonization with Nuclear SMRs

U.S. equities saw a notable development in the clean energy sector with the announcement of a strategic partnership aimed at revolutionizing maritime propulsion. ABB and Swedish nuclear energy firm Blykalla have formalized a Memorandum of Understanding (MoU) to expedite the integration of lead-cooled small modular reactors (SMRs) into the maritime industry. This initiative is designed to address the pressing need for decarbonization within global shipping.

The Event in Detail

This expanded collaboration builds upon an existing agreement between Blykalla and ABB, initially focused on developing lead-cooled SMR technology to support Sweden’s clean electricity goals. The current MoU extends this focus to marine applications, specifically targeting the deployment of Blykalla's Swedish Advanced Lead Reactor (SEALER). The SEALER is characterized as a highly compact and passively safe reactor, designed with inherent safety structures that do not necessitate operator intervention.

ABB's contribution to this partnership will leverage its extensive expertise in system integration, power distribution, control, and automation technologies, which are deemed crucial for the successful deployment of SMRs as shipboard solutions. The timing of this partnership aligns with recent regulatory movements; in June, the International Maritime Organization (IMO) administrations at the Maritime Safety Committee (MSC 110) endorsed recommendations to revise the Code of Safety for Nuclear Merchant Ships. This revision aims to accommodate advancements in nuclear technology, including SMRs, thereby facilitating their integration into commercial shipping.

Analysis of Market Reaction and Broader Context

This collaboration is poised to strategically position ABB as a frontrunner in maritime nuclear propulsion, potentially catalyzing a significant transformation within the shipping industry's energy landscape. It opens a new market avenue for SMR technology and is anticipated to attract further investment and innovation in clean maritime solutions. The broader market implications are substantial, signaling a tangible move towards the commercial viability and regulatory acceptance of SMRs for ship propulsion.

The maritime industry is increasingly evaluating nuclear energy as a viable power source to meet stringent decarbonization targets. While specific financial figures related to this particular MoU were not disclosed, the overall marine nuclear market was valued at $2.3 billion in 2022 and is projected to grow at an annual rate of 8.8%, potentially reaching $4.9 billion by 2031. Studies suggest that nuclear propulsion offers the lowest operational cost per tonne shipped for large vessels, largely due to the high energy density of nuclear fuel. This advantage is expected to offset the higher initial capital expenditures, which can be 3 to 5 times the value of a basic ship. Furthermore, nuclear electric ships are immune to carbon taxation schemes, providing a long-term economic benefit, though they may incur higher crewing costs due to specialized training requirements.

Expert Commentary

Industry leaders have voiced optimism regarding the partnership's potential.

Juha Koskela, President of ABB’s Marine & Ports division, stated, “SMRs hold significant potential to drive decarbonization, and our collaboration with Blykalla will help to advance their viability in maritime applications. Next-generation SMRs will enable innovative ship designs that can help to reduce emissions compared to vessels powered by carbon-based fuels. We are proud to partner with Blykalla on what represents an important step in shipping’s decarbonization journey.”

Jacob Stedman, CEO of Blykalla, echoed this sentiment: “We’re pleased to extend our partnership with ABB into this strategically important vertical. With our compact reactor design, we see a unique opportunity to lead the way in maritime nuclear propulsion – a solution uniquely positioned to meet the sector’s demand for clean energy.”

Looking Ahead

The agreement is expected to encourage further investment and innovation in nuclear marine propulsion, influencing future ship design, fuel infrastructure, and environmental regulations. Blykalla aims to achieve criticality for its first SEALER reactor by 2030 and commence serial production in the 2030s. The long-term vision includes generating up to 500 TWh of clean electricity annually, potentially cutting global CO₂ emissions by 0.5 gigatons each year.

While the path forward involves addressing regulatory hurdles, managing public perception, and developing novel business models, particularly for ship owners facing high upfront capital costs, the momentum for nuclear power in shipping appears to be growing. Other companies, such as UK-based nuclear start-up Core Power, are also advancing maritime nuclear programs, anticipating first orders for nuclear-equipped vessels before 2030.