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Speaker 1: This is Dana Perkins and you're listening to Switched on

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Speaker 1: the BNAF podcast. Today we talk about nuclear energy. It's

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Speaker 1: really fallen out of fashion over the last decade with

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Speaker 1: retirements taking place all over the world, but recently countries

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Speaker 1: are starting to make noises again about this proven low

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Speaker 1: carbon technology and the question is really is it back Well,

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Speaker 1: it all depends on whether or not words become action.

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Speaker 1: At COP twenty eight in Dubai. At the end of

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Speaker 1: last year, twenty five nations committed to tripling global nuclear

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Speaker 1: capacity by twenty fifty. So how might that take shape?

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Speaker 1: Will they be reopening shutter nuclear facilities or building new ones,

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Speaker 1: and if they are new, will the new ones be

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Speaker 1: small modular reactors? And does the recent spike in the

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Speaker 1: price of enriched uranium dampen that outlook? So today we

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Speaker 1: feature our b and EF resident nuclear expert, Kris Kodomski,

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Speaker 1: and he shares some of the findings from the most

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Speaker 1: recently published Nuclear Market Outlook. As a quick reminder, give

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Speaker 1: us a review if you want to help other people

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Speaker 1: find us and subscribe if you want to help yourself

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Speaker 1: find future shows as they're published. But right now, let's

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Speaker 1: talk about nuclear's potential for a comeback story with Chris Kadomski. Chris,

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Speaker 1: welcome back to the show. Well, thank you, we're here

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Speaker 1: to talk about nuclear what else? And well we've had

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Speaker 1: you on the show before. You give us an update

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Speaker 1: on what's happening in this space. Post Fukushima. There were

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Speaker 1: a lot of retirements of nuclear power plans. Plenty of countries,

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Speaker 1: including Japan, including Germany, really backed away from it. And

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Speaker 1: I would say the temperature in the room got a

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Speaker 1: bit cold for nuclear. But now I want to know

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Speaker 1: what would you say the temperature in the room is

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Speaker 1: is nuclear? Is it back? Is it coming back?

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Speaker 2: Well, one of the younger analysts that BF came up

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Speaker 2: to me and said that nuclear energy, specifically SMR small

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Speaker 2: module reactors, is trending now. And I was very very

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Speaker 2: happy to hear that. It certainly is trending when you

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Speaker 2: look at say the media coverage and interest from politicians

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Speaker 2: and interest from environmental groups and goos or so, it

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Speaker 2: certainly is trending. But being a cheerleader for nuclear power

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Speaker 2: does not necessarily translate to an actual build out and

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Speaker 2: rapid expansion of nuclear power, which we would all sort

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Speaker 2: of hope would happen for us to go ahead and

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Speaker 2: tackle our net zero aspiration and our climate change goals.

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Speaker 1: I mean because in many respects, when you think about

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Speaker 1: nuclear as this carbon free source of energy, everything that

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Speaker 1: we shut down we've got to backfill with something else,

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Speaker 1: and in some cases that's ended up being coal, and

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Speaker 1: that certainly is not carbon free. And for everything that

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Speaker 1: we shut down, that's something else that it doesn't actually

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Speaker 1: get to replace. So the renewables are replacing then the

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Speaker 1: nuclear instead of other high carbon parts of the economy.

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Speaker 1: So it certainly is part of the solution, and let's

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Speaker 1: talk a bit about what part of the solution it

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Speaker 1: could be in the future. So with small modular let's

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Speaker 1: just do a definition for everybody who's listening, how do

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Speaker 1: you define small modular reactors?

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Speaker 2: Small module actors of which they're about eighty being developed

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Speaker 2: around the world, are defined to be somewhat less than

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Speaker 2: three hundred megawats electric, but of course there's exemptions to that.

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Speaker 2: Or the Rolls Royce reactor is coming in at over

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Speaker 2: four hundred and forty megawats a reactor, and so it's

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Speaker 2: also I characterize that as being an SMR. So besides

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Speaker 2: the size characteristic. We want to look at other aspects

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Speaker 2: of the technology. That it's safer, that it's modular, it

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Speaker 2: could be manufactured in a factory instead of built on site,

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Speaker 2: and that provides a lot of advantages as far as

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Speaker 2: getting down the cost learning curve and hoping to produce

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Speaker 2: a reactor that is going to be less expensive on

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Speaker 2: a per kilowatt basis. There also is extinction that we

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Speaker 2: need to sort of make between SMR which are small

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Speaker 2: and advanced reactors. Small SMRs are typically characterized by being

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Speaker 2: light water reactors, so it's in small innovations. It's a

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Speaker 2: small move and the only really innovation is really shrinkages side.

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Speaker 2: Maybe there's some additional safety features that they incorporate in

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Speaker 2: the post Fukushima environment. There's also something that I characterizes

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Speaker 2: advanced reactors that are using different types of technology, new technologies,

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Speaker 2: and the example would be the fast reactor that Bill

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Speaker 2: Gates is developing with terror power, which neutrons and electrons

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Speaker 2: are flying around at a much faster speed. They have

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Speaker 2: the ability therefore to sort of consume spent fuel and

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Speaker 2: to burn the fuel much more effectively. It's a hedge

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Speaker 2: against proliferation and it perhaps deals with the longevity issue

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Speaker 2: of spent nuclear fuel. There are also high temperature gas

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Speaker 2: reactors which theoretically cannot melt down, and there's molten salt

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Speaker 2: reactors where the uranium is already in molten state, very

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Speaker 2: very hot. So these are advanced features, more safety and

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Speaker 2: suggests that these reactors could be located closer to population

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Speaker 2: centers and also without the extensive then and expensive containment

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Speaker 2: that typically characterize the large reactors.

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Speaker 1: So more safety and certainly a lot of new technology

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Speaker 1: that's coming out. So yeah, definitely trending from a news standpoint,

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Speaker 1: trending topically, but let's talk about implementation. So where in

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Speaker 1: the world have they started working with SMRs.

