Speaker 1: Hi, it's suckh Bloomberg's Odd Lots podcast recently did a
Speaker 1: great episode about the rise of nuclear power in China
Speaker 1: is the only country deploying nuclear at a large scale
Speaker 1: right now, and I thought you would enjoy listening to it.
Speaker 1: So here's the extra episode. We'll be back with a
Speaker 1: new episode of Zero on Thursday.
Speaker 2: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 3: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 4: I'm Joe Wisenthal and I'm Tracy all the way.
Speaker 3: Tracy, you know, we've been talking a lot about the
Speaker 3: US energy system for obvious reasons, at least when it
Speaker 3: comes to electricity. I don't know about you. I kind
Speaker 3: of feel like the more we talk about it, the
Speaker 3: less I understanding.
Speaker 4: Yes, yes, absolutely, I think there are a couple problems. So, like,
Speaker 4: even beyond the actual different technologies for generating power, there's
Speaker 4: the patchwork of like how different grids work in different states.
Speaker 4: There's the different regulations, the different like interoperability and all
Speaker 4: of that. And then even if we look like beyond
Speaker 4: the US, it gets I guess even more different.
Speaker 3: Yes, well, I sort of wonder maybe we can learn
Speaker 3: something about the US by a little compared and contrast. Right,
Speaker 3: So if we look at the US and we still
Speaker 3: don't totally get how it works, maybe, I don't know,
Speaker 3: just to thought, maybe we'll learn something about the US
Speaker 3: by looking at some different system and then we have
Speaker 3: something to compare it to. It might be a waigh
Speaker 3: in by looking at the outside world.
Speaker 4: I'm a big fan of doing this, by the way,
Speaker 4: just to identify like different choke points in a particular
Speaker 4: domestic process. If you think that the US can't do
Speaker 4: something for whatever unidentifiable reason or I don't know, cultural
Speaker 4: like holdback, but if you look at a different country
Speaker 4: and they're doing it at scale, very very quickly, then
Speaker 4: I think you can learn a lot about yourself.
Speaker 3: Well, that's exactly right. And so one of the things
Speaker 3: again that comes up from time to time here in
Speaker 3: our conversations is nuclear and this is just one example
Speaker 3: of a source of power that may or may not
Speaker 3: be important in our future. But according to and I'm
Speaker 3: looking at a story from the Economist, over the past decade,
Speaker 3: China has added thirty seven nuclear reactors according to the
Speaker 3: International Atomic Energy Agency. I don't know, maybe we've added
Speaker 3: like two. I forget how many there are at that
Speaker 3: Georgia plant. A couple more, maybe restarted. But you know,
Speaker 3: we talk all the time about nuclear and how hard
Speaker 3: it is and how hard the financing is and the
Speaker 3: labor force and the learning laws, and we forgot to
Speaker 3: you know, we forgot how to build them for various reasons.
Speaker 3: But that's not and it's so expensive. There's all these
Speaker 3: cost overruns every time. But apparently that is not the
Speaker 3: case everywhere, and that there are other parts of the world,
Speaker 3: particularly China, where they just keep building at scale, and
Speaker 3: maybe we could learn a little bit of how they
Speaker 3: do that and how they finance it and how they
Speaker 3: avoid forgetting how to build them.
Speaker 4: I think this is so interesting, this particular approach that
Speaker 4: compare and contrast, and it is absolutely true. I think
Speaker 4: the US has the most nuclear reactors out there, like
Speaker 4: almost one hundred or something like that, but it took
Speaker 4: us decades and decades to build them, and as you
Speaker 4: rightly point out, we haven't built many new ones that recently. Meanwhile,
Speaker 4: China is adding more and more, and they make it
Speaker 4: look easy. I mean, I guess they are just like
Speaker 4: giant things to boil water, but you know, China really
Speaker 4: makes it look easy. So what can we learn from China.
Speaker 3: We really do have the perfect guests. By the way,
Speaker 3: we've had this guest on in the past. We talked
Speaker 3: to him about something completely different. Yes.
Speaker 4: This was during the depths of the COVID crisis, Yes,
Speaker 4: and we were talking to this person. He was based
Speaker 4: out in Shanghai and we were talking basically about how
Speaker 4: they were getting food into apartment buildings and staying alive
Speaker 4: during that time.
Speaker 3: Yeah, so that was an interesting sort of logis story
Speaker 3: and it's own right. If you're under complete lockdown and
Speaker 3: a Shanghai apartment building, how do you actually get food?
Speaker 3: And anyway, I'm thrilled because now we're recording this December seventeenth,
Speaker 3: twenty twenty four, we are talking to him in completely
Speaker 3: different times.
Speaker 4: He's been freed from lockdown.
Speaker 3: He is now here in studio with us. So we
Speaker 3: are going to be speaking with David Fishman, senior manager
Speaker 3: at the Lantau Group. He's based in China typically where
Speaker 3: he mostly focuses on the Chinese energy system. So literally
Speaker 3: the perfect guest and a repeat guest. So David, thank
Speaker 3: you for coming on. Ad lads, welcome to New York City,
Speaker 3: Welcome back.
Speaker 5: Thank you for having me.
Speaker 3: What do you do the only other time we talked
Speaker 3: to you, the only thing we knew about you is
Speaker 3: that you were figuring out how to get food into
Speaker 3: your apartment. What do you do now when that's no
Speaker 3: longer the pressing issue?
Speaker 5: Yeah? Sure. So I work at a company called the
Speaker 5: Lantau Group. We are an economic consultancy. We're doing power
Speaker 5: and gas consulting across apac and so I'm focused on China.
Speaker 5: I'm in the China. We're doing the business of electricity.
Speaker 5: So for me, that means either somebody who wants to
Speaker 5: build an electricity generation asset, wants to sell one, wants
Speaker 5: to sell a portfolio of assets, wants to invest in one,
Speaker 5: maybe through a fund or as some other type of
Speaker 5: investment product. And then on the what we'd call our downstream,
Speaker 5: who uses the electricity right, your major multinationals, your factories,
Speaker 5: anybody who uses electricity as an input to produce things.
Speaker 5: So we're working in the business of electricity, trying to
Speaker 5: make buying and selling electricity more economic for everybody involved.
Speaker 4: Well, I'm just going to dive into the nuclear aspect
Speaker 4: of this. Then, you know, Joe gave us some contours
Speaker 4: around how much China is currently building. When did China
Speaker 4: decide that it was interested in nuclear and what was
Speaker 4: the sort of like thought process the strategy about how
Speaker 4: nuclear would fit into everything else, including the coal power
Speaker 4: that China is famous for using.
Speaker 5: Yeah, I mean the history of the Chinese civil nuclear
Speaker 5: power industry goes back to stems back to the eighties.
