Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3: I'm Jolle Wisenthal and I'm Tracy Alloway.
Speaker 2: Tracy, you know, we've been talking a lot about the
Speaker 2: US energy system for obvious reasons, at least when it
Speaker 2: comes to electricity. I don't know about you. I kind
Speaker 2: of feel like the more we talk about it, the
Speaker 2: less I understand it.
Speaker 3: Yes, yes, absolutely, I think there are a couple problems here. So, like,
Speaker 3: even beyond the actual different technologies for generating power, there's
Speaker 3: the patchwork of like how different grids work in different states.
Speaker 3: There's the different regulations, the different like interoperability and all
Speaker 3: of that. And then even if we look like beyond
Speaker 3: the US, it gets I guess even more different.
Speaker 2: Yes, well, I sort of wonder maybe we can learn
Speaker 2: something about the US by a little compared and contrast. Right,
Speaker 2: So if we look at the US and we still
Speaker 2: don't totally get how it works, maybe, I don't know,
Speaker 2: just to thought, maybe we'll learn something about the US
Speaker 2: by looking at some different system and then we have
Speaker 2: something to compare it to. It might be a weigh
Speaker 2: in by looking at the outside world.
Speaker 3: I'm a big fan of doing this, by the way,
Speaker 3: just to identify like different choke points in a particular
Speaker 3: domestic process. If you think that the US can't do
Speaker 3: something for whatever unidentifiable reason or I don't know, cultural
Speaker 3: like hold back, but if you look at a different
Speaker 3: country and they're doing it at scale, very very quickly,
Speaker 3: then I think you can learn a lot about yourself.
Speaker 2: Well, that's exactly right. And so one of the things
Speaker 2: again that comes up from time to time here in
Speaker 2: our conversations is nuclear and this is just one example
Speaker 2: of a source of power that may or may not
Speaker 2: be important in our future. But according to and I'm
Speaker 2: looking at a story from the Economist, over the past decade,
Speaker 2: China has added thirty seven nuclear reactors according to the
Speaker 2: International Atomic Energy Agency. I don't know, maybe we've added
Speaker 2: like two. I forget how many there are at that
Speaker 2: Georgia plant. A couple more maybe restarted. But you know,
Speaker 2: we talk all the time about nuclear and how hard
Speaker 2: it is and how hard the financing is and the
Speaker 2: labor force and the learning laws, and we forgot to
Speaker 2: you know, we forgot how to build them for various reasons.
Speaker 2: But that's not and it's so expensive. There's all these
Speaker 2: cost overruns every time. But apparently that is not the
Speaker 2: case everywhere, and that there are other parts of the world,
Speaker 2: particularly China, where they just keep building its scale, and
Speaker 2: maybe we could learn a little bit of how they
Speaker 2: do that, and how they finance it, and how they
Speaker 2: avoid forgetting how to build them.
Speaker 3: I think this is so interesting, this particular approach that
Speaker 3: compare and contrast, and it is absolutely true. I think
Speaker 3: the US has the most nuclear reactors out there, like
Speaker 3: almost one hundred or something like that, but it took
Speaker 3: us decades and now to build them, and as you
Speaker 3: rightly point out, we haven't built many new ones that recently. Meanwhile,
Speaker 3: China is adding more and more, and they make it
Speaker 3: look easy. I mean, I guess they are just like
Speaker 3: giant things to boil water. But you know, China really
Speaker 3: makes it look easy. So what can we learn from China?
Speaker 2: We really do have the perfect guests. By the way,
Speaker 2: we've had this guest on in the past. We talked
Speaker 2: to him about something completely different.
Speaker 3: Yes, this was during the depths of the COVID crisis, Yes,
Speaker 3: and we were talking to this person. He was based
Speaker 3: out in Shanghai, and we were talking basically about how
Speaker 3: they were getting food into apartment buildings and staying alive
Speaker 3: during that time.
Speaker 2: Yeah, so that was an interesting sort of logistical story
Speaker 2: and its own right. If you're under complete lockdown in
Speaker 2: a Shanghai apartment building, how do you actually get food?
Speaker 2: And anyway, I'm thrilled because now we're recording this December seventeenth,
Speaker 2: twenty twenty four, we are talking to him in completely
Speaker 2: different times.
Speaker 3: He's been freed from lockdown.
Speaker 2: He is now here in studio with us, So we
Speaker 2: are going to be speaking with David Fishman, senior manager
Speaker 2: at the Lantau Group. He's based in China typically where
Speaker 2: he mostly focuses on the Chinese energy system. So literally
Speaker 2: the perfect guest and a repeat guest. So, David, thank
Speaker 2: you for coming on. Odd lads, welcome to New York City,
Speaker 2: welcome back.
Speaker 4: Thank you for having me.
Speaker 2: What do you do the only other time we talked
Speaker 2: to you, The only thing we knew about you is
Speaker 2: that you were figuring out how to get food into
Speaker 2: your apartment. What do you do now when that's no
Speaker 2: longer the pressing issue?
Speaker 4: Yeah? Sure, So I work at a company called the
Speaker 4: Landau Group. We are an economic consultancy. We're doing power
Speaker 4: and gas consulting across APAC and so I'm focused on China.
Speaker 4: I'm in the China office. We're doing the business of electricity.
Speaker 4: So for me, that means either somebody who wants to
Speaker 4: build an electricity generation asset, wants to sell one, wants
Speaker 4: to sell a portfolio of assets, wants to invest in one,
Speaker 4: maybe through a fund or as some other type of
Speaker 4: investment product. And then on the what we'd call our downstream,
Speaker 4: who uses the electric city, right, your major multinationals, your factories,
Speaker 4: anybody who uses electricity as an input to produce things.
Speaker 4: So we're working in the business of electricity, trying to
Speaker 4: make buying and selling electricity more economic for everybody involved.
Speaker 3: Well, I'm just going to dive into the nuclear aspect
Speaker 3: of this.
Speaker 4: Then.
Speaker 3: You know, Joe gave us some contours around how much
Speaker 3: China is currently building. When did China decide that it
Speaker 3: was interested in nuclear and what was the sort of
Speaker 3: like thought process the strategy about how nuclear would fit
Speaker 3: into everything else, including the coal power that China is
Speaker 3: famous for using.
Speaker 4: Yeah, I mean the history of the Chinese civil nuclear
Speaker 4: power industry goes back to stems back to the eighties.
Speaker 4: So looking at you know, the mid to late eighties
Speaker 4: is when China was signing agreements to bring in its
Speaker 4: first nuclear reactor technology. At the time, it was there
Speaker 4: are two different paths that were pursuing. They signed an
Speaker 4: agreement with Framatome, a French company, to bring over one reactor,
Speaker 4: and they developed domestic reactor with at the time the
Speaker 4: Soviet Union to have a domestic technology tree as well.