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Speaker 2: For example, there's only two SMRs that operate in the

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Speaker 2: world today. One is in Russia north of the Arctic

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Speaker 2: Circle that's been operating since twenty nineteen early twenty twenty.

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Speaker 2: The other one has been operating for six months in China,

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Speaker 2: and it's an advanced reactor, a high temperature gas reactor.

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Speaker 2: Both the Russians and the Chinese are working on additional SMRs,

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Speaker 2: and there are other places in the world. Argentina has

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Speaker 2: been working on an SMR for the last ten years,

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Speaker 2: so and with very little progress for political and management

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Speaker 2: changes that are going on at the site. And very sadly,

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Speaker 2: the US had a leading SMR project that was to

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Speaker 2: be built in Idaho at Idaho National Labs, and that

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Speaker 2: project fell on its sword last November because they realized

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Speaker 2: that the cost of electricity they were delivering to the

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Speaker 2: customer ums was going to be too high and they

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Speaker 2: mutually agreed to terminate the project. So there are a

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Speaker 2: lot of questions about whether SMRs can deliver on the

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Speaker 2: promise of providing inexpensive electricity or competitive electricity that makes

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Speaker 2: it worthy of consideration by utility customer.

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Speaker 1: So now there are a number of countries though, that

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Speaker 1: are looking to really ramp up their nuclear capacity, or

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Speaker 1: at least that's what they said at COP twenty eight.

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Speaker 1: Can you talk a little bit about what those commitments

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Speaker 1: were and how much they're looking to increase nuclear on

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Speaker 1: their grids.

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Speaker 2: So the big news that came out of COP twenty

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Speaker 2: eight eight, who was an agreement between twenty five countries

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Speaker 2: or so to triple nuclear capacity from about three hundred

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Speaker 2: and seventy gigawatts now presently installed around the world to

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Speaker 2: over eleven hundred gigawatts by twenty fifty and so that's

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Speaker 2: a huge, huge lift. And so the question is that

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Speaker 2: was a proclamation by politicians NGOs, and I question whether

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Speaker 2: or not the execution can be followed through so that

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Speaker 2: we actually go ahead and get there. And if you

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Speaker 2: look at the ramp, you know, nuclear capacity around the

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Speaker 2: world has been essentially flat since Fukushima. This varies a

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Speaker 2: little bit, but if we're going to triple capacity in

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Speaker 2: the next say twenty five years twenty six years, we

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Speaker 2: really need to step on the gas and start developing things.

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Speaker 2: And the world is going to be characterized by different

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Speaker 2: technologies in different markets. In the East, where there's a

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Speaker 2: tremendous growth in demand for electricity, think China, India, Indonesia, Vietnam,

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Speaker 2: large reactors will probably fill role better than small reactors.

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Speaker 2: In the West where you have slower growth. Nevertheless, you

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Speaker 2: are having a lot of growth from the data centers

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Speaker 2: now projected, but they all the SMR technology would be

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Speaker 2: used preferably over large reactors for a variety of different reasons.

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Speaker 2: And in a market like the UK, UK is relying

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Speaker 2: on both large reactors. They're building Hinkley and they're planning

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Speaker 2: to build sizeball. But they'll also complement that with smaller reactors.

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Speaker 2: And the ideal thing about small reactors that they're more agile,

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Speaker 2: quicker to build, allegedly, less expensive to build, less risky

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Speaker 2: to build, and they sort of can replace the existing

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Speaker 2: coal infrastructure the country like the UK or Poland or

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Speaker 2: the US may have. So there's a little niche for

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Speaker 2: these SMRs to sort of replace coal and act as

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Speaker 2: a compliment to renewables. What's happening now, renewables is growing

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Speaker 2: like crazy, and as renewables grow, we need to add

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Speaker 2: natural gas capacity for the backup stand by a power

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Speaker 2: for when the wind is and blow or the sun

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Speaker 2: doesn't shine. We need to replace those natural guess capacity

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Speaker 2: with small SMRs that are agile enough to ramp up

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Speaker 2: to rapidly changing conditions and demand for electricity on the grid.

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Speaker 1: Now, I know it's been less than a year since

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Speaker 1: the last COP so these twenty five countries or so

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Speaker 1: haven't had a chance to actually really well build any

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Speaker 1: of these new projects. But does it look like what

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Speaker 1: are they making noises about potentially doing? Is it going

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Speaker 1: to be really varied all over the world? Are they

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Speaker 1: waiting for new technology? And you think they're going to

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Speaker 1: essentially say we're going to do this a little bit

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Speaker 1: closer to twenty fifty or some countries really getting started

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Speaker 1: right now.

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Speaker 2: Well, we've been tracking the development of SMRs and the

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Speaker 2: prognosis is not very very exciting as far as how

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Speaker 2: quickly they can be deployed. You know, there's twelve reactors

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Speaker 2: or ten reactors in the US that are undergoing pre

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Speaker 2: application feasibility studies or negotiations with the Nuclear Regulatory Commission,

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Speaker 2: and after they complete those pre application studies, the next

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Speaker 2: step will be for them to go ahead and formally

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Speaker 2: apply for an application to get a license to operate

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Speaker 2: and build a nuclear power plant. New Scale spent between

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Speaker 2: five hundred and six hundred million dollars to license its technology,

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Speaker 2: so it's a huge financial challenge and it takes a

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Speaker 2: very very long time, especially with some of these advanced

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Speaker 2: reactors which are atypical of what has come beforehand, which

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Speaker 2: is the light water boiling water reactors are pressurized water reactors.

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Speaker 2: So the NRC in the US and the Canadian authorities

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Speaker 2: and the authorities in the UK, you need to gear

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Speaker 2: up to understand the differences between the new types of

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Speaker 2: reactors that will be coming forward and respond accordingly. So

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Speaker 2: time is a problem, at cost is a problem, and

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Speaker 2: there's a lot of technological risks. We don't understand which

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Speaker 2: one of these reactors are going to be most sought

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Speaker 2: after by utility customers and by data centers and to

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Speaker 2: produce hydrogen. So there's a lot of opaque in the

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Speaker 2: market right now, and I'm hoping that that can clear

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Speaker 2: and we can make some decisions quickly and move forward

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Speaker 2: for the technology to deploy.