Speaker 5: So looking at you know, the mid to late eighties
Speaker 5: is when China was signing agreements to bring in its
Speaker 5: first nuclear reactor technology. At the time, it was there
Speaker 5: are two different paths that were pursuing. They signed an
Speaker 5: agreement with Framatome, a French company, to bring over one reactor,
Speaker 5: and they developed a domestic reactor with at the time
Speaker 5: the Soviet Union to have a domestic technology tree as well.
Speaker 5: So in the eighties, China was actually experiencing some pretty
Speaker 5: rapid economic growth, especially in the late eighties, and looking
Speaker 5: to expand its power supply rapidly and at the time
Speaker 5: it was quite tight, and so nuclear was seen as
Speaker 5: a potential way to expand the power supply and get
Speaker 5: into a power generation for what was at the time
Speaker 5: something very new for China.
Speaker 3: What did you so I mentioned literally from just reading
Speaker 3: the first paragraph of a paywalled economist story that number
Speaker 3: of about thirty seven new nuclears. I saw that one too,
Speaker 3: just like I just google how many new clear reactors
Speaker 3: are big built in China? Scrolled down where I find
Speaker 3: something in the Google search. This is how the research
Speaker 3: is done, folks. Well, why don't you, in your words,
Speaker 3: give us a sense of the size and scale of
Speaker 3: Chinese civil nuclear generation and where it's going, and then
Speaker 3: sort of like the role it generally plays in.
Speaker 5: The overall portfolio there, yeah, surescribe it. Yeah, sure so.
Speaker 5: So nuclear in China has the interesting status of being
Speaker 5: both relatively large and still somehow small. Large in the
Speaker 5: sense that it's one of the largest operating fleets in
Speaker 5: the world. Right, You've got you know, fifty almost sixty
Speaker 5: reactors operating, We're talking about nearly sixty gigawatts of generation capacity.
Speaker 5: But then in the context of China's entire generation fleet, right,
Speaker 5: they've got well over a thousand gigawatts of coal and
Speaker 5: then many more thousands of gigawatts of wind and solar.
Speaker 5: So it's both large in the context of the world,
Speaker 5: but also small. And that's the case for a lot
Speaker 5: of things in China. The thing that can be large
Speaker 5: in China canoso And what's.
Speaker 3: The ambition for you know, looking out you know, in
Speaker 3: a five year plan. I don't know how whether they
Speaker 3: do that for energy? Two? Where is nuclear potentially? How
Speaker 3: much could nuclear be a thing? What's the size and
Speaker 3: scale of the ambition?
Speaker 5: Yeah, sure so long term? I mean it depends on
Speaker 5: how your energy planners and your economic planners and vision
Speaker 5: the long term makeup of the grid. What type of
Speaker 5: power are we using in twenty fifty Is it going
Speaker 5: to be a little bit or a medium amount or
Speaker 5: a lot of nuclear? So it's scenarios, right, and China
Speaker 5: has scenarios too, for a high end a low end.
Speaker 5: So the recent scenarios that I've seen, Originally it was
Speaker 5: saying no less than three hundred gigawatts two hundred and
Speaker 5: fifty three hundred gigawats, so two hundred and fifty or
Speaker 5: three hundred reactors, right, two hundred and fifty units. So
Speaker 5: the United States has just about one hundred right now.
Speaker 5: So if they got to that scenario, it would be
Speaker 5: about two and a half times what the US has
Speaker 5: right now.
Speaker 4: So what's the process by which a new nuclear reactor
Speaker 4: gets built in China, and how much does it differ
Speaker 4: from what goes on in the US.
Speaker 5: Sure, well, the steps of the process are actually very similar.
Speaker 5: These are international best practices for how you build these
Speaker 5: types of infrastructure. So you have to choose a site.
Speaker 5: You're going through a siting process and environmental impact report.
Speaker 5: Maybe you've got to make sure the local sea life
Speaker 5: is not going to be affected by warm water being discharged,
Speaker 5: there's no endangered species nearby, all those different aspects. So
Speaker 5: you choose your site. That takes a few years. You
Speaker 5: have consultation period, there's a period for the public to
Speaker 5: maybe express their dissatisfaction. This happens in China too. And
Speaker 5: when the site is finally selected, then you start pre construction.
Speaker 5: You can level the site, you can connect communications utilities,
Speaker 5: you can do all your pre groundwork, and then we're
Speaker 5: waiting for a really key milestone called FCD. That's first
Speaker 5: concrete need and that's when the first barrel of safety
Speaker 5: related concrete is poured at the site. And so that
Speaker 5: would be the beginning of your construction of your containment building.
Speaker 5: And so from FCD to your full construction period, you
Speaker 5: do construction, you do installation, you have commissioning. Maybe you
Speaker 5: encounter some issues during commissioning, you do trouble shooting right,
Speaker 5: and eventually you fully connect. You connect it, you load
Speaker 5: your fuel, you have your first criticality the first time
Speaker 5: that you know, fission starts in the reactor. Then you
Speaker 5: connect it to the grid and then you get up
Speaker 5: to one hundred percent power and you got a nuclear
Speaker 5: power plant. If you do it quick, we'll you're looking
Speaker 5: at ten to twelve years. If you do it not
Speaker 5: so quick, you're looking at a lot more than that.
Speaker 3: So it takes a long time in China too, So
Speaker 3: you know, we look at you as construction build. I
Speaker 3: was like, oh can't we It's a log process anywhere
Speaker 3: you look. I want to ask about the financing. So
Speaker 3: if there's a new who's paying for this? And also
Speaker 3: how are they selling this energy? Because one thing I
Speaker 3: get the impression of is that setting aside the cost
Speaker 3: of building a new nuclear reactor, which is an expensive,
Speaker 3: time consuming process. The electricity market structure also seems to
Speaker 3: matter a lot because you need a certain amount of
Speaker 3: guaranteed off take, You need a certain amount of price
Speaker 3: stability if the price robs to zero for a long time,
Speaker 3: because there's it's very sunny and windy in that area,
Speaker 3: and suddenly you're that's screwing with the economics of it.
Speaker 3: And so market structure and financing are both important. Talk
Speaker 3: to us about how that works in China versus two.
Speaker 5: Right. Sure, So the builders, right, the companies that are
Speaker 5: constructing and eventually owning the assets are all state owned enterprises. Okay,
Speaker 5: So you've got these great big sos. Their job is
Speaker 5: to own and operate nuclear power plants. And so when
Speaker 5: they go out to secure financing, of course they're securing
Speaker 5: financing from state owned banks as well. They're going to
Speaker 5: be getting very preferential loan treatment, right, very low percentage
Speaker 5: rates maybe two percent, one and a half percent, things
Speaker 5: like that. For a huge infrastructure like that, we're talking billions.
Speaker 3: Of cultural rate, not the spread.