Speaker 4: So in the eighties, China was actually experiencing some pretty
Speaker 4: rapid economic growth, especially in the late eighties, and looking
Speaker 4: to expand its power supply rapidly, and at the time
Speaker 4: it was quite tight, and so nuclear was seen as
Speaker 4: a potential way to expand the power supply and get
Speaker 4: into a power generation for what was at the time
Speaker 4: something very new for China. What did you so?
Speaker 2: I mentioned, literally from just reading the first paragraph of
Speaker 2: a paywalled economist story that number of about thirty seven
Speaker 2: new nuclears saw one just like I just google how
Speaker 2: many new clear reactors are big built in China? Scrolled
Speaker 2: down until I find something in the Google search. This
Speaker 2: is how the research is done, folks. Well, why don't you,
Speaker 2: in your words give us a sense of the size
Speaker 2: and scale of Chinese civil nuclear generation and where it's going,
Speaker 2: and then sort of like the role it generally plays
Speaker 2: in the overall portfolio there, sure describe.
Speaker 4: It, Yeah, sure so. So nuclear in China has the
Speaker 4: interesting status of being both relatively large and still somehow small.
Speaker 4: Large in the sense that it's one of the largest
Speaker 4: operating fleets in the world. Right, You've got you know,
Speaker 4: fifty almost sixty reactors operating. We're talking about nearly sixty
Speaker 4: gigawatts of generation capacity. But then in the context of
Speaker 4: China's entire generation fleet, right, they've got well over one
Speaker 4: thousand gigawatts of coal and then many more thousands of
Speaker 4: gigawatts of wind and solar. So it's both large in
Speaker 4: the context of the world, but also small. And that's
Speaker 4: the case for a lot of things in China. The
Speaker 4: thing that can be large in China can also And what's.
Speaker 2: The ambition for you know, looking out, you know, in
Speaker 2: a five year plant, I don't know how whether they
Speaker 2: do that for energy? Two, where is nuclear potentially? How
Speaker 2: much could nuclear be a thing? What's the size and scale.
Speaker 4: Of the ambition?
Speaker 1: Yeah?
Speaker 4: Sure so long term, I mean it depends on how
Speaker 4: your energy planners and your economic planners and vision the
Speaker 4: long term makeup of the grid. What type of power
Speaker 4: are we using in twenty fifty. Is it going to
Speaker 4: be a little bit or a medium amount or a
Speaker 4: lot of nuclear? So it's scenarios, right, and China has
Speaker 4: scenarios too for a high end a low end. So
Speaker 4: the recent scenarios that I've seen. Originally it was saying
Speaker 4: no less than three hundred gigawatts two hundred and fifty
Speaker 4: three hundred gigawats, so two hundred and fifty or three
Speaker 4: hundred reactors, right, two hundred and fifty units. So the
Speaker 4: United States has just about one hundred right now. So
Speaker 4: if they got to that scenario, it would be about
Speaker 4: two and a half times what the US has right now.
Speaker 3: So what's the process by which a new nuclear reactor
Speaker 3: gets built in China? And how much does it differ
Speaker 3: from what goes on in the US.
Speaker 4: Sure, well, the steps of the process are actually very similar.
Speaker 4: This is these are international best practices for how you
Speaker 4: build these types of infrastructure. So you have to choose
Speaker 4: a site, You're going through a sighting process, an environmental
Speaker 4: impact report. Maybe you've got to make sure the local
Speaker 4: sea life is not going to be affected by warm
Speaker 4: water being discharged, there's no endangered species nearby. All those
Speaker 4: different aspects. So you choose your site. That takes a
Speaker 4: few years. You have consultation period. There's a period for
Speaker 4: the public to maybe express their dissatisfaction. This happens in
Speaker 4: China too. And when the site is finally selected, then
Speaker 4: you start pre construction. You can level the site, you
Speaker 4: can connect communications utilities, you can do all your pre groundwork,
Speaker 4: and then we're waiting for a really key milestone called FCD.
Speaker 4: That's first concrete date, and that's when the first barrel
Speaker 4: of safety related concrete is poured at the site, and
Speaker 4: so that would be the beginning of your construction of
Speaker 4: your containment building. And so from FCD to your full
Speaker 4: construction period, you do civil construction, you do installation, you
Speaker 4: have commissioning. Maybe you encounter some issues during commissioning, you
Speaker 4: do troubleshooting right and eventually you fully connect, you connect it,
Speaker 4: you load your fuel, you have your first criticality the
Speaker 4: first time that you know fission starts in the reactor.
Speaker 4: Then you connect it to the grid and then you
Speaker 4: get up to one hundred percent power and you got
Speaker 4: a nuclear power plant. If you do it, we're you
Speaker 4: looking at ten to twelve years. See, if you do
Speaker 4: it not so quick, you're looking a lot more than that.
Speaker 2: So it takes a long time in China too. So
Speaker 2: you know, we look at you as construction builders like,
Speaker 2: oh can't we It's a log process anywhere you look.
Speaker 2: I want to ask about the financing. So if there's
Speaker 2: a new who's paying for this? And also how are
Speaker 2: they selling this energy? Because one thing I get the
Speaker 2: impression of is that setting aside the cost of building
Speaker 2: a new nuclear reactor, which is an expensive, time consuming process.
Speaker 2: The electricity market structure also seems to matter a lot,
Speaker 2: because you need a certain amount of guaranteed off take,
Speaker 2: you need a certain amount of price stability if the
Speaker 2: price drops to zero for a long time, because there's
Speaker 2: it's very sunny and windy in that area and suddenly
Speaker 2: you're that's screwing with the economics of it. And so
Speaker 2: market structure and financing are both important. Talk to us
Speaker 2: about how that works in China versus here.
Speaker 4: Right? Sure, so the builders, right, the companies that are
Speaker 4: constructing and eventually owning the assets are all state owned enterprises. Okay,
Speaker 4: so you've got these great big sos. Their job is
Speaker 4: to own and operate nuclear power plants, and so when
Speaker 4: they go out to secure financing, of course they're securing
Speaker 4: financing from state owned banks as well. They're going to
Speaker 4: be getting very preferential loan treatment, right, very low percentage
Speaker 4: rates maybe two percent, one and a half percent, things
Speaker 4: like that. For a huge infrastructure like that, we're talking
Speaker 4: billions of rate.
Speaker 2: Not the spread.
Speaker 4: Okay, keep going, so very very low rates because again
Speaker 4: they have a mandate to build. This is state banks,
Speaker 4: state infrastructure, and state builders. They need to build these things.
