WEBVTT - Splitting Atoms, Scaling AI: Big Tech’s Nuclear Gambit 0:00:00.280 --> 0:00:02.800 This is Tom Rowland's Reese and you're listening to Switched 0:00:02.840 --> 0:00:06.120 on the BNF podcast. Today we're discussing the revival of 0:00:06.200 --> 0:00:08.720 nuclear power in the United States, driven by the demand 0:00:08.800 --> 0:00:11.959 of hyperscaling tech giants led by the boom in AI. 0:00:12.080 --> 0:00:15.080 The rapid growth of energy hungry data centers has resulted 0:00:15.120 --> 0:00:18.200 in an ever increasing outlook for electricity demand, which the 0:00:18.280 --> 0:00:22.159 US Energy Information Administration forecasts at three percent growth for 0:00:22.200 --> 0:00:24.640 twenty twenty four alone. With the need for a secure 0:00:24.680 --> 0:00:27.800 twenty four hour energy supply, nuclear power fits the bill. 0:00:28.080 --> 0:00:30.840 The nuclear path isn't as straightforward as it would seem, however, 0:00:31.120 --> 0:00:34.320 Small modular reactors or SMRs are still in a development phase, 0:00:34.440 --> 0:00:37.400 Regulatory hurdles remain in place, and cost concerns coupled with 0:00:37.440 --> 0:00:40.919 project overruns have been a persistent problem. Regardless, the need 0:00:40.960 --> 0:00:43.520 to secure energy to power their ever expanding data center 0:00:43.520 --> 0:00:45.920 fleet has led to companies such as Amazon, Google, and 0:00:46.000 --> 0:00:49.000 Microsoft to announce a flurry of deals with nuclear energy companies. 0:00:49.320 --> 0:00:52.160 To discuss the details of this nuclear revival further, Today, 0:00:52.159 --> 0:00:55.600 I'm joined by BNFEED nuclear analyst Kris Kodomski to review 0:00:55.640 --> 0:01:00.560 findings from his recent report Hyperscaler's Energy Appetite boosts Nuclear Prospects. 0:01:00.920 --> 0:01:03.160 Bn F clients were able to access this and other 0:01:03.200 --> 0:01:06.040 related research at BNF go on the Bloomberg Terminal and 0:01:06.080 --> 0:01:08.520 at BF dot com. Now let's talk to Chris about 0:01:08.600 --> 0:01:22.160 data centers and nuclear energy. Chris, lovely to have you here. 0:01:22.160 --> 0:01:24.520 Thank you for joining us. It's great to be back. 0:01:24.959 --> 0:01:29.720 You have been covering the nuclear industry at BNF for 0:01:29.959 --> 0:01:32.600 a number of years. Were you covering it before BNF 0:01:32.640 --> 0:01:35.200 as well? You've been at the company longer than I have, so. 0:01:35.959 --> 0:01:38.680 Yes, I was. As a matter of fact, I was 0:01:39.120 --> 0:01:43.600 first intrigued by the nuclear industry by doing studies following 0:01:43.640 --> 0:01:46.640 the collapse of the former Soviet Union and understanding what 0:01:46.720 --> 0:01:50.440 market opportunities existed in the power sector in those countries 0:01:50.480 --> 0:01:56.000 that were affected, Poland, Slovakia, Czech Republic and in Hungary. 0:01:56.200 --> 0:02:00.440 And then I went into the yucka mountain repositor that 0:02:00.640 --> 0:02:03.920 was being built or had been built in Nevada, and 0:02:03.960 --> 0:02:06.560 we had spent six billion dollars to do that and 0:02:06.600 --> 0:02:09.320 we weren't going to use it. So I kind of intrigued, 0:02:09.360 --> 0:02:12.320 why would we spend six billion dollars being in nuclear 0:02:12.320 --> 0:02:15.320 repository and not use it. So that's what really got 0:02:15.320 --> 0:02:16.040 me intrigued. 0:02:16.160 --> 0:02:17.920 I mean, the reason I asked this question, you know, 0:02:17.919 --> 0:02:20.880 how long you've been covering nuclear is I am imagining 0:02:21.160 --> 0:02:25.040 that you have seen nuclear come in and out of 0:02:25.080 --> 0:02:28.959 fashion in the sort of both the public and government 0:02:29.280 --> 0:02:32.919 and private domain. You know, kind of being cool and uncool, 0:02:32.919 --> 0:02:34.720 and then maybe cool again and then sort of in 0:02:34.760 --> 0:02:38.240 some form uncool. In terms of the sort of that cycle, 0:02:38.600 --> 0:02:41.320 where do you see nuclear right now? You know, both 0:02:41.320 --> 0:02:43.720 in terms of how it's perceived and in terms of 0:02:43.760 --> 0:02:47.680 what the state of the actual global nuclear fleet is 0:02:47.800 --> 0:02:48.280 right now. 0:02:48.560 --> 0:02:50.960 First of all, we need to understand that the nuclear 0:02:51.000 --> 0:02:54.680 industry moves like molasses, and it's that quick moving. It 0:02:54.840 --> 0:02:58.560 just goes very very steadily forward or backwards. What has 0:02:58.639 --> 0:03:02.360 happened in the last twenty four months or so is 0:03:02.400 --> 0:03:05.840 that there is a tremendous interest in nuclear power for 0:03:05.919 --> 0:03:10.040 two reasons. The first reason is for trying to address 0:03:10.440 --> 0:03:14.000 unresolved issues with regards to climate change. It's a very 0:03:14.040 --> 0:03:17.800 strong and powerful technology, and I think the world is 0:03:17.800 --> 0:03:20.600 starting to recognize that it is something that we need 0:03:20.680 --> 0:03:24.720 as part of a portfolio of technologies to solve climate change. 0:03:24.760 --> 0:03:27.920 But what really pushed nuclear forward recently has been the 0:03:28.240 --> 0:03:32.560 Russian event in the Ukraine, when all of a sudden 0:03:32.800 --> 0:03:36.320 energy security has become a very very high priority for 0:03:36.480 --> 0:03:39.400 countries in Europe, in the United States, and realizing that 0:03:39.560 --> 0:03:44.040 nuclear does provide a tremendous sense of security and it's 0:03:44.280 --> 0:03:47.960 not intermittent, and it's a very very powerful technology that 0:03:48.160 --> 0:03:51.440 should be part of the equation for climate change and 0:03:51.520 --> 0:03:53.480 for national security. Got it. 0:03:53.520 --> 0:03:56.200 And then I suppose to that point about climate that 0:03:56.520 --> 0:04:00.480 manifested itself twenty eight, which was in Dubai with this 0:04:00.640 --> 0:04:03.360 tripling nuclear pledge, which I mean, I know you've written about, 0:04:03.400 --> 0:04:05.760 and I think that your view is that it's going 0:04:05.800 --> 0:04:08.720 to be very difficult to achieve, if that's a polite 0:04:08.760 --> 0:04:11.360 way of putting it. But at least it shows like 0:04:11.400 --> 0:04:14.960 everything you're saying is sort of again this technology that 0:04:15.040 --> 0:04:17.440 maybe at some point, you know, if we go back 0:04:17.480 --> 0:04:21.320 to Fukushima and what happened there with the earthquake and 0:04:21.360 --> 0:04:23.560 then the tsunami, and then you know what we saw 0:04:23.600 --> 0:04:25.520 then the reaction in Germany that was very much a 0:04:25.560 --> 0:04:28.200 technology that was out of fashion to an extent one 0:04:28.240 --> 0:04:31.240 could even describe as irrationally so and it seems like 0:04:31.360 --> 0:04:33.960 now that you know from everything you've described, nuclear is 0:04:34.080 --> 0:04:36.119 beginning to have a bit of a moment again because 0:04:36.160 --> 0:04:37.560 of again of global events. 0:04:38.000 --> 0:04:42.320 Nuclear is having a moment if you rely on politicians, statements, 0:04:43.200 --> 0:04:46.280 NGOs who are freaking out that we're not really resolving 0:04:46.400 --> 0:04:50.039 addressing net zero aspirations in climate change. But when you 0:04:50.160 --> 0:04:53.400 look into the nuts and bolts and you realize how 0:04:53.440 --> 0:04:56.919 difficult and challenging it is to build these nuclear power plants, 0:04:56.960 --> 0:05:00.320 at least in the West, now that it becomes a 0:05:00.400 --> 0:05:04.240 much harder and more difficult slog than there are in 0:05:04.279 --> 0:05:07.839 other places in the world. We've lost the ability in 0:05:07.880 --> 0:05:11.240 the West to build nuclear power plants on time and 0:05:11.279 --> 0:05:14.080 on budget. And that's manifested by the fact that the 0:05:14.200 --> 0:05:17.479 Chinese can build a nuclear power plant, a large one, 0:05:17.600 --> 0:05:20.080 for maybe one fifth of the court that we can 0:05:20.120 --> 0:05:22.960 do it in the United States. So it's understandable that 0:05:23.000 --> 0:05:26.360 the Chinese are building twenty nine nuclear power plants right 0:05:26.400 --> 0:05:29.600 now and the US is not building any simply because 0:05:29.800 --> 0:05:33.400 every utility in the country is freaking out by the 0:05:33.760 --> 0:05:38.240 realization that the next nuclear reactor may be slightly cheaper 0:05:38.480 --> 0:05:40.320 or maybe not got it. 0:05:40.320 --> 0:05:43.520 It's sort of like even if maybe nuclear is becoming 0:05:43.560 --> 0:05:47.200 a little bit more popular again, it doesn't magically make 0:05:47.279 --> 0:05:50.320 it easier to do or solve the fact that, you know, 0:05:50.520 --> 0:05:53.560 in the US, at least, the skilled workforce required to 0:05:53.560 --> 0:05:55.000 build these reactors isn't there. 