Speaker 5: Okay, keep going, so very very low rates because again
Speaker 5: they have a mandate to build. This is state banks,
Speaker 5: state infrastructure, and state builders. They need to build these things.
Speaker 5: And then when they're going out to sell power right now,
Speaker 5: they're given a guaranteed on grid rate. So the grid
Speaker 5: company and the power regulators say, when you complete your
Speaker 5: plant and you start selling power, we will make sure
Speaker 5: you receive this much for every kilo lot hour of
Speaker 5: power that you send into the grid. Long term, they
Speaker 5: want to marketize it. They want to have that exposed
Speaker 5: to the vagaries of the markets the same way that
Speaker 5: you would see maybe in the United States or Western Europe,
Speaker 5: and that will be an adjustment for China's nuclear industry.
Speaker 5: Historically they have only operated on this kind of fixed
Speaker 5: feed and rate.
Speaker 4: So, I mean, that's a pretty big comparative advantage if
Speaker 4: you're getting subsidized financing from a state owned enterprise or
Speaker 4: something like that. Plus at the moment you have that
Speaker 4: guaranteed off take, even though they might want to move
Speaker 4: to a market based system before. It also strikes me
Speaker 4: that there are a few other potential comparative advantages, like
Speaker 4: lots of ready labor, lots of manufacturing capacity presumably that's
Speaker 4: able to make the stuff you need for these things.
Speaker 4: Walk us through all the different advantages that China has
Speaker 4: in this process.
Speaker 5: Yeah, sure, so if you maybe you've seen before or not,
Speaker 5: if you look at one of those like stacked bar charts,
Speaker 5: that it compares all the cost components of you know,
Speaker 5: building one of these things in China versus Europe versus
Speaker 5: the United States. It's not like you'd point to any
Speaker 5: single component of the stacked bar and say, ah, that's it.
Speaker 5: That's the key. That's why they're so cheap. Every single
Speaker 5: component is cheaper. Right, You've got your cost of capital
Speaker 5: is lower, You've got your construction timeline is so tightly managed.
Speaker 4: Right, and so you're saving on interest costsactly.
Speaker 5: And the sooner you can connect to the grid and
Speaker 5: start selling power, that's when you start making your money back. Right.
Speaker 5: So every day that you go over your construction schedule
Speaker 5: as a hunt, we say in the US about a
Speaker 5: million dollars of missed power sales and then also about
Speaker 5: a million dollars of interest payments. So here you got
Speaker 5: this two million dollars spread every day over your construction
Speaker 5: schedule that was originally planned. Like that's just mind boggling.
Speaker 5: Then we look at the production capacity, right, China's incredible
Speaker 5: industrial production capacity. We're talking about these heavy forged components.
Speaker 5: Maybe only a couple of companies in the whole world
Speaker 5: can make things like the reactor pressure vessel, the steam generators,
Speaker 5: the pressure risers, the primary piping, the reactor cool and pump,
Speaker 5: all these things. And there's like three companies in the
Speaker 5: world that can make these, and now at this point,
Speaker 5: several of them are in China. And when they need
Speaker 5: to prototype, when they need to iterate, when they need
Speaker 5: to troubleshoot something, it's all in one industrial cluster. It's
Speaker 5: all a company and its subsidiaries or its sister partner companies, right,
Speaker 5: and so they can quickly trouble through things really quickly.
Speaker 5: So that's going to be your industrial production component very strong.
Speaker 5: You've got you know, people work longer hours, they'll work
Speaker 5: through weekends, they'll work through holidays. China is really really
Speaker 5: competent at building very large construction, very large infrastructure.
Speaker 3: Right.
Speaker 5: It could be a dam, or a bridge, or a
Speaker 5: highway or a high speed railway, or a nuclear reactor.
Speaker 5: When it comes to the construction know how of being
Speaker 5: able to do it on time and like an oiled machine,
Speaker 5: they're winning there too. And then we talk about the
Speaker 5: actual way they're building the nuclear power plant. Something really
Speaker 5: interesting here. This was actually pioneered by Westinghouse out of
Speaker 5: the United States, something called modularized construction, where on site
Speaker 5: or off site, you're prefabricating large portions of the reactor,
Speaker 5: portions of the containment building, and so you can work
Speaker 5: on individual components at the same time, bring it to site,
Speaker 5: and then you get the largest crane in the world
Speaker 5: that lifts this massive, massive, pre assembled component into place.
Speaker 5: When you're able to work like that, you can cut
Speaker 5: down the construction schedule even more Interestingly, Westinghouse pioneered that
Speaker 5: that they haven't been really successful in implementing it in
Speaker 5: their recent builds. China, on the other hand, learned from
Speaker 5: Westinghouse and has been very successful with this modulized construction approach.
Speaker 3: Can you talk more about that, because it's very intuitive, right,
Speaker 3: the idea that the more you can build at the
Speaker 3: factory and the less you have to build on site
Speaker 3: makes it easy and a lot of the so far,
Speaker 3: it seems like mostly hype about small modular reactors in
Speaker 3: the US is sort of on this idea, like why
Speaker 3: don't start a project from scratch? Why is it apparently hard?
Speaker 3: Even though in theory that seems very obvious, because I
Speaker 3: don't know if there actually are any modular reactors in
Speaker 3: the US despite the sort of intuitive appeal.
Speaker 5: So I think I gotta clarify here, there's modularized construction
Speaker 5: and there's small modular reactors. Okay, so SMRs are small
Speaker 5: modular reactors. They refer to a situation where the entire
Speaker 5: reactor is encased in a single unit.
Speaker 3: Oh okay, got it. Yeah, but it's still this idea
Speaker 3: that the lot of the fabrication process happens not at
Speaker 3: the site itself. Again, something that feels highly intuitive and
Speaker 3: apparently easier so than time.
Speaker 5: Well so my understanding from the Westinghouse design approach when
Speaker 5: they used this for the first time in designing the
Speaker 5: AP one thousand technology that we're built here in Vocal
Speaker 5: in the United States, is one of the major barriers. Well,
Speaker 5: there's terveral. There's always going to be regulatory barriers, right,
Speaker 5: it's a new way of doing things. Anytime it's a
Speaker 5: new way of doing things, the regulator is going to
Speaker 5: want you to jump through a million hoops to try
Speaker 5: to clarify and justify that what you're doing is defensible
Speaker 5: and safe. So you've got that one, of course, But
Speaker 5: then the actual logistics of lifting these massive, massive, we're
Speaker 5: talking thousands of tons of prefabed components. They actually had
Speaker 5: to design and then especially contract the world's largest heavy
Speaker 5: lift crane. Westinghouse did just to be able to lift
Speaker 5: the first one. They worked with an American company to
Speaker 5: design to custom design this giant fixed base ring crane
Speaker 5: that requires other cranes to build it. Then you have
Speaker 5: this giant giant crane that's in place and it swings around.