Speaker 4: And then when they're going out to sell power right now,
Speaker 4: they're given a guaranteed on grid rate. So the grid
Speaker 4: company and the power regulators say, when you complete your
Speaker 4: plant and you start selling power, we will make sure
Speaker 4: you receive this much for every kilo what hour of
Speaker 4: power that you send into the grid. Long term, they
Speaker 4: want to marketize it. They want to have that exposed
Speaker 4: to the vagaries of the markets the same way that
Speaker 4: you would see maybe in the United States or Western Europe.
Speaker 4: And that will be an adjustment for China's nuclear industry.
Speaker 4: Historically they have only operated on this kind of fixed
Speaker 4: feed and rate.
Speaker 3: So, I mean, that's a pretty big comparative advantage if
Speaker 3: you're getting subsidized financing from a state owned enterprise or
Speaker 3: something like that. Plus at the moment you have that
Speaker 3: guaranteed off take, even though they might want to move
Speaker 3: to a market based system before. It also strikes me
Speaker 3: that there are a few other potential comparative advantages, like
Speaker 3: lots of ready labor, lots of manufacturing capacity presumably that's
Speaker 3: able to make the stuff you need for these things.
Speaker 3: Walk us through, like all the different advantages that China
Speaker 3: has in this process.
Speaker 4: Yeah, sure, So if you maybe you've seen before or not,
Speaker 4: if you look at one of those like stacked bar charts,
Speaker 4: that it compares all the cost components of you know,
Speaker 4: building one of these things in China versus Europe versus
Speaker 4: the United States. It's not like you'd point to any
Speaker 4: single component of the stacked bar and say, ah, that's it.
Speaker 4: That's the key. That's why they're so cheap. Every single
Speaker 4: component is cheaper, right, You've got your cost of capital
Speaker 4: is lower, You've got your construction timeline is so tightly managed.
Speaker 3: Right, so you're saving on interest costs exactly.
Speaker 4: And the sooner you can connect to the grid and
Speaker 4: start selling power. That's when you start making your money back. Right,
Speaker 4: So every day that you go over your construction schedule,
Speaker 4: it's a hunt. We say in the US about a
Speaker 4: million dollars of missed power sales and then also about
Speaker 4: a million dollars of interest payments. So here you got
Speaker 4: this two million dollars spread every day over your construction
Speaker 4: schedule that was originally planned. Like, that's just mind boggling.
Speaker 4: Then we look at the production capacity, right, China's incredible
Speaker 4: industrial production capacity. We're talking about these heavy forged components,
Speaker 4: and maybe only a couple of companies in the whole
Speaker 4: world can make things like the reactor pressure vessel, the
Speaker 4: steam generators, the pressure risers, the primary piping, the reactor
Speaker 4: cool and pump, all these things. And there's like three
Speaker 4: companies in the world that can make these and now
Speaker 4: at this point, several of them are in China. And
Speaker 4: when they need to prototype, when they need to iterate,
Speaker 4: when they need to troubleshoot something, it's all in one
Speaker 4: in industrial cluster. It's all a company and its subsidiaries
Speaker 4: or its sister partner companies, right, and so they can
Speaker 4: quickly trouble through things really quickly. So that's going to
Speaker 4: be your industrial production component very strong. You've got you know,
Speaker 4: people work longer hours, they'll work through weekends, they'll work
Speaker 4: through holidays. China is really really competent at building very
Speaker 4: large construction, very large infrastructure. Right it could be a dam,
Speaker 4: or a bridge, or a highway or a high speed railway,
Speaker 4: or a nuclear reactor. When it comes to the construction
Speaker 4: know how of being able to do it on time
Speaker 4: and like an oiled machine, they're winning there too. And
Speaker 4: then we talk about the actual way they're building the
Speaker 4: nuclear power plants. There's something really interesting here. This was
Speaker 4: actually pioneered by Westinghouse out of the United States, something
Speaker 4: called modularized construction, where on site or off site you're
Speaker 4: prefabricating large portions of the reactor, portions of the containment building,
Speaker 4: and so you can work on individual components at the
Speaker 4: same time, bring it to site, and then you get
Speaker 4: the largest crane in the world that lifts this massive, massive,
Speaker 4: pre assembled component into place. When you're able to work
Speaker 4: like that, you can cut down the construction schedule. Even
Speaker 4: more interestingly, Westinghouse pioneered that that they haven't been really
Speaker 4: successful in implementing it in their recent builds. China, on
Speaker 4: the other hand, learned from Westinghouse and has been very
Speaker 4: successful with this modulized construction approach.
Speaker 2: Can you talk more about that, because it's very intuitive, right,
Speaker 2: the idea that the more you can build at the
Speaker 2: factory and the less you have to build on site
Speaker 2: makes it easy and a lot of the so far,
Speaker 2: it seems like mostly hype about small modular reactors in
Speaker 2: the US is sort of on this idea, like why
Speaker 2: don't start every project from scratch? Why is it apparently
Speaker 2: hard even though in theory that seems very obvious because
Speaker 2: I don't know if there actually are any modular reactors
Speaker 2: in the US despite the sort of intuitive appeal.
Speaker 4: So I think I gotta clarify here, there's modularized construction,
Speaker 4: and there's small modular reactors. Okay, So SMRs or small
Speaker 4: modular reactors, they refer to a situation where the entire
Speaker 4: reactor is encased in a single unit.
Speaker 2: Oh, okay, got it. Yeah, But it's still this idea
Speaker 2: that the lot of the fabrication process happens not at
Speaker 2: the site itself. Again, something that feels highly intuitive and
Speaker 2: apparently easier so than time.
Speaker 4: Well, so my understanding from the Westinghouse design approach when
Speaker 4: they used this for the first time in designing the
Speaker 4: AP one thousand technology that we're built here in Vocal
Speaker 4: in the United States. Is one of the major barriers. Well,
Speaker 4: there's terveral. There's always going to be regulatory barriers, right,
Speaker 4: it's a new way of doing things. Anytime it's a
Speaker 4: new way of doing things, the regulator is going to
Speaker 4: want you to jump through a million hoops to try
Speaker 4: to clarify and justify that what you're doing is defensible
Speaker 4: and safe. So you've got that one, of course, But
Speaker 4: then the actual logistics of lifting these massive, massive, we're
Speaker 4: talking thousands of tons of prefab components. They actually had
Speaker 4: to design and then especially contract the world's largest heavy
Speaker 4: lift crane. Westinghouse did just to be able to lift
Speaker 4: the first one. They worked with an American company to
Speaker 4: design to custom design this giant fixed base ring crane
Speaker 4: that requires other cranes to build it. Then you have
Speaker 4: this giant, giant crane that's in place and it swings around.