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Speaker 1: And when technology is kind of just getting started and

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Speaker 1: just getting momentum, those first companies that are doing it

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Speaker 1: really under a lot of scrutiny. And sometimes when things

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Speaker 1: don't go very well, they become a canary in the

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Speaker 1: coal mine, and other times they are just the fact

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Speaker 1: that businesses, maybe not every single one makes it along

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Speaker 1: this road to scale. So that then brings me to

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Speaker 1: New Scale. Can you talk a little bit about what

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Speaker 1: happened at New Scale and whether or not this is

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Speaker 1: something that is teaching lessons to other part of the

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Speaker 1: market or is it just isolated to that specific company.

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Speaker 2: So and your Scale is developing a seventy seven megawatt

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Speaker 2: reactor and they intend to bundle two four six of them,

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Speaker 2: possibly twelve of them together to fulfill the demand requirements

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Speaker 2: from their customer. And what their approach is is to

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Speaker 2: have these individual reactors sitting in a pool of water,

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Speaker 2: six story swimming pool if you can imagine, and that

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Speaker 2: requires a lot of physical concrete excavation of the ground

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Speaker 2: and whatever. So they tried to simplify the approach by

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Speaker 2: manufacturing these these reactors in an assembly line and to

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Speaker 2: produce them simply and get them across because the smaller

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Speaker 2: the reactor is, the broader the amount of companies that

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Speaker 2: can manufacture these technologies. But in doing so they also created,

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Speaker 2: you know, a law of unforeseen circumstances where there is

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Speaker 2: a problem now that you need to dig deep into

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Speaker 2: the ground to keep this reactor swimming pool. Into encase,

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Speaker 2: these these six to twelve reactors underground, and so you

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Speaker 2: now have an excavation course that some of the other

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Speaker 2: reactors do not have. So apparently the cost of doing

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Speaker 2: so in Idaho was prohibitive, and there were some unique

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Speaker 2: circumstances that existed at Idaho where the site was proposed

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Speaker 2: that made them sort of raise the cost for building

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Speaker 2: producing the reactor. Secondly, the customer was UAMS. UAMS is

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Speaker 2: an association of fifty or so municipal utilities, and they

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Speaker 2: didn't have any historic experience operating nuclear power plants. It

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Speaker 2: would have been much easier had you had a Duke

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Speaker 2: Energy or a Southern Company or Dominion, which are large

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Speaker 2: nuclear operators in the US. They could have better understand

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Speaker 2: some of the challenges that would have existed in building

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Speaker 2: a first of a kind reactor in a remote place.

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Speaker 2: And so the customer was perhaps ill prepared for the

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Speaker 2: complexities of building and operating a nuclear power plant, and

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Speaker 2: they threw a lot of money the Department of Energy,

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Speaker 2: and there was nobody else around the town. New Scale

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Speaker 2: was the only company that has gotten an NRC license

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Speaker 2: to date, and so we were hoping that this would

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Speaker 2: be leading the way and that they would have some

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Speaker 2: sort of success in developing that. So a combination of

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Speaker 2: technology that perhaps was not really thought out as well

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Speaker 2: as that should have been for that particular location, a

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Speaker 2: customer that didn't have the expertise that some of the

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Speaker 2: other larger utilities could have provided and could have foreseen

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Speaker 2: some of the issues and cut them off at the pass.

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Speaker 2: And the fact that you had one company going forward

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Speaker 2: that had a lot of US government support, and perhaps

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Speaker 2: there were some questions and issues over there. The New

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Speaker 2: Scale technology represents an incremental move forward. The innovation was

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Speaker 2: a shrinkage in size, and it did not provide some

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Speaker 2: of the other advantages that say, a fast reactor or

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Speaker 2: a high temperature gas reactor would have provided. And it

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Speaker 2: turned out to be more complicated and more expensive than

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Speaker 2: people had anticipated.

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Speaker 1: But not wholly uncommon when we think about new technology

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Speaker 1: of any kind. And I know you know the stakes

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Speaker 1: are high with nuclear, but when you're thinking about implementing

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Speaker 1: new technology, there are going to be some implementation hiccups.

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Speaker 1: Do you think that this, because the stakes are so high,

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Speaker 1: is going to cause problems for the wider industry for

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Speaker 1: us or will it just be that this particular thing

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Speaker 1: has been difficult and maybe the next one will be

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Speaker 1: less difficult.

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Speaker 2: Well, we asked New Scale those questions, and they were

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Speaker 2: very quick to point out that the site characteristics and

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Speaker 2: the individual circumstances of the Carbon Free project, which was

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Speaker 2: the name of the project, were unique. And New Scale

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Speaker 2: has been pretty aggressive and developing other data center applications

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Speaker 2: forwards technology, and some of the competitors to New Scale

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Speaker 2: a whole tech or a terror power or whatever. They

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Speaker 2: are all very quick to distinguish the differences between their

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Speaker 2: approach and their technology and what went wrong at the

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Speaker 2: Carbon Free project. So there's hope that there will be

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Speaker 2: additional pathways or new pathways that these other companies can

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Speaker 2: run down and succeed. And I hope that's the case.

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Speaker 1: So let's talk a second about enriched uranium and what's

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Speaker 1: been happening on that side. Last time we had you

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Speaker 1: on this show, I asked you whether or not there

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Speaker 1: was enough uranium in the world for are current and

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Speaker 1: future nuclear plans, and there was a resounding yes. But

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Speaker 1: from the enrichment side, we've actually seen enriched uranium fluctuating

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Speaker 1: prices this year. We've seen prices go up. Can you

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Speaker 1: talk a little bit about what has caused that and

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Speaker 1: really what's going to happen on the price side when

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Speaker 1: it comes to enriched uranium.

