Speaker 1: This is Dana Perkins and you're listening to Switched on
Speaker 1: the BNAF podcast. Today we talk about nuclear energy. It's
Speaker 1: really fallen out of fashion over the last decade with
Speaker 1: retirements taking place all over the world, but recently countries
Speaker 1: are starting to make noises again about this proven low
Speaker 1: carbon technology and the question is really is it back Well,
Speaker 1: it all depends on whether or not words become action.
Speaker 1: At COP twenty eight in Dubai. At the end of
Speaker 1: last year, twenty five nations committed to tripling global nuclear
Speaker 1: capacity by twenty fifty. So how might that take shape?
Speaker 1: Will they be reopening shutter nuclear facilities or building new ones,
Speaker 1: and if they are new, will the new ones be
Speaker 1: small modular reactors? And does the recent spike in the
Speaker 1: price of enriched uranium dampen that outlook? So today we
Speaker 1: feature our b and EF resident nuclear expert, Kris Kodomski,
Speaker 1: and he shares some of the findings from the most
Speaker 1: recently published Nuclear Market Outlook. As a quick reminder, give
Speaker 1: us a review if you want to help other people
Speaker 1: find us and subscribe if you want to help yourself
Speaker 1: find future shows as they're published. But right now, let's
Speaker 1: talk about nuclear's potential for a comeback story with Chris Kadomski. Chris,
Speaker 1: welcome back to the show. Well, thank you, we're here
Speaker 1: to talk about nuclear what else? And well we've had
Speaker 1: you on the show before. You give us an update
Speaker 1: on what's happening in this space. Post Fukushima. There were
Speaker 1: a lot of retirements of nuclear power plans. Plenty of countries,
Speaker 1: including Japan, including Germany, really backed away from it. And
Speaker 1: I would say the temperature in the room got a
Speaker 1: bit cold for nuclear. But now I want to know
Speaker 1: what would you say the temperature in the room is
Speaker 1: is nuclear? Is it back? Is it coming back?
Speaker 2: Well, one of the younger analysts that BF came up
Speaker 2: to me and said that nuclear energy, specifically SMR small
Speaker 2: module reactors, is trending now. And I was very very
Speaker 2: happy to hear that. It certainly is trending when you
Speaker 2: look at say the media coverage and interest from politicians
Speaker 2: and interest from environmental groups and goos or so, it
Speaker 2: certainly is trending. But being a cheerleader for nuclear power
Speaker 2: does not necessarily translate to an actual build out and
Speaker 2: rapid expansion of nuclear power, which we would all sort
Speaker 2: of hope would happen for us to go ahead and
Speaker 2: tackle our net zero aspiration and our climate change goals.
Speaker 1: I mean because in many respects, when you think about
Speaker 1: nuclear as this carbon free source of energy, everything that
Speaker 1: we shut down we've got to backfill with something else,
Speaker 1: and in some cases that's ended up being coal, and
Speaker 1: that certainly is not carbon free. And for everything that
Speaker 1: we shut down, that's something else that it doesn't actually
Speaker 1: get to replace. So the renewables are replacing then the
Speaker 1: nuclear instead of other high carbon parts of the economy.
Speaker 1: So it certainly is part of the solution, and let's
Speaker 1: talk a bit about what part of the solution it
Speaker 1: could be in the future. So with small modular let's
Speaker 1: just do a definition for everybody who's listening, how do
Speaker 1: you define small modular reactors?
Speaker 2: Small module actors of which they're about eighty being developed
Speaker 2: around the world, are defined to be somewhat less than
Speaker 2: three hundred megawats electric, but of course there's exemptions to that.
Speaker 2: Or the Rolls Royce reactor is coming in at over
Speaker 2: four hundred and forty megawats a reactor, and so it's
Speaker 2: also I characterize that as being an SMR. So besides
Speaker 2: the size characteristic. We want to look at other aspects
Speaker 2: of the technology. That it's safer, that it's modular, it
Speaker 2: could be manufactured in a factory instead of built on site,
Speaker 2: and that provides a lot of advantages as far as
Speaker 2: getting down the cost learning curve and hoping to produce
Speaker 2: a reactor that is going to be less expensive on
Speaker 2: a per kilowatt basis. There also is extinction that we
Speaker 2: need to sort of make between SMR which are small
Speaker 2: and advanced reactors. Small SMRs are typically characterized by being
Speaker 2: light water reactors, so it's in small innovations. It's a
Speaker 2: small move and the only really innovation is really shrinkages side.