Speaker 4: It usually works for two different units to build two
Speaker 4: reactors at the same site. Interestingly, they weren't able to
Speaker 4: use this giant giant crane in China because of a
Speaker 4: design miscommunication. The first AP one thousands that Westinghouse tried
Speaker 4: to build in China, they didn't leave space on the
Speaker 4: site to put the giant crane, so in the end
Speaker 4: they had to use a very very large roller crane instead,
Speaker 4: which just about did the job, but it forced them
Speaker 4: to change the way they built it. China has learned
Speaker 4: from that though. So the newest you know, QUA long
Speaker 4: one reactors that China builds, they use a giant ring crane.
Speaker 4: I believe they use a zoom lion. It's a Chinese
Speaker 4: brand has designed one of these, built one of these
Speaker 4: massive ultra heavy lift cranes as well, and so now
Speaker 4: that's you know, they're reaping those benefits.
Speaker 3: I have a slightly random question, which is building nuclear reactors.
Speaker 3: How customized do the components that go into these actually
Speaker 3: have to be? Like how much does the design actually
Speaker 3: vary site to site?
Speaker 4: Well, if they are the same series of reactors, right,
Speaker 4: you could say the AP one thousand, right, that's a
Speaker 4: base unit. Now the ones that are built in vocal
Speaker 4: and the ones that were being built at Summer in
Speaker 4: South Carolina before that was canceled. Those were probably a
Speaker 4: little bit different, right, but you know, largely part of
Speaker 4: the same series. The ones that were built in China
Speaker 4: were built on that same platform, but they would have
Speaker 4: been modified a little bit for the Chinese context. They
Speaker 4: called them Chinese AP one thousands CAP one thousands, but
Speaker 4: you could say they're substantially the same reactor with with
Speaker 4: small modifications. When we start talking about different series, though,
Speaker 4: if we say, like the French design versus the US
Speaker 4: design versus what's being sold now in Korea or something
Speaker 4: like that, you'll see more similarities to their predecessors that
Speaker 4: they came up through different generations of technology. So like Korea,
Speaker 4: you'd see similarities to the old ge Hatachi reactors because
Speaker 4: that's where they got their technology originally. Then you'd see
Speaker 4: to say a modern EIGHTP one thousand. These are different
Speaker 4: tech trees from different competitors.
Speaker 2: So if I'm a guy on Twitter listening to this,
Speaker 2: and I am a guy on Twitter, except I'm talking
Speaker 2: in this, but I'm just a guy on Twitter and
Speaker 2: I'm hearing you talk about, okay, they get preferential lending
Speaker 2: from the state owned bank. The company is state owned.
Speaker 2: Probably the crane company is state owned. There's probably a
Speaker 2: few other state owned businesses, and I think, yeah, okay,
Speaker 2: you know, they're really good at building reactors fast. But
Speaker 2: there must be some sort of accumulated debts and inefficiencies
Speaker 2: that come with all of these all of these entities
Speaker 2: that have something other than a profit motive. And you know,
Speaker 2: probably you know, I don't know that my intuition or
Speaker 2: my response to you, or my my dunk on you
Speaker 2: is that there's going to be all these accumulated losses
Speaker 2: that ripple through the systems on account of the fact
Speaker 2: that it's SOOE working with see after SOE. Do we
Speaker 2: have any sense of how economic these projects actually are
Speaker 2: Because if these were private companies, you say, oh, they're
Speaker 2: either making money, or if these were sort of strictly
Speaker 2: for profit listed companies, you say, well, they're making money,
Speaker 2: they're not making money. Whatever. How do we think about
Speaker 2: the actual economics of whether this is good investment? Because
Speaker 2: it's cool, Yeah, you know, China's building dozens of reactors,
Speaker 2: How do we know these are good economic investments?
Speaker 4: Well, unless I can crack open you know, China National
Speaker 4: Nuclear Corporations books like, I can't tell you for sure
Speaker 4: these are good investments. Right, But when they build them
Speaker 4: at that pace, when you look at it from the
Speaker 4: outside and you say, all the conditions are in place
Speaker 4: to have surely built this according to the budget set
Speaker 4: for yourself. Right, you declared that you would build it
Speaker 4: with a certain budget and a certain time. You talk
Speaker 4: about the budget, right, So you're looking at you know,
Speaker 4: your construction period of five years, your pre construction and
Speaker 4: your commissioning. You add another five years or so, right.
Speaker 4: But then once they build it, they're saying, you know,
Speaker 4: we can build a single gigawatt unit reactor for five
Speaker 4: billion dollars four and a half billion, five billion. You
Speaker 4: look at numbers out of the US and they're saying,
Speaker 4: we're going to build what Vogel cost was two units
Speaker 4: for twenty eight billion dollars or something like that. You
Speaker 4: do a little bit of Napkin math and you say
Speaker 4: that reactor can't possibly make back how much money it
Speaker 4: costs to build and it's operating lifetime, or maybe it
Speaker 4: will just about get there after forty years. And that's
Speaker 4: assuming that this plant operates in the spot markets really
Speaker 4: really well and sells power so efficiently and never gets
Speaker 4: curtailed and never has issues like that. Meanwhile, your napkin
Speaker 4: math in China is saying, well, they're going to sell
Speaker 4: power at this rate for the next forty, maybe sixty years.
Speaker 4: Maybe they'll do double life extension, maybe eight eighty years.
Speaker 4: And you know, so many kiloot hours of power times
Speaker 4: so much per kilo a lot hour. Yeah, it looks
Speaker 4: like these things should be reasonably profitable. And keep in
Speaker 4: mind the profit motive of Chinese soees is different, right,
Speaker 4: They're expected to try to be profitable so they have
Speaker 4: cash flow to do things and you know, be functional.
Speaker 4: But if they have to take a hit sometimes they will.
Speaker 4: They can be the lubricant in the system that causes
Speaker 4: the inefficiencies to be okay. Because you've got you know,
Speaker 4: a major SOE that was okay, losing half a billion
Speaker 4: dollars last year. They'll make it back later. It's okay.
Speaker 4: The system didn't fall apart. They were the lubricant.
Speaker 3: So one way we could potentially judge the success of
Speaker 3: Chinese nuclear reactors is you could look at whether or
Speaker 3: not they are significantly changing the energy mix. And there
Speaker 3: was a story out this week saying that China's domestic
Speaker 3: coal production had reached an all time high and granted
Speaker 3: that's production that's not necessarily coal use, but I don't know,
Speaker 3: it doesn't seem like there's been a big impact just yet.
Speaker 3: Why is that?
Speaker 4: And yeah, and that's right, I saw that yesterday too.