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Speaker 2: Okay, so from the price of uranium, uranium is traded

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Speaker 2: in the form of yellowcake U three eight, and there

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Speaker 2: is uranium is traded in the spot market, which utilities

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Speaker 2: and minors can sort of negotiate sell on a short

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Speaker 2: term basis. But what's really really important is the term market.

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Speaker 2: The term market is long term pricing contracts because utilities

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Speaker 2: understand that what's really important is not so much the

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Speaker 2: price of the uranium, but the availability of the uranium.

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Speaker 2: Nuclear utility does not want to not have uranium to operate,

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Speaker 2: so it's must of concern for the price than it

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Speaker 2: is for the availability. Availability is very, very important, and

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Speaker 2: we've seen the price of uranium double in twenty twenty three,

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Speaker 2: and there has been a set of hive around one

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Speaker 2: hundred and six earlier this year, sometime in February. It's

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Speaker 2: retreated a little bit about out since then, but there's

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Speaker 2: been in the news a lot because of the fact

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Speaker 2: that enriched uranium. Uranium comes out of the ground at

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Speaker 2: points zero seven percent uranium two thirty five, which is

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Speaker 2: the fissile part of the atom, which is unstable, as

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Speaker 2: opposed to uranium two thirty eight, which is the more

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Speaker 2: stable fertile part of the atom. And so you enriched

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Speaker 2: the natural uranium from points zero seven percent in its

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Speaker 2: natural state up to four and a half percent for

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Speaker 2: suitable use for a nuclear power plant. If you are

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Speaker 2: having an advanced reactor, you'll want to go ahead and

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Speaker 2: push that uranium up to say nineteen and a half

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Speaker 2: twenty percent or somewhere in between, and that's called HALU.

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Speaker 2: Highest say low enriched uranium and I say loan rich uranium.

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Speaker 2: The only commercial source for that in the world these

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Speaker 2: days are the Russians, and it's a very expensive process.

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Speaker 2: You just don't all of a sudden decide well, I

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Speaker 2: want to go ahead increase my uranium levels enrichment levels

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Speaker 2: from four and a half percent up to twenty percent,

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Speaker 2: because you have to go through a lot of regulatory

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Speaker 2: and licensing steps in order to do that. So it's

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Speaker 2: pretty expensive proposition. And also another problem is that there's

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Speaker 2: an uncertainty of demand. You have ten to twelve companies

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Speaker 2: in the US, as an example, that are going through

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Speaker 2: the licensing process or discussions with the NRC. We're not

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Speaker 2: sure how many of them will go through and whether

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Speaker 2: or not those companies that do go through the process

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Speaker 2: will actually deliver a commercial product that will have a

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Speaker 2: demand for uranium. So it's like a chicken and egg

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Speaker 2: situation as far as HALU demand is concerned. Now, the

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Speaker 2: US government has stepped in and made a lot of

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Speaker 2: incentives recently to sort of support a domestic uranium industry

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Speaker 2: laws left and right. Most recently earlier this week, there's

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Speaker 2: executive order from the President of Biden that he's going

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Speaker 2: to try to support large reactors, which I think is

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Speaker 2: a surprising development. He's also going to support the deployment

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Speaker 2: of advanced reactors on military basis, and he's also providing

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Speaker 2: a lot of support to the uranium industry to create

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Speaker 2: and strengthen the uranium industry in the US. The uranium

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Speaker 2: we used to produce a lot of uranium in this

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Speaker 2: country and then for environmental reasons and for the fact

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Speaker 2: that nuclear fill out of favor in the wake of Fukushima,

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Speaker 2: you know, our production has gone down to next to nothing.

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Speaker 2: Now we're starting to produce more and more uranium. But

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Speaker 2: we have only one facility in the US that can

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Speaker 2: make highes say loan rich uranium, and that's Centrist and

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Speaker 2: that company is just gearing up and looking to try

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Speaker 2: to expand its operations and hopefully with support from the

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Speaker 2: US government, financing will flow to the construction of a

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Speaker 2: larger facility with which they'll be able to provide commercial

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Speaker 2: amounts of HALO for the US industry and other markets globally.

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Speaker 1: So if the Biden administration, during an election year, has

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Speaker 1: announced that they want to see more uranium enrichment and

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Speaker 1: more large nuclear plans. What I want to understand is

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Speaker 1: really what underlies that. Is it domestic security of energy

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Speaker 1: supply and invariably this is a country that exports natural gas,

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Speaker 1: or is it a big job creator? And are we

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Speaker 1: talking about jobs here something else that maybe I'm not

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Speaker 1: getting well.

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Speaker 2: Jobs has been one of the big highlights of the

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Speaker 2: nuclear power industry. One of the reasons that I believe

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Speaker 2: that they went forward with the Hinckley project because it's

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Speaker 2: not an expensive electricity, but it was twenty five thousand jobs.

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Speaker 2: So the decision was made by politicians years ago to

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Speaker 2: build this facility because I'll put twenty five thousand people

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Speaker 2: to work and would produce a tremendous amount of electricity,

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Speaker 2: and it would be domestically produced electricity, carbon free electricity.

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Speaker 2: So there was a lot of reasons for going ahead

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Speaker 2: with that decision, aside from producing the least expensive election electricity.

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Speaker 2: And so that's a big driver for nuclear power is

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Speaker 2: the fact that it keeps people at work, and it

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Speaker 2: provides energy security, and it's also carbon free, and it's

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Speaker 2: a good balance and a good complement to the increasing

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Speaker 2: amount of renewables that are being deployed. So I think people,

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Speaker 2: I think erroneously look at nuclear as a competitor to renewables.

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Speaker 2: I look at nuclear as a complement to renewables, and

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Speaker 2: that you have renewables as a preferred option, and you

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Speaker 2: have a complementary source that's baseload that's available twenty four

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Speaker 2: hours a day that can sort of complement and enable

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Speaker 2: the growth of carbon free energy, especially renewables. And we

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Speaker 2: see data centers entering the picture right now. Data centers

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Speaker 2: have a requirement for twenty four to seven clean energy

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Speaker 2: and that can be best supplied with nuclear power.

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Speaker 1: So essentially the US's solution to enriched uranium is to

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Speaker 1: do it domestically.