Speaker 5: It usually works for two different units to build two
Speaker 5: reactors at the same site. Interestingly, they weren't able to
Speaker 5: use this giant giant crane in China because of a
Speaker 5: design miscommunication. The first AP one thousands that Westinghouse tried
Speaker 5: to build in China, they didn't leave space on the
Speaker 5: site to put the giant crane, so in the end
Speaker 5: they had to use a very very large roller crane instead,
Speaker 5: which just about did the job, but it forced them
Speaker 5: to change the way they built it. China has learned
Speaker 5: from that though, So the newest you know, QUA long
Speaker 5: one reactors that China builds, they use a giant ring crane.
Speaker 5: I believe they use a zoom lion to the Chinese
Speaker 5: brand has designed one of these, built one of these
Speaker 5: massive ultra heavy lift cranes as well, and so now
Speaker 5: that's you know, they're reaping those benefits.
Speaker 4: I have a slightly random question, which is building nuclear
Speaker 4: reactors how customized. Do the components that go into these
Speaker 4: actually have to be like how much does the design
Speaker 4: actually vary site to site?
Speaker 5: Well, if they are the same series of reactors, right,
Speaker 5: you could say the AP one thousand, right, that's a
Speaker 5: base unit. Now the ones that are built in vocal
Speaker 5: and the ones that were being built at Summer in
Speaker 5: South Carolina before that was canceled, those are probably a
Speaker 5: little bit different, right, but you know, largely part of
Speaker 5: the same series. The ones that were built in China
Speaker 5: were built on that same platform, but they would have
Speaker 5: been modified a little bit for the Chinese context. They
Speaker 5: called them Chinese AP one thousand CAP one thousands, But
Speaker 5: you could say they're substantially the same reactor with with
Speaker 5: small modifications. When we start talking about different series, though,
Speaker 5: if we say like the French design versus the US
Speaker 5: design versus what's being sold now in Korea or something
Speaker 5: like that, you'll see more similarities to their predecessors that
Speaker 5: they came up through different generations of technology. So like Korea,
Speaker 5: you'd see similarities to the old g Hatachi reactors because
Speaker 5: that's where they got their technology originally. Then you'd see
Speaker 5: to say a modern EP one thousand, these are different
Speaker 5: tech trees from different competitors.
Speaker 3: So if I'm a guy on Twitter listening to this,
Speaker 3: and I am a guy on Twitter, except I'm talking
Speaker 3: in this, but I'm just a guy on Twitter, and
Speaker 3: I'm hearing you talk about Okay, they get preferential lending
Speaker 3: from the state owned bank. The company me is state owned.
Speaker 3: Probably the crane company is state owned. There's probably a
Speaker 3: few other state owned businesses. And I think, yeah, okay,
Speaker 3: you know, they're really good at building reactors fast, but
Speaker 3: there must be some sort of accumulated debts and inefficiencies
Speaker 3: that come with all of these all of these entities
Speaker 3: that have something other than a profit motive. And you know,
Speaker 3: probably you know, I don't know that my intuition or
Speaker 3: my response to you, or my my dunk on you
Speaker 3: is that there's going to be all these accumulated losses
Speaker 3: that ripple through the systems on account of the fact
Speaker 3: that it's SOOE working with see after SOE, do we
Speaker 3: have any sense of how economic these projects actually are?
Speaker 3: Because if these were private companies, you say, oh, they're
Speaker 3: either making money, or if these were sort of strictly
Speaker 3: for profit listed companies, you say, well, they're making money.
Speaker 3: They're not making money whatever, How do we think about
Speaker 3: the actual economics of whether this is good investment? Because
Speaker 3: it's cool. Yeah, you know, China building dozens of reactors.
Speaker 3: How do we know these are good economic investments?
Speaker 5: Well, unless I can crack open you know, China National
Speaker 5: Nuclear Corporations books like, I can't tell you for sure
Speaker 5: if these are good investments.
Speaker 3: Right.
Speaker 5: But when they build them at that pace, when you
Speaker 5: look at it from the outside and you say, all
Speaker 5: the conditions are in place to have surely built this
Speaker 5: according to the budget you set for yourself. Right, you
Speaker 5: declared that you would build it with a certain budget
Speaker 5: and a certain time. Ye talk about the budget, right,
Speaker 5: So you're looking at you know, your construction period of
Speaker 5: five years, your pre construction, and your commissioning. You add
Speaker 5: another five years or so. Right. But then once they
Speaker 5: build it, they're saying, you know, we can build a
Speaker 5: single gigawatt unit reactor for five billion dollars four and
Speaker 5: a half billion, five billion. You look at numbers out
Speaker 5: of the US and they're saying, we're going to build
Speaker 5: what vocal cost was two units for twenty eight billion
Speaker 5: dollars or something like that. You do a little bit
Speaker 5: of Napkin math, and you say that reactor can't possibly
Speaker 5: make back how much money it costs to build and
Speaker 5: it's operating lifetime or maybe it will just about get
Speaker 5: there after forty years. And that's assuming that the plant
Speaker 5: operates in the spot markets really really well and sells
Speaker 5: power so efficiently and never gets curtailed and never has
Speaker 5: issues like that. Meanwhile, your Napkin math in China is saying, well,
Speaker 5: they're going to sell power at this rate for the
Speaker 5: next forty, maybe sixty years, maybe they'll do double life extension,
Speaker 5: maybe eighty years. And you know, so many killo odd
Speaker 5: hours of power times so much per kill a lot hour. Yeah,
Speaker 5: it looks like these things should be reasonably profitable. And
Speaker 5: keep in mind the profit motive of Chinese soees is different, right,
Speaker 5: They're expected to try to be profitable so they have
Speaker 5: cash flow to do things and you know, be functional.
Speaker 5: But if they have to take a hit, sometimes they will.
Speaker 5: They can be the lubricant in the system that causes
Speaker 5: the inefficiencies to be okay, because you've got you know,
Speaker 5: a major SOE that was okay, losing half a billion
Speaker 5: dollars last year. They'll make it back later. It's okay.
Speaker 5: The system didn't fall apart. They were the lubricant.
Speaker 4: So one way we could potentially judge the success of
Speaker 4: Chinese nuclear reactors is you could look at whether or
Speaker 4: not they are significant changing the energy mix. And there
Speaker 4: was a story out this week saying that China's domestic
Speaker 4: coal production had reached an all time high, and granted
Speaker 4: that's production that's not necessarily coal use, but I don't know,
Speaker 4: it doesn't seem like there's been a big impact just yet.
Speaker 1: Why is that?
Speaker 5: And yeah, and that's right. I saw that yesterday too.