Speaker 4: I'm bummed about that because I'm on record saying back
Speaker 4: in December twenty twenty three that I thought twenty twenty
Speaker 4: four would be the peak year, and I thought structurally
Speaker 4: we were in place to be able to peak coal
Speaker 4: consumption in twenty twenty four, and I think we're going
Speaker 4: to end up up one one point five percent year
Speaker 4: on year something like that, which for China is a
Speaker 4: huge amount of coal because they consume so much coal.
Speaker 4: But it's really close, which of course means if we're
Speaker 4: up year on year and last year was the highest
Speaker 4: year ever, than this year is the highest test year ever.
Speaker 4: And so what are we looking at though? We're looking
Speaker 4: at a power sector that is still growing consumption every
Speaker 4: year by seven percent year on year, six or seven
Speaker 4: percent year on year, compared to the US, where a
Speaker 4: good year is maybe like one percent or half a
Speaker 4: percent year on year, and you talk about data center
Speaker 4: demand growth is going to maybe rise that and everybody's
Speaker 4: freaking out, how are we going to meet this new
Speaker 4: consumption need. China's been growing like that seven percent eight
Speaker 4: percent in the past. It was even higher for decades now.
Speaker 4: So it to be the peak coal consumption, we have
Speaker 4: to get to a single year where all of the
Speaker 4: incremental consumption growth is met by incremental generation from clean assets,
Speaker 4: right from wind and water and solar and nuclear. If
Speaker 4: we can't manage to do that in one year where
Speaker 4: all the incremental growth is covered by new incremental clean generation,
Speaker 4: thermal generation has to go up. And so that's still
Speaker 4: where we're at. We're real close. If it only grew
Speaker 4: by one point five percent this year, that means that
Speaker 4: seven percent of China's entire consumption mix was almost totally
Speaker 4: covered by growth year on year of wind and water
Speaker 4: and solar and nuclear. But it wasn't quite there. And
Speaker 4: so that's where we stand at twenty twenty four. I'm
Speaker 4: going to be made a liar of that statement I
Speaker 4: made at the end of last year where I thought
Speaker 4: coal consumption would peak this year.
Speaker 2: Since you mentioned it, Data centers is obviously a huge
Speaker 2: part of the story of the return of load growth
Speaker 2: in the US. I mean, there's obviously just the general
Speaker 2: modernization and country getting wealthier. But tell us about the
Speaker 2: data center's story in China as you see it and
Speaker 2: it's impact on the grid.
Speaker 4: Yeah, it's of course going to be a other growth driver.
Speaker 4: The major difference here is that when China says, oh,
Speaker 4: we've got data centers coming in, so instead of six
Speaker 4: point five percent growth, it's going to be seven point
Speaker 4: five percent growth. Right, It's just what's a percentage point
Speaker 4: among friends? Right, Whereas the United States going from half
Speaker 4: a percentage point to one point five or two percent
Speaker 4: is very different from how we've had to grow in
Speaker 4: the past. So China's i think approaching this with much
Speaker 4: more sanguinity, maybe that they're just saying, yeah, it's going
Speaker 4: to be a driver of growth. Let's put them in
Speaker 4: some of our parts of the country that have low
Speaker 4: load and great renewable resources. Or we're gonna put them
Speaker 4: in Inner Mongolia is what we're going to put them. We're
Speaker 4: going to put growth demand centers in inner Mongolia. They
Speaker 4: don't need to be close to the.
Speaker 2: Is inner Mongolia.
Speaker 4: Yeah, it's it's sparsely populated, it's got a lot of
Speaker 4: great energy resources. The wind blows and the sunshines, all
Speaker 4: day long and there's no load out there, so it
Speaker 4: wouldn't have made so much sense maybe to cite you know,
Speaker 4: your heavy energy intensive industrial manufacturing so far from the
Speaker 4: demand center, so far from the coasts where you could
Speaker 4: get it to logistics. Oh, they put some stuff out there,
Speaker 4: but it wasn't so intuitive to put energy intensive industry
Speaker 4: out there. But data centers, Oh, that's great, right. They
Speaker 4: don't need to be close to markets per se, you
Speaker 4: just need to get be them close to the affordable energy.
Speaker 4: So it's looking like inn Moongolia or places like that
Speaker 4: will be a great match for China's data center growth.
Speaker 3: So one of the things that's been happening in the
Speaker 3: US speaking of data centers is a lot of the
Speaker 3: big tech companies have been signing off take agreements with
Speaker 3: energy producers and they've been pushing them towards more renewable energy.
Speaker 3: So they say, we want clean energy to power these things,
Speaker 3: and you make it for us and we'll take it.
Speaker 3: Do you see a similar dynamic taking place in China
Speaker 3: or do people not care as much about the ultimate
Speaker 3: cleanliness of their energy for data centers.
Speaker 4: Yeah, that's a major driver of how the power sector
Speaker 4: offers power. Right, your customers demand a certain type of power,
Speaker 4: you should be able to meet their needs. Right now,
Speaker 4: in China, you'd split, or in anywhere anywhere in the world,
Speaker 4: not just in China, you'd split green power consumption on
Speaker 4: the end user end into voluntary and mandatory. So mandatory
Speaker 4: says the government says you have to consume a certain
Speaker 4: amount of electricity that is green. We call it a
Speaker 4: renewable portfolio standard or an RPS. Right there's RPS and
Speaker 4: US states, not all of them, but some of them,
Speaker 4: and there's RPS in China. So from that perspective, you
Speaker 4: could say the government mandates that you consume a certain
Speaker 4: amount of renewable energy to meet the quota. Now. Right now,
Speaker 4: that applies to utilities in China, but it doesn't yet
Speaker 4: apply to end users. Your aluminum smelter doesn't have that
Speaker 4: man yet. But that's the next stage of RPS that's
Speaker 4: being added right now. Data centers I think need to
Speaker 4: be it's quite high. I think it's eighty percent renewable.
Speaker 4: To build a new data center in China, you're going
Speaker 4: to need to have aluminum and steel and all these
Speaker 4: heavy energy intensive industries need to consume renewable, so that's
Speaker 4: your mandatory consumption, that's RPS driven, and then you've got
Speaker 4: your voluntary consumption. So voluntary consumption, you know, corporate social
Speaker 4: responsibility initiatives ESG companies say we want to go green.
Speaker 4: We want to put it in our CSR report that
Speaker 4: we consumed x amount of renewables last year. We did
Speaker 4: this on a voluntary basis. We joined ARE one hundred,
Speaker 4: we joined the Science Based Targets initiative, and we want
Speaker 4: to claim that we are green. Yet that's your consumer
Speaker 4: tech brands, that's your luxury fashion and increasing. A lot
Speaker 4: of European brands are very aggressive on their renewable energy consumption,
Speaker 4: including in China. So if you're producing in China and
Speaker 4: selling to the world, you want to be able to
Speaker 4: say our production in China was also green. So that's
Speaker 4: voluntary consumption of green power. But you demand your power
Speaker 4: retailer to provide you with green electricity and they'll give
Speaker 4: you a quote for green electricity.