Speaker 2: Maybe there's some additional safety features that they incorporate in
Speaker 2: the post Fukushima environment. There's also something that I characterizes
Speaker 2: advanced reactors that are using different types of technology, new technologies,
Speaker 2: and the example would be the fast reactor that Bill
Speaker 2: Gates is developing with terror power, which neutrons and electrons
Speaker 2: are flying around at a much faster speed. They have
Speaker 2: the ability therefore to sort of consume spent fuel and
Speaker 2: to burn the fuel much more effectively. It's a hedge
Speaker 2: against proliferation and it perhaps deals with the longevity issue
Speaker 2: of spent nuclear fuel. There are also high temperature gas
Speaker 2: reactors which theoretically cannot melt down, and there's molten salt
Speaker 2: reactors where the uranium is already in molten state, very
Speaker 2: very hot. So these are advanced features, more safety and
Speaker 2: suggests that these reactors could be located closer to population
Speaker 2: centers and also without the extensive then and expensive containment
Speaker 2: that typically characterize the large reactors.
Speaker 1: So more safety and certainly a lot of new technology
Speaker 1: that's coming out. So yeah, definitely trending from a news standpoint,
Speaker 1: trending topically, but let's talk about implementation. So where in
Speaker 1: the world have they started working with SMRs.
Speaker 2: For example, there's only two SMRs that operate in the
Speaker 2: world today. One is in Russia north of the Arctic
Speaker 2: Circle that's been operating since twenty nineteen early twenty twenty.
Speaker 2: The other one has been operating for six months in China,
Speaker 2: and it's an advanced reactor, a high temperature gas reactor.
Speaker 2: Both the Russians and the Chinese are working on additional SMRs,
Speaker 2: and there are other places in the world. Argentina has
Speaker 2: been working on an SMR for the last ten years,
Speaker 2: so and with very little progress for political and management
Speaker 2: changes that are going on at the site. And very sadly,
Speaker 2: the US had a leading SMR project that was to
Speaker 2: be built in Idaho at Idaho National Labs, and that
Speaker 2: project fell on its sword last November because they realized
Speaker 2: that the cost of electricity they were delivering to the
Speaker 2: customer ums was going to be too high and they
Speaker 2: mutually agreed to terminate the project. So there are a
Speaker 2: lot of questions about whether SMRs can deliver on the
Speaker 2: promise of providing inexpensive electricity or competitive electricity that makes
Speaker 2: it worthy of consideration by utility customer.
Speaker 1: So now there are a number of countries though, that
Speaker 1: are looking to really ramp up their nuclear capacity, or
Speaker 1: at least that's what they said at COP twenty eight.
Speaker 1: Can you talk a little bit about what those commitments
Speaker 1: were and how much they're looking to increase nuclear on
Speaker 1: their grids.
Speaker 2: So the big news that came out of COP twenty
Speaker 2: eight eight, who was an agreement between twenty five countries
Speaker 2: or so to triple nuclear capacity from about three hundred
Speaker 2: and seventy gigawatts now presently installed around the world to
Speaker 2: over eleven hundred gigawatts by twenty fifty and so that's
Speaker 2: a huge, huge lift. And so the question is that
Speaker 2: was a proclamation by politicians NGOs, and I question whether
Speaker 2: or not the execution can be followed through so that
Speaker 2: we actually go ahead and get there. And if you
Speaker 2: look at the ramp, you know, nuclear capacity around the
Speaker 2: world has been essentially flat since Fukushima. This varies a
Speaker 2: little bit, but if we're going to triple capacity in
Speaker 2: the next say twenty five years twenty six years, we
Speaker 2: really need to step on the gas and start developing things.
Speaker 2: And the world is going to be characterized by different
Speaker 2: technologies in different markets. In the East, where there's a
Speaker 2: tremendous growth in demand for electricity, think China, India, Indonesia, Vietnam,
Speaker 2: large reactors will probably fill role better than small reactors.
Speaker 2: In the West where you have slower growth. Nevertheless, you
Speaker 2: are having a lot of growth from the data centers
Speaker 2: now projected, but they all the SMR technology would be
Speaker 2: used preferably over large reactors for a variety of different reasons.
Speaker 2: And in a market like the UK, UK is relying
Speaker 2: on both large reactors. They're building Hinkley and they're planning
Speaker 2: to build sizeball. But they'll also complement that with smaller reactors.