Speaker 5: I'm bummed about that because I'm on record saying back
Speaker 5: in December twenty twenty three that I thought twenty twenty
Speaker 5: four would be the peak year, and I thought structurally
Speaker 5: we were in place to be able to peak coal
Speaker 5: consumption in twenty twenty four, and I think we're going
Speaker 5: to end up up one one point five percent year
Speaker 5: on year something like that, which for China is a
Speaker 5: huge amount of coal because it consumes so much coal.
Speaker 5: But it's really close, which of course means if we're
Speaker 5: up year on year and last year was the highest
Speaker 5: year ever, then this year is the highest test year ever.
Speaker 5: And so what are we looking at, though, We're looking
Speaker 5: at a power sector that is still growing consumption every
Speaker 5: year by seven percent year on year, six or seven
Speaker 5: percent year on year, compared to the US, where a
Speaker 5: good year is maybe like one percent or half a
Speaker 5: percent year on year, and you talk about data center
Speaker 5: demand growth is going to maybe rise that and everybody's
Speaker 5: freaking out, how are we going to meet this new
Speaker 5: consumption need? China has been growing like that seven percent
Speaker 5: eight percent in the past. It was even higher for
Speaker 5: decades now. So it to be able to peak coal consumption,
Speaker 5: we have to get to a single year where all
Speaker 5: of the incremental consumption growth is met by incremental generation
Speaker 5: from clean assets, right from wind and water and solar
Speaker 5: and nuclear. If we can't manage to do that in
Speaker 5: one year where all the incremental growth is covered by
Speaker 5: new incremental clean generation, thermal generation has to go up.
Speaker 5: And so that's still where we're at. We're real close.
Speaker 5: If it only grew by one point five percent this year,
Speaker 5: that means that seven percent of China's entire consumption mix
Speaker 5: was almost totally covered by growth year on year of
Speaker 5: wind and water and solar and nuclear, but it wasn't
Speaker 5: quite there, and so that's where we stand at twenty
Speaker 5: twenty four. I'm going to be made a liar of
Speaker 5: that statement at the end of last year where I
Speaker 5: thought coal consumption would peak this.
Speaker 3: Year since you mentioned it. Data centers is obviously a
Speaker 3: huge part of the story of the return of load
Speaker 3: growth in the US. I mean, there's obviously just the
Speaker 3: general modernization and country getting wealthier. But tell us about
Speaker 3: the data center's story in China as you see it
Speaker 3: and it's impact on the grid.
Speaker 5: Yeah, it's it's of course going to be another growth driver.
Speaker 5: The major difference here is that when China says, oh,
Speaker 5: we've got data centers coming in, so instead of six
Speaker 5: point five percent growth, it's going to be seven point
Speaker 5: five percent growth. Right, It's just what's a percentage point
Speaker 5: among friends, right, Whereas the United States going from half
Speaker 5: a percentage point to one point five or two percent
Speaker 5: is very different from how we've had to grow in
Speaker 5: the past. So China's i think, approaching this with much
Speaker 5: more sanguinity, maybe that they're just saying, yeah, it's going
Speaker 5: to be a driver of growth. Let's put them in
Speaker 5: some of our parts of the country that have low
Speaker 5: load and great renewable resources. We're going to put them
Speaker 5: Inner Mongolia is what we're going to put them. We're
Speaker 5: going to put growth demand centers in Inner Mongolia. They
Speaker 5: don't need to be close to the Chinese.
Speaker 3: Is Inner Mongolia.
Speaker 5: Yeah, it's it's sparsely populated, it's got a lot of
Speaker 5: great energy resources. The wind blows and the sunshines all
Speaker 5: day long, and there's no load out there. So it
Speaker 5: wouldn't have made so much sense maybe to cite you know,
Speaker 5: your heavy energy intensive industrial manufacturing so far from the
Speaker 5: demand center, so far from the coasts where you could
Speaker 5: get it to logistics. Oh, they put some stuff out there,
Speaker 5: but it wasn't so intuitive to put energy intensive industry
Speaker 5: out there. But data centers, Oh that's great, right. They
Speaker 5: don't need to be close to markets per se. You
Speaker 5: just need to get be them close to the affordable energy.
Speaker 5: So it's looking like inn Moongolia or places like that
Speaker 5: will be a great match for China's data center growth.
Speaker 4: So one of the things that's been happening in the
Speaker 4: US speaking of data centers is a lot of the
Speaker 4: big tech companies have been signing off take agreements with
Speaker 4: energy producers and they've been pushing them towards more renewable energy.
Speaker 4: So they say, we want clean energy to power these things,
Speaker 4: and you make it for us and we'll take it.
Speaker 4: Do you see a similar dynamic taking place in China
Speaker 4: or do people not care as much about the ultimate
Speaker 4: cleanliness of their energy for data centers.
Speaker 5: Yeah, that's a major driver of how the power sector
Speaker 5: offers power. Right, your customers demand a certain type of power,
Speaker 5: you should be able to meet their needs. Right now,
Speaker 5: in China, you'd split, or in anywhere anywhere in the world,
Speaker 5: not just in China, you'd split green power consumption on
Speaker 5: the end user end into voluntary and mandatory. So mandatory
Speaker 5: says the government says you have to consume a certain
Speaker 5: amount of electricity that is green. We call it a
Speaker 5: renewable portfolio standard or an RPS. Right, there's rps and
Speaker 5: US states, not all of them, but some of them,
Speaker 5: And there's RPS in China. So from that perspective, you
Speaker 5: could say the government mandates that you consume a certain
Speaker 5: amount of renewable energy to meet the quota. Now. Right now,
Speaker 5: that applies to utilities in China, but it doesn't yet
Speaker 5: apply to end users. Your aluminum smelter doesn't have that
Speaker 5: man yet, but that's the next stage of RPS that's
Speaker 5: being added right now. Data centers I think need to
Speaker 5: be it's quite high. I think it's eighty percent renewable.
Speaker 5: To build a new data center in China, you're going
Speaker 5: to need to have aluminum and steel and all these
Speaker 5: heavy energy intensive industries need to consume renewable. So that's
Speaker 5: your mandatory consumption. That's OURPS driven and then you've got
Speaker 5: your voluntary consumption. So voluntary consumption, you know, corporate social
Speaker 5: responsibility initiatives ESG right companies say we want to go green.
Speaker 5: We want to put it in our CSR report that
Speaker 5: we consumed x amount of renewables last year. We did
Speaker 5: this on a voluntary basis. We joined ARE one hundred,
Speaker 5: we joined the Science Based Targets initiative, and we want
Speaker 5: to claim that we are green. Yeah, that's your consumer
Speaker 5: tech brands, that's your luxury fashion and increasing. A lot
Speaker 5: of European brands are very aggressive on their renewable energy consumption,
Speaker 5: including in China. So if you're producing in China and
Speaker 5: selling to the world, you want to be able to
Speaker 5: say our production in China was also green. So that's
Speaker 5: voluntary consumption of green power. But you demand your power
Speaker 5: retail or to provide you with green electricity and they'll
Speaker 5: give you a quote for green electrics.