0:05:55.600 --> 0:05:59.800 We assembled a skilled workforce for building the Vogel three, 0:06:00.080 --> 0:06:03.080 for the last two reactors that were completed, that was 0:06:03.120 --> 0:06:07.720 completed several months ago. Finally, what has happened to that workforce? 0:06:07.839 --> 0:06:11.120 There is no second large nuclear project for them to 0:06:11.200 --> 0:06:15.200 go to. In China, you'll have six reactors built on 0:06:15.240 --> 0:06:18.200 the same site, and the workforce will go from one 0:06:18.279 --> 0:06:20.440 to the next, to next to next. Where are all 0:06:20.480 --> 0:06:23.560 those workers that built the Vogel three and four. There's 0:06:23.600 --> 0:06:27.679 no new nuclear project being proposed or actually constructed now, 0:06:27.720 --> 0:06:30.680 so they're being dispersed and pursuing other opportunities. 0:06:31.000 --> 0:06:32.880 Seems like a missed opportunity because a lot of maybe 0:06:32.920 --> 0:06:35.920 you could characterize the cost overruns with that project, is 0:06:36.000 --> 0:06:40.280 the cost of learning again, training up those workers, you know, 0:06:40.360 --> 0:06:42.960 developing those skills in the country. And then the US 0:06:43.040 --> 0:06:44.840 is not taking advantage of that. Right. 0:06:44.920 --> 0:06:49.680 The US government is suggesting that the next ap one thousand, 0:06:49.880 --> 0:06:52.839 the reactor or the next large reactor that theoretically would 0:06:52.880 --> 0:06:55.080 be built in this country will come in at a 0:06:55.120 --> 0:06:59.240 cost advantage of say thirty percent. I'm not exactly sure 0:06:59.279 --> 0:07:01.599 that will happen. I'd love to see it happen, but 0:07:01.960 --> 0:07:04.280 I'm questioning whether or not that can happen in an 0:07:04.360 --> 0:07:09.280 environment where we have persistent inflation and higher interest rates 0:07:09.360 --> 0:07:11.240 than we had over the last couple of years. 0:07:11.640 --> 0:07:14.000 So this is kind of, you know, tease up the 0:07:14.120 --> 0:07:16.640 sort of getting onto the main topic today. So, as 0:07:16.680 --> 0:07:19.440 I mentioned, we have maybe a more favorable view developing 0:07:19.440 --> 0:07:22.520 globally for nuclear and in the US, but maybe an 0:07:22.560 --> 0:07:25.800 industry that is not in a state to step up 0:07:25.880 --> 0:07:28.239 to where it needs to be to kind of ride 0:07:28.280 --> 0:07:31.880 that wave. Mixing my metaphors. And then suddenly there's this 0:07:31.920 --> 0:07:35.320 new factor you mentioned climate, you mentioned Russia and energy security. 0:07:35.360 --> 0:07:37.760 And then there's this third thing that everyone is talking about, 0:07:37.760 --> 0:07:41.560 which is demand growth for electricity coming from data centers. 0:07:41.960 --> 0:07:44.000 So do you think that's going to shake things up 0:07:44.200 --> 0:07:44.760 in any way? 0:07:45.080 --> 0:07:47.960 I certainly think it will, and we're seeing evidence of 0:07:48.000 --> 0:07:54.040 that where the large Hyperscalers, the Amazons, the Googles, the Microsofts, 0:07:54.080 --> 0:07:58.680 the meta are all negotiating contracts with advanced reactor companies 0:07:58.760 --> 0:08:01.600 and also suggest that we bring back some of the 0:08:01.640 --> 0:08:06.320 older reactors that have been prematurely retired because of inexpensive 0:08:06.440 --> 0:08:10.520 natural gas or intermittent renewables. And these are very valuable 0:08:10.680 --> 0:08:13.800 assets that I will continue to serve for for several 0:08:13.840 --> 0:08:16.880 more years. So it is a combination of we need 0:08:16.960 --> 0:08:20.760 reliable twenty four to seven electricity that is carbon free, 0:08:20.920 --> 0:08:22.800 and nuclear power is a great source of that. 