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Speaker 2: Yes, there's Urinko is another supplier of enriched uranium. They

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Speaker 2: have operations in Europe and they have an operation in

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Speaker 2: New Mexico. But I think that Russians we're providing a

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Speaker 2: pretty substantial chunk, about twenty seven percent of the enrich

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Speaker 2: uranium to the US, and that's something that needs to

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Speaker 2: be changed from a political perspective, and also it's a

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Speaker 2: very very helpful, healthy thing for the US to go ahead,

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Speaker 2: and because we are the largest market for uranium in

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Speaker 2: the world with ninety four reactors operating. The other closest

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Speaker 2: country is France and China, which have you know, just

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Speaker 2: over fifty.

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Speaker 1: You had mentioned twenty four to seven clean power, and

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Speaker 1: the question I have for you is can you give

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Speaker 1: me some examples of where those projects are kind of

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Speaker 1: the companies that are looking at those sorts of projects

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Speaker 1: And additionally, you know, are they including nuclear in this

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Speaker 1: or when they're seeing twenty four seven clean power, they

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Speaker 1: trying to figure out how to do it with renewables only.

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Speaker 2: I think that if you look at all of the

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Speaker 2: press releases that are coming out from some of these

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Speaker 2: advanced reacted to companies SMR developers, they're all talking about

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Speaker 2: the big opportunities from data centers, new scale being one,

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Speaker 2: oklow being another one. And so this is a very

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Speaker 2: very important thing. Microsoft operates a huge fleet of data

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Speaker 2: centers and they've signed a contract with a fusion company, Helion,

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Speaker 2: to provide electricity for that data center by twenty twenty eight.

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Speaker 2: And so there's a lot of interest from data centers

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Speaker 2: to sort of gear up and have carbon free power,

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Speaker 2: which reliable, secure and affordable because what will happen is

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Speaker 2: that the data centers will contract directly with these nuclear

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Speaker 2: operations and sort of bypass the retail and wholesale rates

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Speaker 2: that they would have to pay by buying that electricity

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Speaker 2: from the grid. So we're seeing situations where nuclear power

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Speaker 2: plans are signing power purchase agreements with data centers to

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Speaker 2: directly supply them.

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Speaker 1: So we had talked about the new projects that the

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Speaker 1: Biden administration is encouraging and then commitment to cop to

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Speaker 1: trouble nuclear capacity and new technology, But what about the

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Speaker 1: existing technology that's already online. In this post Fukushima way,

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Speaker 1: we saw a number of those getting retired. Have the

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Speaker 1: retirements stopped?

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Speaker 2: I think that the era of nuclear retirements is behind us.

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Speaker 2: It's now very politically unacceptable to close down a nuclear

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Speaker 2: power plant which is carbon free for a variety of

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Speaker 2: different reasons. In the US, most of the nuclear power

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Speaker 2: plants were closed down because they were uncompetitive with chief

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Speaker 2: natural gas. And we're seeing for the first time in

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Speaker 2: the US, if not the world, where a nuclear power

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Speaker 2: plant that was closed because I couldn't compete with cheap

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Speaker 2: natural gas is now being supported by the US government

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Speaker 2: and the state government of Michigan to bring it back online,

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Speaker 2: and that's a very very significant thing. And the Biden

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Speaker 2: administration is also talking perhaps about other nuclear power plants

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Speaker 2: that have been closed in an era a very cheap

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Speaker 2: natural gas to try to bring them back online, and

439
00:25:03,840 --> 00:25:06,760
Speaker 2: that's something that would be of great interest. It's part

440
00:25:06,760 --> 00:25:11,000
Speaker 2: of a triative strategy to keep the existing fleet operating longer,

441
00:25:11,119 --> 00:25:13,840
Speaker 2: to expand the capacity of the existing fleet, to bring

442
00:25:13,920 --> 00:25:16,440
Speaker 2: back some reactors that have closed. I don't know how

443
00:25:16,440 --> 00:25:19,040
Speaker 2: successful and to what extent that will be, And to

444
00:25:19,160 --> 00:25:23,400
Speaker 2: build advanced reactors in this country and in the US market,

445
00:25:23,480 --> 00:25:26,879
Speaker 2: I really question the wisdom about building large reactors because

446
00:25:26,960 --> 00:25:31,480
Speaker 2: large reactors take ten years to build, they're very, very expensive,

447
00:25:31,640 --> 00:25:35,600
Speaker 2: and the decision process of a utility is such that

448
00:25:36,000 --> 00:25:40,080
Speaker 2: the CEOs typically last five to six seven years at

449
00:25:40,160 --> 00:25:45,480
Speaker 2: a leadership position. So CEO who starts initiates a project

450
00:25:45,480 --> 00:25:47,520
Speaker 2: to go ahead and build a nuclear actor will not

451
00:25:47,640 --> 00:25:50,400
Speaker 2: be there when it finally comes online. And so there's

452
00:25:50,440 --> 00:25:52,920
Speaker 2: a lot of risk and a lot of cost overrun

453
00:25:52,960 --> 00:25:55,520
Speaker 2: and time scheduling, and it takes a very long time

454
00:25:55,560 --> 00:25:58,159
Speaker 2: to build these reactors, and I think that poses a

455
00:25:58,359 --> 00:26:01,600
Speaker 2: huge amount of risk for you toies what distinguishes the

456
00:26:01,720 --> 00:26:05,760
Speaker 2: nuclear power industry from the other renewable industries is that

457
00:26:06,240 --> 00:26:10,560
Speaker 2: policy decisions are less effective than market pull to get

458
00:26:10,640 --> 00:26:13,480
Speaker 2: nuclear power plants built. So you can have all the

459
00:26:13,520 --> 00:26:15,840
Speaker 2: policy in the world, but you really need to have

460
00:26:15,880 --> 00:26:18,920
Speaker 2: a utility say hey, I really need this twenty four

461
00:26:18,920 --> 00:26:21,800
Speaker 2: to seven carbon free energy, and I'm willing to spend