Speaker 3: We started on the nuclear side, we talked coal, but
Speaker 3: then we're all, you know, there's all these charts that
Speaker 3: are you know, great about all this solar being installed?
Speaker 3: Is the economics of that roughly the same in the
Speaker 3: sense that it's probably an sooe getting money from an
Speaker 3: so E bank, And talk to us about who's funding
Speaker 3: that and where does it make sense? Like why in
Speaker 3: some places is solar going to be solar wind part
Speaker 3: of the answer versus say nuclear.
Speaker 5: Right, So when it comes to wind and solar, these
Speaker 5: are being built differently from nuclear, right, They're not nearly
Speaker 5: as capital intensive. Also, they can be smaller, they can
Speaker 5: be more distributed. And so when you look at Chinese
Speaker 5: wind and solar, of course you still see sooees playing
Speaker 5: a big role, but there are as well ipp independent
Speaker 5: power producers or just non soees right, as well as
Speaker 5: foreign players. So you as a you know, a foreign
Speaker 5: investor who you know, like black Rock, can come into
Speaker 5: China and build a power plant if they want to,
Speaker 5: a wind or a solar farm, no problem. And so
Speaker 5: anyone can participate in that space if they do their
Speaker 5: financial analysis and they see the way to attractive project economics.
Speaker 5: So for if Chinese builders they borrow from Chinese banks,
Speaker 5: as will Chinese independent borrowers, then international players they might
Speaker 5: borrow from international banks, they might try to borrow from
Speaker 5: Chinese banks. They can do that as well. They will
Speaker 5: get you know, market competitive rates. This is a different
Speaker 5: kind of building compared to nuclear where it's instead of
Speaker 5: it's like a national strategic priority to build a rooftop
Speaker 5: sole or facility. Now that's much more of a commercial
Speaker 5: market operation. However, there are some projects in China that
Speaker 5: are national strategic priority. We talk about those huge desert bases,
Speaker 5: you know, hundreds of megawats gigawatts, hundreds of gigawats in
Speaker 5: the middle of the Gobi desert, coal plants, plus a
Speaker 5: wind far and plus a solar firem plus a huge
Speaker 5: battery array, all financed by a giant Chinese built by
Speaker 5: a Chinese soe. That's the kind of stuff that that
Speaker 5: kind of looks more like a nuclear power plant in
Speaker 5: the way that they finance and process that. But you know,
Speaker 5: rooftop solar facility in Eastern China. Now that's very much
Speaker 5: just a commercial play. If it makes money, if it
Speaker 5: makes sense, they'll build it.
Speaker 4: So when we talk about China's energy landscape or its
Speaker 4: energy mix, I mean a lot of what we're talking about,
Speaker 4: we're pulling in numbers from the Chinese government, right, like
Speaker 4: domestic production numbers, domestic usage numbers. And whenever you do that,
Speaker 4: there's always a certain element of uncertainty or a question
Speaker 4: mark over them. And there are some people who even
Speaker 4: if you were to say that China's coal production was
Speaker 4: finally falling, which it isn't, as you know, people wouldn't
Speaker 4: necessarily believe it. They'd be like, oh, well, China wants
Speaker 4: you to think that. So I guess my question is
Speaker 4: like how much should we believe some of these stats?
Speaker 5: Yeah, and this is going to be always very subject
Speaker 5: about how much you want to believe or how much
Speaker 5: you think is worthwhile believing. My take that I usually
Speaker 5: go to is like, look at the top levels. You've
Speaker 5: got your National Bureau of Statistics, You've got these you know,
Speaker 5: national level entities who's their job mandate is to report
Speaker 5: statistics as faithfully and as honestly as they can. All right, fine,
Speaker 5: you know what, that's their job mandate. I have no
Speaker 5: latitude to say I think they're doing their job dishonestly
Speaker 5: or something like that. But I do believe there are
Speaker 5: many kind of perverse incentives throughout the structure of the
Speaker 5: reporting economy in China that would create opportunity for misreporting information.
Speaker 5: When you tie you know, the county governor's promotion or
Speaker 5: lack thereof, to his ability to grow GDP in that
Speaker 5: province or in that county, you're creating the incentive for
Speaker 5: him to cook the data. When you're creating economic recovery,
Speaker 5: and you announced to and this happened. This is a
Speaker 5: real story. When you announce to a certain city in
Speaker 5: twenty twenty two that you're going to be evaluating how
Speaker 5: quickly they've recovered from COVID conditions by seeing how quickly
Speaker 5: their factories get back up to regular production. And you
Speaker 5: know that they're measuring that by seeing how much electricity
Speaker 5: they consume. Well, all of a sudden, you have.
Speaker 4: And everyone starts plugging stuff in.
Speaker 5: Right, So if you can say that people are trying
Speaker 5: to do their jobs honestly, and then you also have
Speaker 5: people that have been given perpose incentives to misreport did.
Speaker 5: I think that's where a lot of the uncertainty.
Speaker 3: I mean, this is the core problem of central plan.
Speaker 3: I mean, this is it in a nutshell. And obviously
Speaker 3: the most egregious examples of this were, you know, during
Speaker 3: the Great Leap Forward and all of the ways that
Speaker 3: either they you know, the steel production that was melting
Speaker 3: down literally anything of steel and destroying the economy. In
Speaker 3: twenty twenty four, what are some of the techniques used
Speaker 3: to avoid sort of egregious juking of the stats so that, yeah,
Speaker 3: someone's promotion who is tied to electricity consumption can't be
Speaker 3: sort of egregiously abused like that.
Speaker 5: Yeah, well, I mean famously or perhaps infamous. So I
Speaker 5: think it ended up it came out of like a
Speaker 5: WikiLeaks something that the former premier Leka Chang said he
Speaker 5: didn't look at GDP data.
Speaker 3: From certain produces and that's the terminal.
Speaker 5: Yeah, the le Kasyang index, And he said, I prefer
Speaker 5: to look at I think it was a rail cargo
Speaker 5: and electricity consumption, and there were the third item too, right,
Speaker 5: he said that these items, you know, the people in
Speaker 5: charge of reporting them, there's you know, my assumption is
Speaker 5: that his logic was there's less incentives to misreport these,
Speaker 5: so that these are the ones I want to look at,
Speaker 5: and you can maybe come up with your own version
Speaker 5: of the modern day Li Ku Chang index. I think
Speaker 5: electricity consumption is still fine, but maybe there's some other
Speaker 5: numbers that you say, look, this is all very centralized reporting.