Speaker 2: We started on the nuclear side, we talked coal, but
Speaker 2: then we're all, well, you know, there's all these charts
Speaker 2: that are you know, great about all this solar being interstalled?
Speaker 2: Is the economics of that roughly the same in the
Speaker 2: sense that it's probably an sooe getting money from an
Speaker 2: so E bank, and talk to us about who's funding
Speaker 2: that and where does it make sense, like why in
Speaker 2: some places is solar going to be a solar wind
Speaker 2: part of the answer versus say nuclear.
Speaker 4: Right, So when it comes to wind and solar, these
Speaker 4: are being built differently from nuclear, right, they're not nearly
Speaker 4: as capital intensive. Also, they can be smaller, they can
Speaker 4: be more distributed. And so when you look at Chinese
Speaker 4: wind and solar, of course you still see sooees playing
Speaker 4: a big role, but there are as well IPPs independent
Speaker 4: power producers or just non soees right, as well as
Speaker 4: foreign players. So you as a you know, a foreign
Speaker 4: investor who you know like black Rock, can come into
Speaker 4: China and build a power plant if they want to,
Speaker 4: a wind or a solar farm, no problem. And so
Speaker 4: anyone can participate in that space if they do their
Speaker 4: financial analysis and they see the way to attractive project economics.
Speaker 4: So for Chinese builders, they borrow from Chinese banks, as
Speaker 4: will Chinese independent borrowers. Then international players they might borrow
Speaker 4: from international banks. They might try to borrow from Chinese banks.
Speaker 4: They can do that as well. They will get you know,
Speaker 4: market competitive rates. This is a different kind of building
Speaker 4: compared to nuclear, where it's instead of it's like a
Speaker 4: national strategic priority. To build a rooftop solar facility, now
Speaker 4: that's much more of a commercial market operation. However, there
Speaker 4: are some projects in China that are national strategic priority.
Speaker 4: We talk about those huge desert bases, you know, hundreds
Speaker 4: of megawats, gigawats, hundreds of gigawats in the middle of
Speaker 4: the Gobi desert, coal plants plus a wind farm, plus
Speaker 4: a solar farm, plus a huge battery array, all financed
Speaker 4: by a giant Chinese built by a Chinese soe. That's
Speaker 4: the kind of stuff that that kind of looks more
Speaker 4: like a nuclear power plant in the way that they
Speaker 4: finance and process that. But you know, rooftop solar facility
Speaker 4: in eastern China, now that's very much just a commercial play.
Speaker 4: If it makes money, if it makes sense, they'll build it.
Speaker 3: So when we talk about China's energy landscape or its
Speaker 3: energy mix, I mean a lot of what we're talking
Speaker 3: about we're pulling in numbers from the Chinese government, right
Speaker 3: like domestic production numbers, domestic usage numbers, and whenever you
Speaker 3: do that, there's always a certain element of uncertainty or
Speaker 3: a question mark over them. And there are some people
Speaker 3: who even if you were to say that China's coal
Speaker 3: production was finally falling, which it isn't, as you know,
Speaker 3: people wouldn't necessarily believe it. They'd be like, oh, well,
Speaker 3: China wants.
Speaker 4: You to think that.
Speaker 3: So I guess my question is like, how much should
Speaker 3: we believe some of these stats?
Speaker 4: Yeah, and this is going to be always very subjective
Speaker 4: about how much you want to believe or how much
Speaker 4: you think is worthwhile believing. My take that I usually
Speaker 4: go to is like, look at the top levels. You've
Speaker 4: got your National Bureau of Statistics, You've got these you know,
Speaker 4: national level entities, who's their job mandate is to report
Speaker 4: statistics as faithfully and as honestly as they can. All right, fine,
Speaker 4: you know what, that's their job mandate. No latitude to
Speaker 4: say I think they're doing their job dishonestly or something
Speaker 4: like that. But I do believe there are many kind
Speaker 4: of perverse incentives throughout the structure of the reporting economy
Speaker 4: in China that would create opportunity for misreporting information. When
Speaker 4: you tie you know, the county governor's promotion or lack thereof,
Speaker 4: to his ability to grow GDP in that province or
Speaker 4: in that county. You're creating the incentive for him to
Speaker 4: cook the data when you're creating economic recovery. And you
Speaker 4: announced to and this happened. This is a real story
Speaker 4: when you announce to a certain city in twenty twenty
Speaker 4: two that you're going to be evaluating how quickly they've
Speaker 4: recovered from COVID conditions by seeing how quickly their factories
Speaker 4: get back up to regular production. And you know that
Speaker 4: they're measuring that by seeing how much electricity they consume.
Speaker 4: All all of a sudden, you have.
Speaker 3: A sent everyone starts plugging stuff in.
Speaker 4: Right, So if you can say that people are trying
Speaker 4: to do their jobs honestly, and then you also have
Speaker 4: people that have been given perverse incentives to to misreport
Speaker 4: did I think that's where a lot of the uncertainty.
Speaker 2: I mean, this is the core problem of Central Plan.
Speaker 2: I mean, this is it in a nutshell. And obviously
Speaker 2: the most egregious examples of this were, you know, during
Speaker 2: the Great Leap Forward and all of the ways that
Speaker 2: either they you know, the steel production that was melting
Speaker 2: down literally anything of steel and destroying the economy in
Speaker 2: twenty twenty four, What are some of the techniques used
Speaker 2: to avoid sort of egregious jerking of the stats so that, yeah,
Speaker 2: someone's promotion who is tied to electricity consumption can't be
Speaker 2: sort of egregiously abused like that.
Speaker 4: Yeah, well, I mean famously or perhaps infamously. So I
Speaker 4: think it ended up it came out of like a
Speaker 4: WikiLeaks something that that the former premier Leika Chung said
Speaker 4: he didn't look at GDP data in certain prices, and
Speaker 4: now that's on the terminal, Yeah, the le Ka Chug index,
Speaker 4: and he said I prefer to look at I think
Speaker 4: it was a rail cargo and electricity consumption and or
Speaker 4: the third item two right, He said that these items,
Speaker 4: you know, the people in charge of reporting them, there's
Speaker 4: you know, My assumption is that his logic was there's
Speaker 4: less incentives to misreport these, so that these are the
Speaker 4: ones I want to look at, and you can maybe
Speaker 4: come up with your own version of the modern day
Speaker 4: Leka Chang index. I think electricity consumption is still fine,
Speaker 4: but maybe there's some other numbers that you say, look,
Speaker 4: this is all very centralized reporting. The reason I like
Speaker 4: electricity because it's all state grid, right, those numbers almost
Speaker 4: all come from state grid, and state grid is just
Speaker 4: a single unified entity. You're not gathering data points from
Speaker 4: many different companies. Maybe other stuff like we talk about
Speaker 4: cargo right again, China railways. Yeah, you have one centralized
Speaker 4: company that would be able to report that information. So
Speaker 4: if you want to modern you know, fashion your modern
Speaker 4: Leka Chang index, maybe try those types of indices.