Speaker 2: And the ideal thing about small reactors that they're more agile,
Speaker 2: quicker to build, allegedly, less expensive to build, less risky
Speaker 2: to build, and they sort of can replace the existing
Speaker 2: coal infrastructure the country like the UK or Poland or
Speaker 2: the US may have. So there's a little niche for
Speaker 2: these SMRs to sort of replace coal and act as
Speaker 2: a compliment to renewables. What's happening now, renewables is growing
Speaker 2: like crazy, and as renewables grow, we need to add
Speaker 2: natural gas capacity for the backup stand by a power
Speaker 2: for when the wind is and blow or the sun
Speaker 2: doesn't shine. We need to replace those natural guess capacity
Speaker 2: with small SMRs that are agile enough to ramp up
Speaker 2: to rapidly changing conditions and demand for electricity on the grid.
Speaker 1: Now, I know it's been less than a year since
Speaker 1: the last COP so these twenty five countries or so
Speaker 1: haven't had a chance to actually really well build any
Speaker 1: of these new projects. But does it look like what
Speaker 1: are they making noises about potentially doing? Is it going
Speaker 1: to be really varied all over the world? Are they
Speaker 1: waiting for new technology? And you think they're going to
Speaker 1: essentially say we're going to do this a little bit
Speaker 1: closer to twenty fifty or some countries really getting started
Speaker 1: right now.
Speaker 2: Well, we've been tracking the development of SMRs and the
Speaker 2: prognosis is not very very exciting as far as how
Speaker 2: quickly they can be deployed. You know, there's twelve reactors
Speaker 2: or ten reactors in the US that are undergoing pre
Speaker 2: application feasibility studies or negotiations with the Nuclear Regulatory Commission,
Speaker 2: and after they complete those pre application studies, the next
Speaker 2: step will be for them to go ahead and formally
Speaker 2: apply for an application to get a license to operate
Speaker 2: and build a nuclear power plant. New Scale spent between
Speaker 2: five hundred and six hundred million dollars to license its technology,
Speaker 2: so it's a huge financial challenge and it takes a
Speaker 2: very very long time, especially with some of these advanced
Speaker 2: reactors which are atypical of what has come beforehand, which
Speaker 2: is the light water boiling water reactors are pressurized water reactors.
Speaker 2: So the NRC in the US and the Canadian authorities
Speaker 2: and the authorities in the UK, you need to gear
Speaker 2: up to understand the differences between the new types of
Speaker 2: reactors that will be coming forward and respond accordingly. So
Speaker 2: time is a problem, at cost is a problem, and
Speaker 2: there's a lot of technological risks. We don't understand which
Speaker 2: one of these reactors are going to be most sought
Speaker 2: after by utility customers and by data centers and to
Speaker 2: produce hydrogen. So there's a lot of opaque in the
Speaker 2: market right now, and I'm hoping that that can clear
Speaker 2: and we can make some decisions quickly and move forward
Speaker 2: for the technology to deploy.
Speaker 1: And when technology is kind of just getting started and
Speaker 1: just getting momentum, those first companies that are doing it
Speaker 1: really under a lot of scrutiny. And sometimes when things
Speaker 1: don't go very well, they become a canary in the
Speaker 1: coal mine, and other times they are just the fact
Speaker 1: that businesses, maybe not every single one makes it along
Speaker 1: this road to scale. So that then brings me to
Speaker 1: New Scale. Can you talk a little bit about what
Speaker 1: happened at New Scale and whether or not this is
Speaker 1: something that is teaching lessons to other part of the
Speaker 1: market or is it just isolated to that specific company.
Speaker 2: So and your Scale is developing a seventy seven megawatt
Speaker 2: reactor and they intend to bundle two four six of them,
Speaker 2: possibly twelve of them together to fulfill the demand requirements
Speaker 2: from their customer. And what their approach is is to
Speaker 2: have these individual reactors sitting in a pool of water,
Speaker 2: six story swimming pool if you can imagine, and that
Speaker 2: requires a lot of physical concrete excavation of the ground
Speaker 2: and whatever. So they tried to simplify the approach by
Speaker 2: manufacturing these these reactors in an assembly line and to
Speaker 2: produce them simply and get them across because the smaller
Speaker 2: the reactor is, the broader the amount of companies that
Speaker 2: can manufacture these technologies. But in doing so they also created,
Speaker 2: you know, a law of unforeseen circumstances where there is
Speaker 2: a problem now that you need to dig deep into
Speaker 2: the ground to keep this reactor swimming pool. Into encase,
Speaker 2: these these six to twelve reactors underground, and so you
Speaker 2: now have an excavation course that some of the other
Speaker 2: reactors do not have. So apparently the cost of doing
Speaker 2: so in Idaho was prohibitive, and there were some unique
Speaker 2: circumstances that existed at Idaho where the site was proposed
Speaker 2: that made them sort of raise the cost for building
Speaker 2: producing the reactor. Secondly, the customer was UAMS. UAMS is
Speaker 2: an association of fifty or so municipal utilities, and they
Speaker 2: didn't have any historic experience operating nuclear power plants. It
Speaker 2: would have been much easier had you had a Duke
Speaker 2: Energy or a Southern Company or Dominion, which are large
Speaker 2: nuclear operators in the US. They could have better understand
Speaker 2: some of the challenges that would have existed in building
Speaker 2: a first of a kind reactor in a remote place.