462
00:26:21,800 --> 00:26:23,560
Speaker 2: a lot of money to go ahead and get that,

463
00:26:23,840 --> 00:26:27,560
Speaker 2: and the cost of doing so and the time frames

464
00:26:27,560 --> 00:26:30,320
Speaker 2: for doing so are so prohibitive in the United States

465
00:26:30,560 --> 00:26:33,480
Speaker 2: that I suggest that the solution will be for advanced

466
00:26:33,520 --> 00:26:38,960
Speaker 2: reactors which are smaller, provide less capital risk, in fact,

467
00:26:39,080 --> 00:26:41,560
Speaker 2: they costs. They're smaller, they cost less, and that they

468
00:26:41,600 --> 00:26:44,200
Speaker 2: can build in a shorter period of time, and they

469
00:26:44,320 --> 00:26:47,560
Speaker 2: sort of become more acceptable to the decision makers out

470
00:26:47,560 --> 00:26:49,639
Speaker 2: of utility or are an operator of a lot of

471
00:26:49,760 --> 00:26:54,320
Speaker 2: data centers to chase after smaller nuclear reactors as opposed

472
00:26:54,359 --> 00:26:56,280
Speaker 2: to large reactors which can take forever.

473
00:26:56,840 --> 00:27:01,280
Speaker 1: So we know that nuclear is now providing flexibility, it's

474
00:27:01,320 --> 00:27:03,440
Speaker 1: carbon free, it has a role to play in twenty

475
00:27:03,440 --> 00:27:05,760
Speaker 1: four to seven clean power. And you had mentioned earlier

476
00:27:05,840 --> 00:27:07,879
Speaker 1: that China was one of the countries that was looking

477
00:27:07,920 --> 00:27:11,080
Speaker 1: at installing more on the small modular side. Is there

478
00:27:11,119 --> 00:27:13,760
Speaker 1: a parallel and can I essentially be hopeful that costs

479
00:27:13,800 --> 00:27:15,919
Speaker 1: are going to come down, not just for the smaller

480
00:27:15,920 --> 00:27:19,280
Speaker 1: reactors because they're smaller therefore less expensive, but are we

481
00:27:19,320 --> 00:27:21,280
Speaker 1: going to see cost of clients, because when I think

482
00:27:21,280 --> 00:27:25,960
Speaker 1: about what's happened with China and solar manufacturing and battery manufacturing,

483
00:27:26,080 --> 00:27:30,280
Speaker 1: we have seen prices drop precipitously when they have entered

484
00:27:30,280 --> 00:27:33,640
Speaker 1: a market really at scale. Are we going to see

485
00:27:33,640 --> 00:27:34,240
Speaker 1: the same thing.

486
00:27:34,119 --> 00:27:38,240
Speaker 2: In nuclear There's a fundamental difference between the US market

487
00:27:38,320 --> 00:27:41,800
Speaker 2: for nuclear power plants and the Chinese market for nuclear

488
00:27:41,840 --> 00:27:45,240
Speaker 2: power plants, and the two significant differences. One is that

489
00:27:45,440 --> 00:27:48,879
Speaker 2: in the US, we are greening the electrical grid. In

490
00:27:49,000 --> 00:27:52,640
Speaker 2: China they're expanding the electrical grid in a much faster way.

491
00:27:52,720 --> 00:27:57,200
Speaker 2: So large reactors become very very appropriate. If you're expanding

492
00:27:57,240 --> 00:27:59,879
Speaker 2: the size of your generating capacity, We're going to do

493
00:27:59,920 --> 00:28:03,440
Speaker 2: that in a smaller way than the Chinese are doing.

494
00:28:03,720 --> 00:28:05,600
Speaker 2: We have a lot of coal plants that we need

495
00:28:05,680 --> 00:28:08,280
Speaker 2: to retire. So if you're retiring coal plants that are

496
00:28:08,280 --> 00:28:11,400
Speaker 2: four or five hundred megawatts, typically you want to have

497
00:28:11,480 --> 00:28:15,000
Speaker 2: them replaced by smaller mountor reactors that are closer in

498
00:28:15,080 --> 00:28:19,720
Speaker 2: size to what you're gearing down. And another most significant

499
00:28:19,720 --> 00:28:23,280
Speaker 2: distinction between the Chinese market and the US market is

500
00:28:23,280 --> 00:28:27,000
Speaker 2: that Chinese, because they have such experience building large nuclear

501
00:28:27,000 --> 00:28:29,280
Speaker 2: power plants, they're very good at it, and they can

502
00:28:29,320 --> 00:28:33,159
Speaker 2: produce and the cost of building a nuclear power plant

503
00:28:33,280 --> 00:28:35,760
Speaker 2: is probably one quarter in China as it is in

504
00:28:35,800 --> 00:28:38,520
Speaker 2: the US based on the data we have collected, So

505
00:28:38,680 --> 00:28:40,480
Speaker 2: it makes a lot of sense for the Chinese to

506
00:28:40,560 --> 00:28:43,960
Speaker 2: go ahead and build large reactors. They'll put six reactors

507
00:28:43,960 --> 00:28:46,840
Speaker 2: at one site and they'll do them sequentially, so it's

508
00:28:46,840 --> 00:28:50,520
Speaker 2: a very very cost effective way of manufacturing and producing

509
00:28:50,920 --> 00:28:53,920
Speaker 2: large reactors. So I see China being a leader in

510
00:28:55,120 --> 00:28:58,320
Speaker 2: large reactive development for a while, even though they're starting

511
00:28:58,360 --> 00:29:01,960
Speaker 2: to develop their own small react the technologies potentially for

512
00:29:02,040 --> 00:29:05,760
Speaker 2: export and for smaller remote areas, and they're ahead of

513
00:29:05,760 --> 00:29:08,160
Speaker 2: the US in doing so.

514
00:29:08,240 --> 00:29:11,720
Speaker 1: Already, you've already discussed that the US is getting back

515
00:29:11,760 --> 00:29:14,520
Speaker 1: into the game here and that China's looking at it.