Speaker 5: The reason I like electricity because it's all state grid, right,
Speaker 5: those numbers almost all come from state grid, and State
Speaker 5: grid is just a single unified entity. You're not gathering
Speaker 5: data points from many different companies. Maybe other stuff like
Speaker 5: we talk about cargo right again China Railways. Yeah, you
Speaker 5: have one centralized company that would be able to report
Speaker 5: that information. So if you want to modern you know,
Speaker 5: fashion your modern Lika Chanan decks, maybe try those types
Speaker 5: of indsease.
Speaker 3: So one other element obviously of the Chinese energy demand.
Speaker 3: We've talked a lot about the grid obviously and the
Speaker 3: power of the grid. Then there is the whole world
Speaker 3: of automobiles, which up until very recently was totally separate
Speaker 3: part of the energy system, but now it's around the world,
Speaker 3: but in particular China, and we talk about Chinese evs
Speaker 3: all the time being plugged into the grid. How much
Speaker 3: do we see the electrification of the Chinese automobile fleet, Like, A,
Speaker 3: how electrified is it right now? And b is it
Speaker 3: moving the dial on oil consumption? Because this is a
Speaker 3: pretty big question in the West, right like at some
Speaker 3: point will EV's become big enough where meaningfully starts to
Speaker 3: reduce our oil demand? And even in countries like Norway,
Speaker 3: I think like it's still barely moving the dial despite
Speaker 3: mass of electrification. What are we seeing in China right
Speaker 3: now on that front?
Speaker 5: Yeah, I mean in the major cities you say, Shenjen, Shanghai, Beijing,
Speaker 5: places like this, the EV penetration rate is noticeably high,
Speaker 5: and you'll see that they're easily identifiable. They have green
Speaker 5: license plates instead of the regular blue license flight, so
Speaker 5: you can just kind of look at them on the street.
Speaker 5: It's very expensive to get a license plate in Shanghai.
Speaker 5: Just the license plate itself is expensive. But EV's for
Speaker 5: a long time were free, like the license plate was free,
Speaker 5: so that was a great perk for them to pursue those.
Speaker 5: And yeah, there I think it was. New vehicle sales
Speaker 5: in Shanghai, for example, was fifty percent electric vehicles in
Speaker 5: the last reporting session, and it's really noticeable when you
Speaker 5: stand on a street corner in Shanghai, and I guess
Speaker 5: it's noticeable by the lack of the noise.
Speaker 3: I heard that everyone goes to Shanghai and says it's
Speaker 3: really quiet. That's you know.
Speaker 5: Look, I'm back in New York right now for the
Speaker 5: first time in a year, and I stand on a
Speaker 5: street corner. It's so loud, and I hadn't really noted
Speaker 5: the lack of the noise because I'm just used to
Speaker 5: it now, and it's it's I hear the roar of
Speaker 5: petroleum based engines all around me.
Speaker 3: Yeah.
Speaker 5: So eve's in the large cities. Penetration rates noticeably high.
Speaker 5: In the smaller cities still fairly high. When you go
Speaker 5: out to the more rural areas, it's going to drop off.
Speaker 5: Of course, there's more skepticism about the completeness of the
Speaker 5: charging network, just maybe some more uncertainty about the technology itself.
Speaker 5: You'll hear people in the countrysides and all batteries are dangerous.
Speaker 5: I heard that I saw a video once of an
Speaker 5: evy on fire. Things like that. Similar you know comments
Speaker 5: in the United States too. But the long term, the
Speaker 5: EV penetration rate will will only continue to rise.
Speaker 3: It's national oil consumption, I believe.
Speaker 5: So I think I saw. Now I'm not an oil specialist,
Speaker 5: but I think I've seen and I've read recently that
Speaker 5: that Chinese oil imports should have peeped right, that they
Speaker 5: should have be ready to draw down if you know,
Speaker 5: if I'm lying here, may God smite me down. But
Speaker 5: I think that that was the case, and that we
Speaker 5: see a structural decline in petroleum because of the adoption
Speaker 5: of evs.
Speaker 4: So, speaking of EV's, there is a lot of Chinese
Speaker 4: made clean tech that is here in the US, including
Speaker 4: solar panels as well. And this has been one of
Speaker 4: the frictions of the past few years, which is, you know,
Speaker 4: the US says it wants cleaner energy, and Chinese solar
Speaker 4: panels and evs are probably the cheapest forms of that
Speaker 4: technology around, and yet there's a lot of I guess,
Speaker 4: reluctance to import tons of those into the US, and
Speaker 4: certainly with Trump coming in, it seems like tariffs are
Speaker 4: on their way. How do you see all of that
Speaker 4: shaking out into the new year.
Speaker 3: Yeah.
Speaker 5: Look, in the United States, you're gonna decarbonize or you're
Speaker 5: gonna buy green tech. At exactly the rate that is economic. Yeah,
Speaker 5: and so if you have access to very affordable green tech,
Speaker 5: you'll do it at a faster rate. If you have
Speaker 5: access to more expensive green tech, you'll do it more slowly.
Speaker 5: And so I have to assume that if those teriffs
Speaker 5: go in place, unless alternative producers are able to offer
Speaker 5: similar quality goods at similar prices, then you're going to
Speaker 5: slow down your green transition. That's maybe a simple but
Speaker 5: obvious kind of answer there. On the Chinese side, of course,
Speaker 5: there will be some pain for exporters, anyone exposed to
Speaker 5: the United States market. Some solar panels, maybe some evs,
Speaker 5: some batteries I think are pretty significant if those are targeted. Yeah,
Speaker 5: you'd expect to see some pain on the Chinese side there.
Speaker 5: It's already an extremely extremely competitive environment in China. Most
Speaker 5: of these producers are in very thin profit margins, hanging
Speaker 5: on by a threat. It's good for consumers, it's not
Speaker 5: good for if you're holding those stocks. So this would
Speaker 5: only just be another bit of pain for them, denial
Speaker 5: of a potential revenue channel.
Speaker 3: Since you mentioned EV charging stations, we have this sort
Speaker 3: of weird patchwork here, and there's a lot of I'm
Speaker 3: a little ambiguity about the US government under Biden has
Speaker 3: earmarked a lot of money to build EV charging stations.
Speaker 3: It's a little unclear how much actually got built publicly.
Speaker 3: There seems to be a view that it hasn't been
Speaker 3: particularly successful on the public side. What is the structure
Speaker 3: of the buildout for charging stations in China? Is it
Speaker 3: publicly owned? Is it what's the deal?