Speaker 2: And so the customer was perhaps ill prepared for the
Speaker 2: complexities of building and operating a nuclear power plant, and
Speaker 2: they threw a lot of money the Department of Energy,
Speaker 2: and there was nobody else around the town. New Scale
Speaker 2: was the only company that has gotten an NRC license
Speaker 2: to date, and so we were hoping that this would
Speaker 2: be leading the way and that they would have some
Speaker 2: sort of success in developing that. So a combination of
Speaker 2: technology that perhaps was not really thought out as well
Speaker 2: as that should have been for that particular location, a
Speaker 2: customer that didn't have the expertise that some of the
Speaker 2: other larger utilities could have provided and could have foreseen
Speaker 2: some of the issues and cut them off at the pass.
Speaker 2: And the fact that you had one company going forward
Speaker 2: that had a lot of US government support, and perhaps
Speaker 2: there were some questions and issues over there. The New
Speaker 2: Scale technology represents an incremental move forward. The innovation was
Speaker 2: a shrinkage in size, and it did not provide some
Speaker 2: of the other advantages that say, a fast reactor or
Speaker 2: a high temperature gas reactor would have provided. And it
Speaker 2: turned out to be more complicated and more expensive than
Speaker 2: people had anticipated.
Speaker 1: But not wholly uncommon when we think about new technology
Speaker 1: of any kind. And I know you know the stakes
Speaker 1: are high with nuclear, but when you're thinking about implementing
Speaker 1: new technology, there are going to be some implementation hiccups.
Speaker 1: Do you think that this, because the stakes are so high,
Speaker 1: is going to cause problems for the wider industry for
Speaker 1: us or will it just be that this particular thing
Speaker 1: has been difficult and maybe the next one will be
Speaker 1: less difficult.
Speaker 2: Well, we asked New Scale those questions, and they were
Speaker 2: very quick to point out that the site characteristics and
Speaker 2: the individual circumstances of the Carbon Free project, which was
Speaker 2: the name of the project, were unique. And New Scale
Speaker 2: has been pretty aggressive and developing other data center applications
Speaker 2: forwards technology, and some of the competitors to New Scale
Speaker 2: a whole tech or a terror power or whatever. They
Speaker 2: are all very quick to distinguish the differences between their
Speaker 2: approach and their technology and what went wrong at the
Speaker 2: Carbon Free project. So there's hope that there will be
Speaker 2: additional pathways or new pathways that these other companies can
Speaker 2: run down and succeed. And I hope that's the case.
Speaker 1: So let's talk a second about enriched uranium and what's
Speaker 1: been happening on that side. Last time we had you
Speaker 1: on this show, I asked you whether or not there
Speaker 1: was enough uranium in the world for are current and
Speaker 1: future nuclear plans, and there was a resounding yes. But
Speaker 1: from the enrichment side, we've actually seen enriched uranium fluctuating
Speaker 1: prices this year. We've seen prices go up. Can you
Speaker 1: talk a little bit about what has caused that and
Speaker 1: really what's going to happen on the price side when
Speaker 1: it comes to enriched uranium.
Speaker 2: Okay, so from the price of uranium, uranium is traded
Speaker 2: in the form of yellowcake U three eight, and there
Speaker 2: is uranium is traded in the spot market, which utilities
Speaker 2: and minors can sort of negotiate sell on a short
Speaker 2: term basis. But what's really really important is the term market.
Speaker 2: The term market is long term pricing contracts because utilities
Speaker 2: understand that what's really important is not so much the
Speaker 2: price of the uranium, but the availability of the uranium.