516
00:29:14,600 --> 00:29:18,720
Speaker 1: And then historically Russia has been focused on nuclear power

517
00:29:18,760 --> 00:29:21,880
Speaker 1: as well. The Middle East is potential growth area. Can

518
00:29:21,920 --> 00:29:23,880
Speaker 1: we talk a little bit about some of the dynamics

519
00:29:23,920 --> 00:29:25,680
Speaker 1: there and why that might be taking place.

520
00:29:26,080 --> 00:29:30,520
Speaker 2: The UAE signed a lot of agreements with US advanced

521
00:29:30,560 --> 00:29:34,200
Speaker 2: reactor companies, which I think is very very encouraging because

522
00:29:34,280 --> 00:29:37,000
Speaker 2: they can provide a source of capital and they can

523
00:29:37,040 --> 00:29:41,000
Speaker 2: provide access to local markets in the region. One of

524
00:29:41,040 --> 00:29:44,600
Speaker 2: the things that a very markedly difference between the market

525
00:29:44,800 --> 00:29:47,960
Speaker 2: for electricity in the Middle East as opposed to the

526
00:29:48,080 --> 00:29:51,840
Speaker 2: US is that the demand for electricity in August is

527
00:29:51,840 --> 00:29:55,600
Speaker 2: typically twice what the demand is for electricity in December

528
00:29:55,680 --> 00:29:58,400
Speaker 2: because of the huge air conditioned load. So what you

529
00:29:58,520 --> 00:30:00,960
Speaker 2: end up doing is you try to apply your peak

530
00:30:01,000 --> 00:30:04,480
Speaker 2: demand and you have all this excess capacity. So we've

531
00:30:04,520 --> 00:30:08,239
Speaker 2: had conversations with prospects in the Middle East who are

532
00:30:08,280 --> 00:30:11,239
Speaker 2: looking to develop nuclear power in order to sort of

533
00:30:11,280 --> 00:30:15,280
Speaker 2: provide that peak demand, and then they can use when

534
00:30:15,280 --> 00:30:20,080
Speaker 2: there's less demand for electricity, switch the energy to desalidating

535
00:30:20,120 --> 00:30:23,040
Speaker 2: water and also to producing hydrogen. And that's not a

536
00:30:23,120 --> 00:30:26,240
Speaker 2: very very effective way of not one hundred percent utilizing

537
00:30:26,280 --> 00:30:30,000
Speaker 2: your electrolyizer, but it's very easy to store water. So

538
00:30:30,200 --> 00:30:34,000
Speaker 2: you can have these nuclear power plants switching to desoalidating

539
00:30:34,120 --> 00:30:38,000
Speaker 2: water or producing hydrogen, and that makes a lot of sense,

540
00:30:38,120 --> 00:30:40,360
Speaker 2: and we see a lot of interest in the region.

541
00:30:40,640 --> 00:30:43,800
Speaker 2: We see also a lot of growth in nuclear power

542
00:30:44,080 --> 00:30:47,040
Speaker 2: where you have Turkey and Egypt are both building for

543
00:30:47,320 --> 00:30:50,720
Speaker 2: large nuclear power plants. The UAE has just completed for

544
00:30:51,200 --> 00:30:54,720
Speaker 2: large nuclear power plants and it's talking about a second

545
00:30:55,120 --> 00:30:58,160
Speaker 2: large plant over there. And also Saudi Arabia has been

546
00:30:58,200 --> 00:31:01,240
Speaker 2: toying with building nuclear power plant for a lot of years,

547
00:31:01,760 --> 00:31:05,520
Speaker 2: and they are at one time we're considering seventeen nuclear

548
00:31:05,560 --> 00:31:08,000
Speaker 2: power plants. Now it's down to two or so. But

549
00:31:08,200 --> 00:31:11,440
Speaker 2: there's a lot of a lot of issues and a

550
00:31:11,520 --> 00:31:15,720
Speaker 2: lot of opportunity to provide some carbon free generation over there,

551
00:31:15,800 --> 00:31:19,080
Speaker 2: to sort of have them stop burning oil for their

552
00:31:19,520 --> 00:31:23,200
Speaker 2: power generation needs. So the Middle East and other parts

553
00:31:23,240 --> 00:31:27,120
Speaker 2: of Africa can be very very interesting prospects for the

554
00:31:27,240 --> 00:31:28,880
Speaker 2: right type of nuclear technology.

555
00:31:29,400 --> 00:31:34,240
Speaker 1: One of the potential use cases for nuclear is for hydrogen. So,

556
00:31:34,920 --> 00:31:37,760
Speaker 1: as we know from the show, you make hydrogen from

557
00:31:37,960 --> 00:31:41,320
Speaker 1: other sources of energy and then use it for perhaps

558
00:31:41,320 --> 00:31:44,440
Speaker 1: hard debate space and various things that are more difficult

559
00:31:44,440 --> 00:31:48,479
Speaker 1: to decarbonize, like cement or steel or aluminum. Can you

560
00:31:48,520 --> 00:31:52,120
Speaker 1: talk about some of the advantages of using nuclear as

561
00:31:52,160 --> 00:31:54,960
Speaker 1: the energy source for hydrogen.