0:08:23.080 --> 0:08:26.600 And it's interesting because you mentioned both the advanced reactors 0:08:26.800 --> 0:08:28.960 and then this idea of bringing back some of the 0:08:28.960 --> 0:08:31.000 older reactors. So let's focus for a second on the 0:08:31.000 --> 0:08:35.640 advanced reactors. Why are they being spoken about? You know, 0:08:35.679 --> 0:08:38.440 why is there so much interest in those parsically because 0:08:38.720 --> 0:08:42.600 unlike the conventional reactors, they're not proven. So there's this 0:08:42.679 --> 0:08:45.160 new challenge and we're looking to a new solution rather 0:08:45.200 --> 0:08:46.400 than an existing solution. 0:08:46.800 --> 0:08:49.680 So one has to realize that there's five pathways to 0:08:49.760 --> 0:08:55.559 nuclear power. There are large reactors, small modulear reactors, advanced 0:08:55.559 --> 0:08:59.840 reactors now explain the difference, microreactors less than fifty magua, 0:09:00.200 --> 0:09:04.080 and finally fusion. Each one of these technologies have different 0:09:04.200 --> 0:09:09.320 risk profiles, cost uncertainty, and timelines to commercialization. So when 0:09:09.320 --> 0:09:12.280 you look at a large reactor, it took fifteen years 0:09:12.320 --> 0:09:17.120 from filing of the initial application license until electrons are 0:09:17.120 --> 0:09:21.040 flowing onto the grid. For many of these hyperscalers waiting 0:09:21.080 --> 0:09:24.520 for fifteen years, we've missed the opportunity. But will the 0:09:24.720 --> 0:09:28.160 SMRs or the advanced reactors cross the finish line sooner 0:09:28.200 --> 0:09:31.319 and be able to deliver electrons to the grid before that, 0:09:31.679 --> 0:09:35.240 And the vendor suggests yes, they will, they're looking at 0:09:35.320 --> 0:09:38.280 the end of this decade. I suggest that's probably more 0:09:38.400 --> 0:09:42.480 likely after twenty thirty, given the molasses movement historically of 0:09:42.520 --> 0:09:45.720 the nuclear power industry, so that we're looking at twenty thirty. 0:09:45.840 --> 0:09:48.120 But there are several other reasons why you'd like to 0:09:48.160 --> 0:09:53.000 look at a SOMR. There's a smaller emergency planning zone, 0:09:53.040 --> 0:09:56.520 so you don't have more area that needs to be 0:09:56.720 --> 0:10:01.520 excluded unpopulated around these nuclear power pl Allegedly, there's a 0:10:01.600 --> 0:10:04.520 quicker time to market, as we've talked about, there's lower 0:10:04.640 --> 0:10:08.559 upfront capital costs, so you're talking thirty four billion dollars 0:10:08.640 --> 0:10:11.600 for two large reactors. You can get a three hundred 0:10:11.600 --> 0:10:15.000 megawote reactor an unspecified cost, but it's going to be 0:10:15.120 --> 0:10:19.160 less than the costs of the large reactors hypothetically. And 0:10:19.200 --> 0:10:22.959 then there's also the ability to add capacity as you 0:10:23.080 --> 0:10:25.960 need it. As the data center demands grow, you can 0:10:26.000 --> 0:10:30.760 add incrementally to the power supply. And finally, you avoid 0:10:30.800 --> 0:10:34.160 the problem of single shaft risk if the reactor. If 0:10:34.200 --> 0:10:37.440 you lose a thousand megawatts of capacity, if something goes on, 0:10:37.679 --> 0:10:40.720 it's a problem. If you have three three hundred megawatt 0:10:40.800 --> 0:10:44.200 reactors operating, if you lose three hundred megawats, you may 0:10:44.200 --> 0:10:46.360 be able to find a work around that's not going 0:10:46.400 --> 0:10:47.679 to be so catastrophic. 0:10:48.200 --> 0:10:50.240 So there's various facts. I think the one that's really 0:10:50.240 --> 0:10:54.200 interesting is this kind of time to market that you mentioned. 