Speaker 2: Nuclear utility does not want to not have uranium to operate,
Speaker 2: so it's must of concern for the price than it
Speaker 2: is for the availability. Availability is very, very important, and
Speaker 2: we've seen the price of uranium double in twenty twenty three,
Speaker 2: and there has been a set of hive around one
Speaker 2: hundred and six earlier this year, sometime in February. It's
Speaker 2: retreated a little bit about out since then, but there's
Speaker 2: been in the news a lot because of the fact
Speaker 2: that enriched uranium. Uranium comes out of the ground at
Speaker 2: points zero seven percent uranium two thirty five, which is
Speaker 2: the fissile part of the atom, which is unstable, as
Speaker 2: opposed to uranium two thirty eight, which is the more
Speaker 2: stable fertile part of the atom. And so you enriched
Speaker 2: the natural uranium from points zero seven percent in its
Speaker 2: natural state up to four and a half percent for
Speaker 2: suitable use for a nuclear power plant. If you are
Speaker 2: having an advanced reactor, you'll want to go ahead and
Speaker 2: push that uranium up to say nineteen and a half
Speaker 2: twenty percent or somewhere in between, and that's called HALU.
Speaker 2: Highest say low enriched uranium and I say loan rich uranium.
Speaker 2: The only commercial source for that in the world these
Speaker 2: days are the Russians, and it's a very expensive process.
Speaker 2: You just don't all of a sudden decide well, I
Speaker 2: want to go ahead increase my uranium levels enrichment levels
Speaker 2: from four and a half percent up to twenty percent,
Speaker 2: because you have to go through a lot of regulatory
Speaker 2: and licensing steps in order to do that. So it's
Speaker 2: pretty expensive proposition. And also another problem is that there's
Speaker 2: an uncertainty of demand. You have ten to twelve companies
Speaker 2: in the US, as an example, that are going through
Speaker 2: the licensing process or discussions with the NRC. We're not
Speaker 2: sure how many of them will go through and whether
Speaker 2: or not those companies that do go through the process
Speaker 2: will actually deliver a commercial product that will have a
Speaker 2: demand for uranium. So it's like a chicken and egg
Speaker 2: situation as far as HALU demand is concerned. Now, the
Speaker 2: US government has stepped in and made a lot of
Speaker 2: incentives recently to sort of support a domestic uranium industry
Speaker 2: laws left and right. Most recently earlier this week, there's
Speaker 2: executive order from the President of Biden that he's going
Speaker 2: to try to support large reactors, which I think is
Speaker 2: a surprising development. He's also going to support the deployment
Speaker 2: of advanced reactors on military basis, and he's also providing
Speaker 2: a lot of support to the uranium industry to create
Speaker 2: and strengthen the uranium industry in the US. The uranium
Speaker 2: we used to produce a lot of uranium in this
Speaker 2: country and then for environmental reasons and for the fact
Speaker 2: that nuclear fill out of favor in the wake of Fukushima,
Speaker 2: you know, our production has gone down to next to nothing.
Speaker 2: Now we're starting to produce more and more uranium. But
Speaker 2: we have only one facility in the US that can
Speaker 2: make highes say loan rich uranium, and that's Centrist and
Speaker 2: that company is just gearing up and looking to try
Speaker 2: to expand its operations and hopefully with support from the
Speaker 2: US government, financing will flow to the construction of a
Speaker 2: larger facility with which they'll be able to provide commercial
Speaker 2: amounts of HALO for the US industry and other markets globally.
Speaker 1: So if the Biden administration, during an election year, has
Speaker 1: announced that they want to see more uranium enrichment and
Speaker 1: more large nuclear plans. What I want to understand is
Speaker 1: really what underlies that. Is it domestic security of energy
Speaker 1: supply and invariably this is a country that exports natural gas,
Speaker 1: or is it a big job creator? And are we
Speaker 1: talking about jobs here something else that maybe I'm not
Speaker 1: getting well.
Speaker 2: Jobs has been one of the big highlights of the
Speaker 2: nuclear power industry. One of the reasons that I believe
Speaker 2: that they went forward with the Hinckley project because it's
Speaker 2: not an expensive electricity, but it was twenty five thousand jobs.
Speaker 2: So the decision was made by politicians years ago to
Speaker 2: build this facility because I'll put twenty five thousand people
Speaker 2: to work and would produce a tremendous amount of electricity,
Speaker 2: and it would be domestically produced electricity, carbon free electricity.
Speaker 2: So there was a lot of reasons for going ahead
Speaker 2: with that decision, aside from producing the least expensive election electricity.