562
00:31:54,920 --> 00:31:58,600
Speaker 2: There are plans in the US to develop nuclear powered

563
00:31:58,720 --> 00:32:03,440
Speaker 2: hydrogen hubs, and there is a big distinction between producing

564
00:32:03,960 --> 00:32:07,720
Speaker 2: hydrogen from nuclear power as proposed to producing hydrogen from

565
00:32:07,720 --> 00:32:14,520
Speaker 2: renewables and the fact that you can use solid oxide electrilizers, soees,

566
00:32:14,960 --> 00:32:19,360
Speaker 2: and these things take effect electrilyizing steam as opposed to

567
00:32:19,360 --> 00:32:23,640
Speaker 2: electrializing water. And so the thermal energy available from a

568
00:32:23,720 --> 00:32:27,240
Speaker 2: nuclear power plant combined with electrical energy from a nuclear

569
00:32:27,240 --> 00:32:30,960
Speaker 2: power plant gives the cost give a certain cost advantage

570
00:32:31,040 --> 00:32:35,040
Speaker 2: to producing hydrogen from nuclear power as opposed to producing

571
00:32:35,280 --> 00:32:39,160
Speaker 2: hydrogen from renewables, And that's something that is being looked at,

572
00:32:39,320 --> 00:32:43,280
Speaker 2: and whether or not it's actually true is perhaps something

573
00:32:43,280 --> 00:32:46,960
Speaker 2: that needs further exploration. I know in Poland Rolls Royce

574
00:32:47,040 --> 00:32:50,200
Speaker 2: is talking to a company called Industria and they're thinking

575
00:32:50,240 --> 00:32:55,800
Speaker 2: about developing nuclear and hydrogen projects in the country, but

576
00:32:55,880 --> 00:32:58,080
Speaker 2: the timeframe for that is not going to be until

577
00:32:58,280 --> 00:33:01,080
Speaker 2: mid to early twenty thirties.

578
00:33:01,560 --> 00:33:03,600
Speaker 1: Now, a girl's got a dream when it comes to

579
00:33:03,880 --> 00:33:08,239
Speaker 1: thinking about technology breakthroughs that could really fundamentally change the

580
00:33:08,280 --> 00:33:11,760
Speaker 1: economics and therefore missions of the energy industry. Can you

581
00:33:11,840 --> 00:33:14,160
Speaker 1: tell me a bit about how close we are getting

582
00:33:14,240 --> 00:33:15,440
Speaker 1: on fusion.

583
00:33:15,880 --> 00:33:19,959
Speaker 2: Fusion is a great topic. It's received about six billion

584
00:33:20,000 --> 00:33:23,080
Speaker 2: dollars in private investment in the last several years, and

585
00:33:23,160 --> 00:33:26,760
Speaker 2: there are several companies in the UK, in the US

586
00:33:26,800 --> 00:33:29,440
Speaker 2: and Asia who are really pushing forward to sort of

587
00:33:29,440 --> 00:33:33,800
Speaker 2: commercialize this technology. I have visited six or seven different

588
00:33:33,840 --> 00:33:37,760
Speaker 2: fusion companies in Europe, in the UK, and in the US,

589
00:33:37,960 --> 00:33:40,720
Speaker 2: and I'm very impressed by what I see. One has

590
00:33:40,760 --> 00:33:44,080
Speaker 2: to understand that what has enabled this rapid increase in

591
00:33:44,240 --> 00:33:47,840
Speaker 2: interest in fusion, and it boils down to several things.

592
00:33:48,080 --> 00:33:51,680
Speaker 2: The tools that the engineers and scientists need to produce

593
00:33:51,760 --> 00:33:55,440
Speaker 2: fusion devices have suddenly become much more readily available, and

594
00:33:55,480 --> 00:34:00,640
Speaker 2: they include supercomputing, three D printing, advanced material and high

595
00:34:00,880 --> 00:34:05,560
Speaker 2: temperatures some conductor magnets. So the available of these four

596
00:34:05,640 --> 00:34:08,920
Speaker 2: things coming together all of a sudden gives these brilliant

597
00:34:08,960 --> 00:34:12,440
Speaker 2: people the tools with which to go ahead and miniaturize

598
00:34:12,520 --> 00:34:15,759
Speaker 2: fusion devices and to make them much more efficient. And

599
00:34:15,880 --> 00:34:18,480
Speaker 2: as a result of that, we have progress made and

600
00:34:18,560 --> 00:34:22,960
Speaker 2: several different continents to recognize the potential and realize the

601
00:34:22,960 --> 00:34:25,839
Speaker 2: potential of fusion. So we're very, very hopeful that we'll

602
00:34:25,880 --> 00:34:29,759
Speaker 2: see some additional announcements in twenty twenty five that will

603
00:34:29,800 --> 00:34:33,680
Speaker 2: sort of introduce a second wave of enthusiasm for fusion.

604
00:34:33,880 --> 00:34:37,480
Speaker 2: Several companies took a billion dollars two billion dollars in

605
00:34:37,480 --> 00:34:40,680
Speaker 2: one case of Commonwealth fusion in twenty twenty two, I believe,

606
00:34:40,880 --> 00:34:45,080
Speaker 2: and so they're now investing that money and producing prototypes

607
00:34:45,080 --> 00:34:48,880
Speaker 2: which will hopefully produce net energy gain. And when that happens,

608
00:34:48,920 --> 00:34:52,920
Speaker 2: then I expect we'll see another influx of capital that

609
00:34:53,040 --> 00:34:55,480
Speaker 2: will be able to sort of lead to the commercialation

610
00:34:55,640 --> 00:34:58,920
Speaker 2: of fusion devices, hopefully by the end of the decade.

611
00:34:59,080 --> 00:35:01,680
Speaker 1: So there's good reason to be hopeful. Chris, thank you

612
00:35:01,719 --> 00:35:04,160
Speaker 1: so much for joining today and forgiving it's an update

613
00:35:04,200 --> 00:35:05,680
Speaker 1: on what's happening in nuclear.

614
00:35:05,760 --> 00:35:07,160
Speaker 2: My pleasure always. Thank you.

615
00:35:16,280 --> 00:35:19,399
Speaker 1: Today's episode of Switched On was produced by Cam Gray

616
00:35:19,640 --> 00:35:23,279
Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a

617
00:35:23,320 --> 00:35:26,440
Speaker 1: service provided by Bloomberg Finance LP and its affiliates. This

618
00:35:26,560 --> 00:35:29,239
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619
00:35:29,280 --> 00:35:33,200
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620
00:35:33,239 --> 00:35:36,400
Speaker 1: investment or other strategy. Bloomberg ANIF should not be considered

621
00:35:36,440 --> 00:35:39,760
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622
00:35:39,840 --> 00:35:42,839
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623
00:35:42,840 --> 00:35:46,600
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00:35:46,600 --> 00:35:49,600
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625
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