Speaker 2: So one other element obviously of the Chinese energy to man.
Speaker 2: We've talked a lot about the grid obviously and the
Speaker 2: power of the grid. Then there is the whole world
Speaker 2: of automobiles, which up until very recently was this totally
Speaker 2: separate part of the energy system, but now it's around
Speaker 2: the world, but in particular China, and we talk about
Speaker 2: Chinese EV's all the time being plugged into the grid.
Speaker 2: How much do we see the electrification of the Chinese
Speaker 2: automobile fleet, Like A, how electrified is it right now?
Speaker 2: And B isn't moving the dial on oil consumption because
Speaker 2: this is a pretty big question in the West, right,
Speaker 2: like at some point will EV's become big enough where
Speaker 2: meaningfully starts to reduce our oil demand, and even in
Speaker 2: countries like Norway, I think like it's still barely moving
Speaker 2: the dial despite mass of electrification. What are we seeing
Speaker 2: in China right now on that.
Speaker 4: Front, Yeah, I mean in the major cities you say,
Speaker 4: shen Jen, Shanghai, Beijing, in places like this, the EV
Speaker 4: penetration rate is noticeably high, and you'll see that they're
Speaker 4: easily identifiable. They have green license plates instead of the
Speaker 4: regular blue license plates, so you can just kind of
Speaker 4: look at them on the street. It's very expensive to
Speaker 4: get a license plate in Shanghai. Just the license plate
Speaker 4: itself is expensive, but EV's for a long time were free,
Speaker 4: like a the license plate was free, so that was
Speaker 4: a great perk for them to pursue those. And yeah, there,
Speaker 4: I think it was. New vehicle sales in Shanghai, for example,
Speaker 4: was fifty percent electric vehicles in the last reporting session.
Speaker 4: And it's really noticeable when you stand on a street
Speaker 4: corner in Shanghai, and I guess it's noticeable by the
Speaker 4: lack of the noise.
Speaker 2: I heard that everyone goes to Shanghai and says it's
Speaker 2: really quiet.
Speaker 4: That's you know. Look, I'm back in New York right
Speaker 4: now for the first time in a year and I
Speaker 4: stand on a street corner. It's so loud, and I
Speaker 4: hadn't really noted the lack of the noise because I'm
Speaker 4: just used to it now and it's it's I hear
Speaker 4: the roar of petroleum based engines all around me. Yeah.
Speaker 4: So EV's in the large cities, penetration rates noticeably high.
Speaker 4: In the smaller cities still fairly high. When you go
Speaker 4: out to the more rural areas, it's going to drop off.
Speaker 4: Of course, there's more skepticism about the completeness of the
Speaker 4: charging network, just maybe some more uncertainty about the technology itself.
Speaker 4: You'll hear people in the countryside say all batteries are dangerous,
Speaker 4: heard that I saw a video once of an EV
Speaker 4: on fire, things like that. Similar you know comments in
Speaker 4: the United States too. But the long term, the EV
Speaker 4: penetration rate will will only continue to rise.
Speaker 2: It's national oil consumption, I believe, so I think.
Speaker 4: I saw now. I'm not an oil specialist, but I
Speaker 4: think I've seen and I've read recently that that Chinese
Speaker 4: oil imports should have peaked right, that they should have
Speaker 4: be ready to draw down. If you know, if I'm
Speaker 4: lying here, May God smite me down. But I think
Speaker 4: that that was the case, and that we see a
Speaker 4: structural decline in petroleum because of the adoption of evs.
Speaker 3: So, speaking of EV's, there is a lot of Chinese
Speaker 3: made clean tech that is here in the US, including
Speaker 3: solar panels as well. And this has been one of
Speaker 3: the frictions of the past few years, which is, you know,
Speaker 3: the US says it wants cleaner energy, and Chinese solar
Speaker 3: panels and evs are probably the cheapest forms of that
Speaker 3: technology around. And yes, there's a lot of I guess,
Speaker 3: reluctance to import tons of those into the US, and
Speaker 3: certainly with Trump coming in, it seems like tariffs are
Speaker 3: on their way. How do you see all of that
Speaker 3: shaking out into the new year.
Speaker 4: Yeah. Look, in the United States, you're gonna decarbonize or
Speaker 4: you're gonna buy green tech at exactly the rate that
Speaker 4: is economic. Yeah, And so if you have access to
Speaker 4: very affordable green tech, you'll do it at a faster rate.
Speaker 4: If you have access to more expensive green tech, you'll
Speaker 4: do it more slowly. And so I have to assume
Speaker 4: that if those tariffs go in place, unless alternative producers
Speaker 4: are able to offer similar quality goods at similar prices,
Speaker 4: then you're going to slow down your green transition. It's
Speaker 4: maybe a simple but obvious kind of answer there. On
Speaker 4: the Chinese side, of course, there will be some pain
Speaker 4: for exporters, anyone exposed to the United States market. Some
Speaker 4: solar panels, maybe some VS, some batteries I think are
Speaker 4: pretty significant if those are target it. Yeah, you'd expect
Speaker 4: to see some pain on the Chinese side there. It's
Speaker 4: already an extremely extremely competitive environment in China. Most of
Speaker 4: these producers are in very thin profit margins, hanging on
Speaker 4: by a threat. It's good for consumers, it's not good
Speaker 4: for if you're holding those stocks. So this would only
Speaker 4: just be another bit of pain for them. Denial of
Speaker 4: a potential revenue channel.
Speaker 2: Since you mentioned EV charging stations, we have this sort
Speaker 2: of weird patchwork here, and there's a lot of I'm
Speaker 2: a little ambiguity about the US government under Biden has
Speaker 2: remarked a lot of money to build EV charging stations.
Speaker 2: It's a little unclear how much actually got built Publicly.
Speaker 2: There seems to be a view that it hasn't been
Speaker 2: particularly successful on the public side. What is the structure
Speaker 2: of the buildout for charging stations in China. Is it
Speaker 2: publicly owned? Is it what's the deal?