Speaker 2: And so that's a big driver for nuclear power is
Speaker 2: the fact that it keeps people at work, and it
Speaker 2: provides energy security, and it's also carbon free, and it's
Speaker 2: a good balance and a good complement to the increasing
Speaker 2: amount of renewables that are being deployed. So I think people,
Speaker 2: I think erroneously look at nuclear as a competitor to renewables.
Speaker 2: I look at nuclear as a complement to renewables, and
Speaker 2: that you have renewables as a preferred option, and you
Speaker 2: have a complementary source that's baseload that's available twenty four
Speaker 2: hours a day that can sort of complement and enable
Speaker 2: the growth of carbon free energy, especially renewables. And we
Speaker 2: see data centers entering the picture right now. Data centers
Speaker 2: have a requirement for twenty four to seven clean energy
Speaker 2: and that can be best supplied with nuclear power.
Speaker 1: So essentially the US's solution to enriched uranium is to
Speaker 1: do it domestically.
Speaker 2: Yes, there's Urinko is another supplier of enriched uranium. They
Speaker 2: have operations in Europe and they have an operation in
Speaker 2: New Mexico. But I think that Russians we're providing a
Speaker 2: pretty substantial chunk, about twenty seven percent of the enrich
Speaker 2: uranium to the US, and that's something that needs to
Speaker 2: be changed from a political perspective, and also it's a
Speaker 2: very very helpful, healthy thing for the US to go ahead,
Speaker 2: and because we are the largest market for uranium in
Speaker 2: the world with ninety four reactors operating. The other closest
Speaker 2: country is France and China, which have you know, just
Speaker 2: over fifty.
Speaker 1: You had mentioned twenty four to seven clean power, and
Speaker 1: the question I have for you is can you give
Speaker 1: me some examples of where those projects are kind of
Speaker 1: the companies that are looking at those sorts of projects
Speaker 1: And additionally, you know, are they including nuclear in this
Speaker 1: or when they're seeing twenty four seven clean power, they
Speaker 1: trying to figure out how to do it with renewables only.
Speaker 2: I think that if you look at all of the
Speaker 2: press releases that are coming out from some of these
Speaker 2: advanced reacted to companies SMR developers, they're all talking about
Speaker 2: the big opportunities from data centers, new scale being one,
Speaker 2: oklow being another one. And so this is a very
Speaker 2: very important thing. Microsoft operates a huge fleet of data
Speaker 2: centers and they've signed a contract with a fusion company, Helion,
Speaker 2: to provide electricity for that data center by twenty twenty eight.
Speaker 2: And so there's a lot of interest from data centers
Speaker 2: to sort of gear up and have carbon free power,
Speaker 2: which reliable, secure and affordable because what will happen is
Speaker 2: that the data centers will contract directly with these nuclear
Speaker 2: operations and sort of bypass the retail and wholesale rates
Speaker 2: that they would have to pay by buying that electricity
Speaker 2: from the grid. So we're seeing situations where nuclear power
Speaker 2: plans are signing power purchase agreements with data centers to
Speaker 2: directly supply them.
Speaker 1: So we had talked about the new projects that the
Speaker 1: Biden administration is encouraging and then commitment to cop to
Speaker 1: trouble nuclear capacity and new technology, But what about the
Speaker 1: existing technology that's already online. In this post Fukushima way,
Speaker 1: we saw a number of those getting retired. Have the
Speaker 1: retirements stopped?
Speaker 2: I think that the era of nuclear retirements is behind us.