0:10:54.240 --> 0:10:57.520 You know, because this demand growth in relations data sensors 0:10:57.679 --> 0:11:00.560 is so pressing. So are you saying that we know 0:11:01.120 --> 0:11:05.040 that conventional nuclear takes a long time. Even though there's 0:11:05.080 --> 0:11:07.680 all the issues we mentioned with the workforce in the US, 0:11:07.880 --> 0:11:10.400 it is still a known quantity to some extent. And 0:11:10.480 --> 0:11:13.440 what we know is that from a regulatory perspective, it's 0:11:13.480 --> 0:11:16.120 going to be working through molasses. And so some of 0:11:16.120 --> 0:11:19.160 these small modular reactors they're kind of what they're banking 0:11:19.200 --> 0:11:22.120 on is that that process is so slow. If they 0:11:22.160 --> 0:11:26.320 have a technology that does not need to have such 0:11:26.640 --> 0:11:31.560 tight regulatory oversight, they can maybe commercialize that technology and 0:11:31.679 --> 0:11:34.320 get it through the regulatory process in the same kind 0:11:34.320 --> 0:11:36.920 of time frame that it would take for conventional nuclear 0:11:36.960 --> 0:11:39.520 to just get through the regulatory process. Is that what 0:11:39.559 --> 0:11:41.400 their their role of the dice is. 0:11:41.720 --> 0:11:43.840 Well, the role of the dice is that we will 0:11:43.880 --> 0:11:46.720 go through the regulatory process and then we will be 0:11:46.840 --> 0:11:51.720 able to deliver and build these reactors in a faster timeframe. 0:11:51.760 --> 0:11:55.679 They're sorter timeframe than the larger reactors. And very, very importantly, 0:11:56.200 --> 0:11:58.599 we talk about the difference between the first of a 0:11:58.679 --> 0:12:01.720 kind cost and the nth of a kind cost. How 0:12:01.760 --> 0:12:05.560 fast can a reactor or vendor proceed down the learning curve. 0:12:05.720 --> 0:12:09.160 If you're making small reactors and you have a long 0:12:09.440 --> 0:12:14.200 pipeline of potential customers, you can invest in the manufacturing 0:12:14.280 --> 0:12:18.559 infrastructure with which to make these reactors, build these reactors 0:12:18.600 --> 0:12:21.840 more efficiently, and then get down the learning curve. Think 0:12:21.880 --> 0:12:25.600 what it's like to sort of manufacture reactors in something 0:12:25.679 --> 0:12:30.119 similar to a commercial Boeing jet manufacturing facility. 0:12:30.600 --> 0:12:33.640 And what's interesting there as well? I mean you mentioned, yeah, 0:12:33.720 --> 0:12:36.240 they're smaller so you can come down the cost curve 0:12:36.720 --> 0:12:38.800 faster to get to end of a kind. And the 0:12:38.880 --> 0:12:41.520 other thing that is essential to doing that is having 0:12:41.600 --> 0:12:44.520 a kind of a pipeline of customers. And if I 0:12:44.559 --> 0:12:47.360 think about wind and solar, the tech industry has been 0:12:47.400 --> 0:12:51.360 really essential in various different ways in developing the market 0:12:51.400 --> 0:12:54.559 in the US for those technologies. And so it's interesting 0:12:54.600 --> 0:12:56.520 then that you know, now we're talking about data centers 0:12:56.679 --> 0:12:59.120 creating this new demand, this new interest from the tech 0:12:59.120 --> 0:13:03.560 industry in new nuclear technologies. I would characterize that nuclear 0:13:03.600 --> 0:13:08.160 probably can't succeed without the interest of that particular sector. 0:13:08.520 --> 0:13:10.120 Maybe I'm wrong. I mean, you can push back on 0:13:10.160 --> 0:13:12.800 that if you don't agree. But to that point, which 0:13:12.840 --> 0:13:17.400 companies have we seen engaging with nuclear and in what 0:13:17.520 --> 0:13:18.840 particular technologies? 0:13:19.160 --> 0:13:24.800 So the four major hyperscalers are all very much involved. 0:13:24.960 --> 0:13:29.160 We have Amazon has invested in one of the advanced 0:13:29.200 --> 0:13:33.280 reactor companies and now it's ex Energy. They can participate 0:13:33.360 --> 0:13:36.640 in the Series C five hundred million dollar financing, and 0:13:36.679 --> 0:13:39.839 that was there. Google has committed to buy a certain 0:13:39.920 --> 0:13:45.680 amount of energy from several chiros multen salt reactors technologies 0:13:45.720 --> 0:13:51.199 that they're developing. And Microsoft has contracted to buy electricity 0:13:51.360 --> 0:13:54.520 from some of the large reactors that are being brought 0:13:54.600 --> 0:13:58.680 back to life, specifically the Three Mile Island in Pennsylvania. 0:13:58.720 --> 0:14:01.600 And just the other day Meta got into the act 0:14:01.760 --> 0:14:04.920 and asked for a request for prosals for between one 0:14:05.160 --> 0:14:09.640 to four gigawatts of nuclear power to power their data centers. 