Speaker 5: It's all of the above, I guess. So you've got
Speaker 5: you know, China State Grid or China Southern Grid. The
Speaker 5: grid companies they build charging infrastructure. Some of the EV
Speaker 5: makers themselves build their own charging infrastructure, maybe like like
Speaker 5: a Tesla supercharger, right. Some of them also build their
Speaker 5: own battery swap stations. I think Neo is quite famous
Speaker 5: for having battery swap stations. You can go pretty much
Speaker 5: any highway rest stop in China and you can find
Speaker 5: a Neo battery swap station.
Speaker 3: So then there's no time you just swap it in
Speaker 3: and out.
Speaker 5: Yeah, I'm there's a line to wait for the battery
Speaker 5: swap station if another Neo pulls ahead of you. But
Speaker 5: besides that, I mean, I think the major thrust, at
Speaker 5: least the ones that I've seen recently in the Southern
Speaker 5: Grid region have been by the grid company itself, right, So,
Speaker 5: China Southern Grid. I remember reading last year they said, ah,
Speaker 5: you know, we're planning to build one hundred thousand chargers
Speaker 5: this year, where you know, three min we're seventeen thousand
Speaker 5: chargers in so far. We're on track to finish our
Speaker 5: goal by the end of the year. And you do
Speaker 5: see it when you go to regions that have been
Speaker 5: targeted for those buildouts. Right. You can go to fairly
Speaker 5: rural areas in say Gwandong Province down in the south,
Speaker 5: and you'll find EV chargers installed there by China Southern
Speaker 5: Grid and a village where I don't think there are
Speaker 5: necessarily any evs, but hey, they got the infrastructure there
Speaker 5: because they said we're going to build one hundred k,
Speaker 5: and so they built a hundred K.
Speaker 3: David Fisherman so great to chat with you again, especially
Speaker 3: in person, and I'm so good you have other things
Speaker 3: to worry about besides figuring out how to get food
Speaker 3: in your apartment. Really appreciate you coming back on ovloins.
Speaker 5: Thanks a lot for having you guys.
Speaker 3: That was really helpful. Tracy, I learned all the things
Speaker 3: more or less that I wanted to know about how
Speaker 3: they're built so much nuclear.
Speaker 4: Yeah, what's that reaction? Well, it does. It leaves me
Speaker 4: wondering how like replicable it is in other countries, right,
Speaker 4: because obviously in places like the US, we don't really
Speaker 4: have subsidized finance on the scale that China does. We
Speaker 4: don't have a lot of cheap and skilled labor at
Speaker 4: the same time, and we don't have some of the
Speaker 4: let's put it this way, like regulatory hastiness maybe in
Speaker 4: approving these sites and these things. I don't know, like,
Speaker 4: how replicable do you think it is?
Speaker 3: No, this is the exact question, because you know there's
Speaker 3: some subsidy the loan Program's office exists, but we don't not,
Speaker 3: say the same gigantic state owned banks. Yeah, and then
Speaker 3: even if you solve the financing problem, and even if
Speaker 3: you solve the market off take problem, which is going
Speaker 3: to be very different, right because we have market grids
Speaker 3: in a lot of parts of the country, and so
Speaker 3: it's hard to sort of make that forty year commitment
Speaker 3: that you will get this price. Then there's all the
Speaker 3: logistics like oh, you needed this gigantic crane that's the
Speaker 3: biggest crane in the history of.
Speaker 4: Now you need a big crane to make the big
Speaker 4: crane you.
Speaker 3: Need to make. So this gets to I mean, this
Speaker 3: is a point that jigger Shaw makes all the time,
Speaker 3: but this idea that we're never gonna really do this economically,
Speaker 3: and David just mentioned the sort of daunting economics of Vogel.
Speaker 3: We're never gonna do this economically unless we do it
Speaker 3: over and over and over and over again. And it
Speaker 3: feels like the components of what it would actually take
Speaker 3: to do it over and over and over again is
Speaker 3: this massive centralized commitment to doing lots of different parts.
Speaker 3: And you know, it sounds like the regulatory side or
Speaker 3: the permitting thing that seems about the same. And the
Speaker 3: fact that the public can complain about endangered fish and
Speaker 3: all that that's sort of similar. So people complain about
Speaker 3: annoying local nimbi's. That doesn't really sound that much different.
Speaker 3: It sounds like everything else that's different.
Speaker 4: I suspect the nimbiism is slightly different too. But point
Speaker 4: to taken, and I do wonder, like, how do you
Speaker 4: even go about beginning to redevelop that nuclear muscle memory
Speaker 4: in the States. It seems really really hard, Like, Okay,
Speaker 4: we can reactivate some nuclear reactors like we're planning to,
Speaker 4: but starting like new ones from scratch. It just seems
Speaker 4: like there's such a limited pool of people who are
Speaker 4: capable of doing that and then putting in place, as
Speaker 4: you rightly pointed out, all the off take agreements and
Speaker 4: the network and everything needed to kind of make those
Speaker 4: things financially viable. It seems hard.
Speaker 3: By the way, I'm glad you asked that question about
Speaker 3: coal consumption that because that was really helpful, because it's
Speaker 3: one thing to say, well, another record year for coal consumption,
Speaker 3: but I guess the waight I think about it, at
Speaker 3: least in the short term, we don't know.
Speaker 4: When it's not coal consumption, it's production.
Speaker 3: Just to be cold production. Yeah, but it's really going
Speaker 3: to be about like if coal is in fact as
Speaker 3: a part of the you know, if it's only growing
Speaker 3: one percent, but electricity demand is growing six to seven percent,
Speaker 3: that is a good sign, right, even if it's not
Speaker 3: bending the curve down yet.
Speaker 4: Mm hm. Anyway, it's funny I will always associate Beijing
Speaker 4: with lots and lots of burning coal in the winter.
Speaker 3: By the way, I had heard that about how apparently
Speaker 3: the big cities now are really quiet, which is pretty cool.
Speaker 3: And once self driving cars are everywhere, there will be
Speaker 3: no honking either, And so we can look forward to
Speaker 3: a future. Maybe one day we're very peaceful, peaceful, quiet
Speaker 3: big cities.
Speaker 4: All right, something to hope for. Shall we leave it there?
Speaker 3: Let's leave it there.
Speaker 4: This has been another episode of the Outhoughts podcast. I'm
Speaker 4: Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 3: And I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 3: Follow our guest David Fishman, he's at Pretentious What. Follow
Speaker 3: our producers Carmen Rodriguez at Carman armand dash Ol Bennett
Speaker 3: at Dashbot and Kilbrooks at Kilbrooks. Thank you to our
Speaker 3: producer Moses Adam. From our Oddlots content. Go to Bloomberg
Speaker 3: dot com slash oud lots, where we have transcripts, a
Speaker 3: blog and a newsletter and you can chat about all
Speaker 3: of these topics, including energy and China, where we have
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Speaker 4: Thanks for listening.
Speaker 5: Eight