Speaker 2: It's now very politically unacceptable to close down a nuclear
Speaker 2: power plant which is carbon free for a variety of
Speaker 2: different reasons. In the US, most of the nuclear power
Speaker 2: plants were closed down because they were uncompetitive with chief
Speaker 2: natural gas. And we're seeing for the first time in
Speaker 2: the US, if not the world, where a nuclear power
Speaker 2: plant that was closed because I couldn't compete with cheap
Speaker 2: natural gas is now being supported by the US government
Speaker 2: and the state government of Michigan to bring it back online,
Speaker 2: and that's a very very significant thing. And the Biden
Speaker 2: administration is also talking perhaps about other nuclear power plants
Speaker 2: that have been closed in an era a very cheap
Speaker 2: natural gas to try to bring them back online, and
Speaker 2: that's something that would be of great interest. It's part
Speaker 2: of a triative strategy to keep the existing fleet operating longer,
Speaker 2: to expand the capacity of the existing fleet, to bring
Speaker 2: back some reactors that have closed. I don't know how
Speaker 2: successful and to what extent that will be, And to
Speaker 2: build advanced reactors in this country and in the US market,
Speaker 2: I really question the wisdom about building large reactors because
Speaker 2: large reactors take ten years to build, they're very, very expensive,
Speaker 2: and the decision process of a utility is such that
Speaker 2: the CEOs typically last five to six seven years at
Speaker 2: a leadership position. So CEO who starts initiates a project
Speaker 2: to go ahead and build a nuclear actor will not
Speaker 2: be there when it finally comes online. And so there's
Speaker 2: a lot of risk and a lot of cost overrun
Speaker 2: and time scheduling, and it takes a very long time
Speaker 2: to build these reactors, and I think that poses a
Speaker 2: huge amount of risk for you toies what distinguishes the
Speaker 2: nuclear power industry from the other renewable industries is that
Speaker 2: policy decisions are less effective than market pull to get
Speaker 2: nuclear power plants built. So you can have all the
Speaker 2: policy in the world, but you really need to have
Speaker 2: a utility say hey, I really need this twenty four
Speaker 2: to seven carbon free energy, and I'm willing to spend
Speaker 2: a lot of money to go ahead and get that,
Speaker 2: and the cost of doing so and the time frames
Speaker 2: for doing so are so prohibitive in the United States
Speaker 2: that I suggest that the solution will be for advanced
Speaker 2: reactors which are smaller, provide less capital risk, in fact,
Speaker 2: they costs. They're smaller, they cost less, and that they
Speaker 2: can build in a shorter period of time, and they
Speaker 2: sort of become more acceptable to the decision makers out
Speaker 2: of utility or are an operator of a lot of
Speaker 2: data centers to chase after smaller nuclear reactors as opposed
Speaker 2: to large reactors which can take forever.
Speaker 1: So we know that nuclear is now providing flexibility, it's
Speaker 1: carbon free, it has a role to play in twenty
Speaker 1: four to seven clean power. And you had mentioned earlier
Speaker 1: that China was one of the countries that was looking
Speaker 1: at installing more on the small modular side. Is there
Speaker 1: a parallel and can I essentially be hopeful that costs
Speaker 1: are going to come down, not just for the smaller
Speaker 1: reactors because they're smaller therefore less expensive, but are we
Speaker 1: going to see cost of clients, because when I think
Speaker 1: about what's happened with China and solar manufacturing and battery manufacturing,
Speaker 1: we have seen prices drop precipitously when they have entered
Speaker 1: a market really at scale. Are we going to see
Speaker 1: the same thing.
Speaker 2: In nuclear There's a fundamental difference between the US market
Speaker 2: for nuclear power plants and the Chinese market for nuclear
Speaker 2: power plants, and the two significant differences. One is that
Speaker 2: in the US, we are greening the electrical grid. In
Speaker 2: China they're expanding the electrical grid in a much faster way.
Speaker 2: So large reactors become very very appropriate. If you're expanding
Speaker 2: the size of your generating capacity, We're going to do
Speaker 2: that in a smaller way than the Chinese are doing.
Speaker 2: We have a lot of coal plants that we need
Speaker 2: to retire. So if you're retiring coal plants that are
Speaker 2: four or five hundred megawatts, typically you want to have
Speaker 2: them replaced by smaller mountor reactors that are closer in
Speaker 2: size to what you're gearing down. And another most significant
Speaker 2: distinction between the Chinese market and the US market is
Speaker 2: that Chinese, because they have such experience building large nuclear
Speaker 2: power plants, they're very good at it, and they can
Speaker 2: produce and the cost of building a nuclear power plant
Speaker 2: is probably one quarter in China as it is in
Speaker 2: the US based on the data we have collected, So
Speaker 2: it makes a lot of sense for the Chinese to
Speaker 2: go ahead and build large reactors. They'll put six reactors
Speaker 2: at one site and they'll do them sequentially, so it's
Speaker 2: a very very cost effective way of manufacturing and producing
Speaker 2: large reactors. So I see China being a leader in
Speaker 2: large reactive development for a while, even though they're starting
Speaker 2: to develop their own small react the technologies potentially for
Speaker 2: export and for smaller remote areas, and they're ahead of
Speaker 2: the US in doing so.
Speaker 1: Already, you've already discussed that the US is getting back
Speaker 1: into the game here and that China's looking at it.
Speaker 1: And then historically Russia has been focused on nuclear power
Speaker 1: as well. The Middle East is potential growth area. Can
Speaker 1: we talk a little bit about some of the dynamics
Speaker 1: there and why that might be taking place.