0:14:09.960 --> 0:14:13.280 That's so interesting, and I remember in your the note 0:14:13.280 --> 0:14:15.400 that you wrote about this topic. The thing that was 0:14:15.480 --> 0:14:19.160 also interesting. I think it was even companies that were 0:14:19.280 --> 0:14:24.000 not necessarily engaged with the tech companies directly saw their 0:14:24.000 --> 0:14:27.760 share prices increase with each of these announcements. I suppose 0:14:27.760 --> 0:14:32.320 it's not just reflecting how much influence these tech companies 0:14:32.480 --> 0:14:35.360 interest has on the sector's prospects as a whole. 0:14:35.600 --> 0:14:39.080 The two companies that you're talking about Oklo trades on 0:14:39.120 --> 0:14:43.480 the New York Stock Exchange Oklo and New Scale trades, 0:14:43.880 --> 0:14:46.560 I think it's over the counter. SMR is the symbol. 0:14:46.840 --> 0:14:50.840 New Scale suffered a setback at the end of twenty 0:14:50.920 --> 0:14:54.680 twenty three when their principal project selling four hundred and 0:14:54.720 --> 0:14:59.440 seventy two megawate plant to uamps based on the Idaho 0:14:59.560 --> 0:15:04.520 National That project was canceled because of allegedly high costs 0:15:04.760 --> 0:15:07.440 that stock try to below two dollars or close to 0:15:07.480 --> 0:15:09.840 two dollars. I checked today that stock is up to 0:15:09.920 --> 0:15:14.040 twenty six dollars. New Scale has the only company so 0:15:14.200 --> 0:15:17.520 far that has gone through the licensing gauntlet of the 0:15:17.640 --> 0:15:22.120 NRC with their fifty megawatt reactor. They're upgrading they're designed 0:15:22.120 --> 0:15:24.720 to seventy seven megawatts and they hope that they will 0:15:24.720 --> 0:15:27.240 be out of the gate with that sometime in the 0:15:27.280 --> 0:15:32.080 middle of twenty twenty five. And they have many negotiations 0:15:32.240 --> 0:15:36.160 with potential data center companies, and so there's a tremendous 0:15:36.160 --> 0:15:38.440 amount of interest for them. They seem to be ahead 0:15:38.440 --> 0:15:42.480 of the market. Olklow as well has signed various different 0:15:42.560 --> 0:15:45.960 contracts with data center companies. They're having an approach which 0:15:45.960 --> 0:15:49.560 are much smaller up to fifty megawatch reactor which can 0:15:49.640 --> 0:15:53.120 be deployed very quickly, very easily. They're in the process 0:15:53.200 --> 0:15:56.040 of talking with the US Air Force for building a 0:15:56.520 --> 0:15:59.760 reactor that will sell electricity to an Air Force base 0:15:59.840 --> 0:16:04.160 in Alaska, and that's a very interesting project. Their technology 0:16:04.240 --> 0:16:09.160 is also well suited to providing and displacing electricity from 0:16:09.200 --> 0:16:12.320 diesel generators in the far north of Canada. 0:16:12.400 --> 0:16:16.040 For example, when you're talking about New Scale. You mentioned 0:16:16.280 --> 0:16:20.720 the NRC, which I presume is an abbreviation for Nuclear 0:16:20.880 --> 0:16:22.680 Regulatory Commission. 0:16:23.240 --> 0:16:23.720 Exactly. 0:16:23.840 --> 0:16:27.320 Amazing, So, apart from clarifying what that abbreviation means, I'm 0:16:27.360 --> 0:16:30.200 kind of curious because it sounds to me like from 0:16:30.200 --> 0:16:32.160 the way you're describing it is that if we're looking 0:16:32.280 --> 0:16:35.480 at the progress these companies are making in getting real 0:16:35.600 --> 0:16:39.600 credible projects close to commercialization, we should be looking at 0:16:39.680 --> 0:16:44.000 how they're getting through the NRC's process. The NRC is 0:16:44.000 --> 0:16:45.800 a US agency, Is that correct? 0:16:46.680 --> 0:16:50.600 Is yes, But there is the Generic Design Assessment in 0:16:50.640 --> 0:16:54.800 the UK, the Canadian Regulatory They all have very rigorous 0:16:54.880 --> 0:16:57.960 processes to make sure that the nuclear technology that's being 0:16:58.000 --> 0:17:00.960 developed is going to be safe opera R correctly, and 0:17:01.000 --> 0:17:03.520 it's in our interest that we have a very rigorous 0:17:03.560 --> 0:17:08.440 process for that. The Biden administration passed the Advanced Act, 0:17:08.680 --> 0:17:12.640 which is going to suggest to the NRC to streamline 0:17:12.680 --> 0:17:15.520 the process so instead of taking three to four years 0:17:15.520 --> 0:17:18.000 to license, it should be done in twenty four miles. 