Speaker 4: It's all of the above, I guess. So you've got
Speaker 4: you know, China State Grid or China Southern Grid. But
Speaker 4: grid companies they build charging infrastructure. Some of the ev
Speaker 4: acres themselves build their own charging infrastructure, maybe like a
Speaker 4: Tesla supercharger, right. Some of them also build their own
Speaker 4: battery swap stations. I think Neo is quite famous for
Speaker 4: having battery swap stations. You can go pretty much any
Speaker 4: highway rest stop in China and you can find a
Speaker 4: Neo battery swap station.
Speaker 2: So then there's no time you just swap.
Speaker 4: It in and out. Yeah, I'm there's a line to
Speaker 4: wait for the battery swap station if another Neo pulls
Speaker 4: ahead of you. But besides that, I mean, I think
Speaker 4: the major thrust, at least the ones that I've seen
Speaker 4: recently in the Southern Grid region have been by the
Speaker 4: grid company itself. Right, So, China Southern Grid. I remember
Speaker 4: reading last year they said, ah, you know, we're planning
Speaker 4: to build one hundred thousand chargers this year. We're you know,
Speaker 4: three months in, we're seventeen thousand chargers in so far,
Speaker 4: we're on track to finish our goal by the end
Speaker 4: of the year. And you do see it when you
Speaker 4: go to regions that have been targeted for those buildouts. Right.
Speaker 4: You can go to fairly rural areas in say Gwanboon
Speaker 4: Province down in the south and you'll find EV chargers
Speaker 4: installed there by China Southern Grid in a village where
Speaker 4: I don't think there are necessarily any evs, but hey,
Speaker 4: they got the infrastructure there because they said we're going
Speaker 4: to build one hundred K, and so they built a
Speaker 4: hundred K.
Speaker 2: David Fisherman, so great to chat with you again, especially
Speaker 2: in person, and I'm so glad you have other things
Speaker 2: to worry about besides figuring out how to get food
Speaker 2: in your apartment. Really appreciate you coming back on odline.
Speaker 4: Thanks a lot for having you guys.
Speaker 2: That was really helpful, Tracy, that I learned all the
Speaker 2: things more or less that I wanted to know about.
Speaker 2: How they're building so much a nuclear.
Speaker 4: Yeah, what's that?
Speaker 2: React?
Speaker 3: Well, it does. It leaves me wondering how like replicable
Speaker 3: it is in other countries, right, because obviously in places
Speaker 3: like the US, we don't really have subsidized finance on
Speaker 3: the scale that China does. We don't have a lot
Speaker 3: of cheap and skilled labor at the same time, and
Speaker 3: we don't have some of the let's put it this way,
Speaker 3: like regulatory hastiness maybe in approving these sites and these things.
Speaker 3: I don't know, like how replicable do you think it is?
Speaker 2: No, this is the exact question, because you know there's
Speaker 2: some subsidy the loan Program's office exists, but we don't
Speaker 2: know the same gigantic state owned banks. Yeah, and then
Speaker 2: even if you solve the financing problem, and even if
Speaker 2: you solve the market off take problem, which is going
Speaker 2: to be very different, right because we have market grids
Speaker 2: in a lot of parts of the country and so
Speaker 2: it's hard to sort of make that forty year commitment
Speaker 2: that you will get this price. Then there's all the
Speaker 2: logistics like, oh, you needed this gigantic crane that's the
Speaker 2: biggest crane in the history of.
Speaker 3: Now you need a big crane to make the big
Speaker 3: crane you.
Speaker 2: Need to make. So this gets to I mean, this
Speaker 2: is a point that jigger Shaw makes all the time,
Speaker 2: but this idea that we're never going to really do
Speaker 2: this economically, And David just mentioned the sort of daunting
Speaker 2: economics of Vogel. We're never gonna do this economically unless
Speaker 2: we do it over and over and over and over again.
Speaker 2: And it feels like the components of what it would
Speaker 2: actually take to do it over and over and over
Speaker 2: again is this massive centralized commitment to doing lots of
Speaker 2: different parts. And you know, it sounds like the regulatory
Speaker 2: side or the permitting thing that seems about the same.
Speaker 2: And the fact that the public can complain about endangered
Speaker 2: fish and all that, that's sort of similar. So people
Speaker 2: complain about annoying local nimbi's. That doesn't really sound that
Speaker 2: much different. It sounds like everything else that's different.
Speaker 3: I suspect the nimbiism is slightly different too, But point taken,
Speaker 3: and I do wonder, like, how do you even go
Speaker 3: about beginning to redevelop that nuclear muscle memory in the States.
Speaker 3: It seems really really hard, Like, Okay, we can reactivate
Speaker 3: some nuclear reactors like we're planning to, but starting like
Speaker 3: new ones from scratch. It just seems like there's such
Speaker 3: a limited pool of people who are cape of doing
Speaker 3: that and then putting in place, As you rightly pointed out,
Speaker 3: all the off take agreements and the network and everything
Speaker 3: needed to kind of make those things financially viable. It
Speaker 3: seems hard.
Speaker 2: By the way, I'm glad you asked that question about
Speaker 2: coal consumption that because that was really helpful, because it's
Speaker 2: one thing to say, well, another record year for coal consumption.
Speaker 2: But I guess the way I think about it, at
Speaker 2: least in the short term, we don't know when that's.
Speaker 3: Not coal consumption, it's production, just to be.
Speaker 2: Coal production, but it's really going to be about like
Speaker 2: if coal is in fact as a part of the
Speaker 2: you know, if it's only growing one percent, but electricity
Speaker 2: demand is growing six to seven percent, that is a
Speaker 2: good sign, right, even if it's not bending the curve
Speaker 2: down yet.
Speaker 3: M hm. Anyway, it's funny I will always associate Beijing
Speaker 3: with lots and lots of burning coal in the winter.
Speaker 2: By the way, I had heard that about how apparently
Speaker 2: the big cities now are really quiet, which is pretty cool,
Speaker 2: and once self driving cars are everywhere, there will be
Speaker 2: no honking either, and so we can look forward to
Speaker 2: a future maybe one day we very peaceful, peaceful, quiet
Speaker 2: big cities.
Speaker 3: All right, something to hope for. Shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the Authoughts podcast. I'm
Speaker 3: Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 2: And I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest David Fishman, He's at Pretentious What. Follow
Speaker 2: our producers Carmen Rodriguez at Carman armand dash Ol Bennett
Speaker 2: at Dashbot and Kilbrooks at Kilbrooks. Thank you to our
Speaker 2: producer Moses Ondam from our odlots content. Go to Bloomberg
Speaker 2: dot com slash outlots, where we have transcripts, a blog,
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