0:17:18.119 --> 0:17:21.639 And also, New Scale spent five hundred million dollars on 0:17:21.680 --> 0:17:25.800 its own staff preparing a license application and paying the 0:17:25.840 --> 0:17:29.119 fees that the NRC would charge for reviewing all of 0:17:29.160 --> 0:17:32.840 these applications. That's a pretty formidable obstacle for many of 0:17:32.880 --> 0:17:36.600 the upcoming startups in the nuclear power industry, and so 0:17:36.800 --> 0:17:39.640 there is some provisions in the Advanced Act to sort 0:17:39.680 --> 0:17:41.800 of lessen that financial burden. 0:17:42.240 --> 0:17:46.040 So it sounds like there's a lot of tailwinds to 0:17:46.119 --> 0:17:51.040 brewing for particularly SMRs, Advanced Nuclear, all of these companies 0:17:51.160 --> 0:17:53.280 that we're talking about. You know, for all the reasons 0:17:53.280 --> 0:17:55.920 we discussed this on nuclears back in fashion, there's also 0:17:55.960 --> 0:17:58.840 this new need of meeting data sent some demand and 0:17:58.920 --> 0:18:02.000 very specifically the tech industry that can really make things 0:18:02.000 --> 0:18:05.400 happen are showing so much interest. So with that sort 0:18:05.440 --> 0:18:08.640 of very optimistic picture in mind, I suppose it's also 0:18:08.720 --> 0:18:11.000 your job as an analyst to pour cold water all 0:18:11.000 --> 0:18:14.359 over every time someone gets too excited about any new technology. 0:18:14.440 --> 0:18:16.280 That's that's kind of what we do. So what are 0:18:16.320 --> 0:18:18.919 the potential stumbling blocks for this upscaling? 0:18:19.680 --> 0:18:24.640 When I look at the opportunities presented to the nuclear 0:18:24.680 --> 0:18:28.240 power industry and all the vendors associated with it, I 0:18:28.320 --> 0:18:31.960 look at where they sit in the licensing process. Have 0:18:32.040 --> 0:18:35.399 they engaged with the NRC. There's twelve companies that are 0:18:35.440 --> 0:18:39.280 out in pre application discussions with the NRC, so they're 0:18:39.280 --> 0:18:42.719 having conversations as we're having conversations, say this is what 0:18:42.760 --> 0:18:45.400 we're proposing to do. Does this make sense? Yes, back 0:18:45.480 --> 0:18:49.200 and forth. So if you're not in the NRC engagement 0:18:49.280 --> 0:18:52.480 process already, I don't consider you a serious company that's 0:18:52.520 --> 0:18:54.879 going to come to the finish line sometime in the 0:18:54.920 --> 0:18:57.639 next few years. The second thing that is very very 0:18:57.680 --> 0:19:02.000 important is that you have the financial backing that it 0:19:02.040 --> 0:19:04.400 takes to go ahead and cross the finish line. We've 0:19:04.440 --> 0:19:07.119 seen the first company who was trying to build a 0:19:07.160 --> 0:19:11.280 small microreactor. The first project was going to be in Canada. 0:19:11.400 --> 0:19:14.679 They went bankrupt because they didn't sort of succeed in 0:19:14.800 --> 0:19:18.440 raising the cash that was necessary to go forward. That's 0:19:18.560 --> 0:19:21.919 very very important, and do they have a technology that 0:19:22.119 --> 0:19:26.080 seems to be responsive to the needs of the utility 0:19:26.200 --> 0:19:31.640 marketplace and also the hyperscale opportunity. There are big distinctions 0:19:31.680 --> 0:19:36.080 between small module reactors, which are light water reactors, which 0:19:36.119 --> 0:19:39.880 are just innovations of just shrinking the size to the reactor, 0:19:40.000 --> 0:19:42.879 but the same type of technology, and the idea is 0:19:42.960 --> 0:19:46.040 we can build them smaller for less money and quicker. 0:19:46.240 --> 0:19:50.640 Then the advanced react to technologies, the terror Powers which 0:19:50.680 --> 0:19:54.600 is developing a sodium cooled fast reactor, x Energy which 0:19:54.640 --> 0:19:58.280 is developing a helium cooled high temperature gas reactor, and 0:19:58.400 --> 0:20:02.639 Chiros which is developing a molten salt reactor hybrid type 0:20:02.640 --> 0:20:08.080 of technology. All of these represents innovations in the nuclear space. 0:20:08.359 --> 0:20:12.280 That's a departure from historical technology that has been deployed. 0:20:12.480 --> 0:20:15.119 If you think about the oil and gas industry, the 0:20:15.200 --> 0:20:18.959 renewable energy industry, we have seen a tremendous amount of 0:20:19.000 --> 0:20:22.480 innovation in all of those industries come to the marketplace 0:20:22.640 --> 0:20:26.439 and the result has been significantly reduced costs for the 0:20:26.480 --> 0:20:31.600 production of gas, oil and renewable wind power and solar power. 0:20:31.680 --> 0:20:34.520 Where has the innovation come in the nuclear space. We 0:20:34.560 --> 0:20:36.840 are now seeing it come in the form of a 0:20:36.880 --> 0:20:41.080 fast reactor, a high temperature gas reactor, and a molten 0:20:41.119 --> 0:20:45.400 salt reactor. These are new technologies that afford the promise 0:20:45.600 --> 0:20:49.040 of being a safer they promise to be more efficient, 0:20:49.240 --> 0:20:53.320 they promise to have less spent fuel, which is a problem, 0:20:53.400 --> 0:20:56.200 and they're very very exciting to see all of these 0:20:56.240 --> 0:21:01.480 moving forward. And it's a decision that utilities and hyperscalers 0:21:01.560 --> 0:21:05.199 need to sort of make a decision large reactors, small reactors, 0:21:05.359 --> 0:21:09.200 advanced reactors, and there's different risk and challenges that each 0:21:09.240 --> 0:21:11.520 of these face. And then if you even take it 0:21:11.560 --> 0:21:15.480 a step further, you have microreactors if we talked Oakloh 0:21:15.640 --> 0:21:18.760 And also we have fusion technology, which is something that 0:21:18.800 --> 0:21:22.920 we cannot ignore because a fusion industry has raised seven 0:21:22.960 --> 0:21:26.879 point one billion dollars for private sector investment among thirty 0:21:26.960 --> 0:21:30.920 or so companies, and having been to many fusion facilities 0:21:30.960 --> 0:21:33.800 in the US and Europe, I can say that there's 0:21:33.800 --> 0:21:37.920 something that about that technology that presents some very interesting 0:21:38.000 --> 0:21:42.760 possibilities for starters. The prototype that's being built in Devon's, 0:21:42.760 --> 0:21:47.560 Massachusetts by Commonwealth Fusion, it's located within three hundred meters 0:21:47.680 --> 0:21:51.200 of residential housing. You couldn't put a large reactor within 0:21:51.240 --> 0:21:54.479 three hundred meters or a small fission reactor. And this 0:21:54.600 --> 0:21:58.720 technology is safer, it will follow a different regulatory path, 0:21:58.920 --> 0:22:02.320 and so the path way to commercialization once they prove 0:22:02.359 --> 0:22:05.960 their technology, once they can commercialize their technology, will be 0:22:06.160 --> 0:22:08.280 much simpler and easier and faster. 0:22:08.720 --> 0:22:12.600 This kind of raises an interesting question to me. So 0:22:12.640 --> 0:22:16.840 we've got these five different pathways, including conventional nuclear and 0:22:17.080 --> 0:22:19.160 there is this kind of need to be met, and 0:22:19.200 --> 0:22:21.760 we talked about you knows so challenging in different ways. 0:22:21.920 --> 0:22:25.040 But the fact that there's five different ways to get there. 0:22:25.200 --> 0:22:28.879 On the optimistic side, does that multiply the chances is 0:22:28.960 --> 0:22:31.360 that something will be able to meet the moment by 0:22:31.400 --> 0:22:35.400 five because there's five different, quite independent pathways to get there. 0:22:35.480 --> 0:22:37.800 But on the flip side, does that mean that if 0:22:37.800 --> 0:22:40.680 one of these technologies can get their first to meet 0:22:40.680 --> 0:22:44.359 the moment, does it massively squash the chances of relevance 0:22:44.440 --> 0:22:45.160 for the other four. 0:22:45.800 --> 0:22:48.840 I certainly would not want to be a utility right 0:22:48.880 --> 0:22:52.040 now trying to decide which horse to bet on in 0:22:52.080 --> 0:22:55.119 those five technology options. There's not going to be a 0:22:55.119 --> 0:22:58.920 winner take all situation. I think that the larger reactors 0:22:58.960 --> 0:23:02.680