Speaker 2: The UAE signed a lot of agreements with US advanced
Speaker 2: reactor companies, which I think is very very encouraging because
Speaker 2: they can provide a source of capital and they can
Speaker 2: provide access to local markets in the region. One of
Speaker 2: the things that a very markedly difference between the market
Speaker 2: for electricity in the Middle East as opposed to the
Speaker 2: US is that the demand for electricity in August is
Speaker 2: typically twice what the demand is for electricity in December
Speaker 2: because of the huge air conditioned load. So what you
Speaker 2: end up doing is you try to apply your peak
Speaker 2: demand and you have all this excess capacity. So we've
Speaker 2: had conversations with prospects in the Middle East who are
Speaker 2: looking to develop nuclear power in order to sort of
Speaker 2: provide that peak demand, and then they can use when
Speaker 2: there's less demand for electricity, switch the energy to desalidating
Speaker 2: water and also to producing hydrogen. And that's not a
Speaker 2: very very effective way of not one hundred percent utilizing
Speaker 2: your electrolyizer, but it's very easy to store water. So
Speaker 2: you can have these nuclear power plants switching to desoalidating
Speaker 2: water or producing hydrogen, and that makes a lot of sense,
Speaker 2: and we see a lot of interest in the region.
Speaker 2: We see also a lot of growth in nuclear power
Speaker 2: where you have Turkey and Egypt are both building for
Speaker 2: large nuclear power plants. The UAE has just completed for
Speaker 2: large nuclear power plants and it's talking about a second
Speaker 2: large plant over there. And also Saudi Arabia has been
Speaker 2: toying with building nuclear power plant for a lot of years,
Speaker 2: and they are at one time we're considering seventeen nuclear
Speaker 2: power plants. Now it's down to two or so. But
Speaker 2: there's a lot of a lot of issues and a
Speaker 2: lot of opportunity to provide some carbon free generation over there,
Speaker 2: to sort of have them stop burning oil for their
Speaker 2: power generation needs. So the Middle East and other parts
Speaker 2: of Africa can be very very interesting prospects for the
Speaker 2: right type of nuclear technology.
Speaker 1: One of the potential use cases for nuclear is for hydrogen. So,
Speaker 1: as we know from the show, you make hydrogen from
Speaker 1: other sources of energy and then use it for perhaps
Speaker 1: hard debate space and various things that are more difficult
Speaker 1: to decarbonize, like cement or steel or aluminum. Can you
Speaker 1: talk about some of the advantages of using nuclear as
Speaker 1: the energy source for hydrogen.
Speaker 2: There are plans in the US to develop nuclear powered
Speaker 2: hydrogen hubs, and there is a big distinction between producing
Speaker 2: hydrogen from nuclear power as proposed to producing hydrogen from
Speaker 2: renewables and the fact that you can use solid oxide electrilizers, soees,
Speaker 2: and these things take effect electrilyizing steam as opposed to
Speaker 2: electrializing water. And so the thermal energy available from a
Speaker 2: nuclear power plant combined with electrical energy from a nuclear
Speaker 2: power plant gives the cost give a certain cost advantage
Speaker 2: to producing hydrogen from nuclear power as opposed to producing
Speaker 2: hydrogen from renewables, And that's something that is being looked at,
Speaker 2: and whether or not it's actually true is perhaps something
Speaker 2: that needs further exploration. I know in Poland Rolls Royce
Speaker 2: is talking to a company called Industria and they're thinking
Speaker 2: about developing nuclear and hydrogen projects in the country, but
Speaker 2: the timeframe for that is not going to be until
Speaker 2: mid to early twenty thirties.
Speaker 1: Now, a girl's got a dream when it comes to
Speaker 1: thinking about technology breakthroughs that could really fundamentally change the
Speaker 1: economics and therefore missions of the energy industry. Can you
Speaker 1: tell me a bit about how close we are getting
Speaker 1: on fusion.
Speaker 2: Fusion is a great topic. It's received about six billion
Speaker 2: dollars in private investment in the last several years, and
Speaker 2: there are several companies in the UK, in the US
Speaker 2: and Asia who are really pushing forward to sort of
Speaker 2: commercialize this technology. I have visited six or seven different
Speaker 2: fusion companies in Europe, in the UK, and in the US,
Speaker 2: and I'm very impressed by what I see. One has
Speaker 2: to understand that what has enabled this rapid increase in
Speaker 2: interest in fusion, and it boils down to several things.
Speaker 2: The tools that the engineers and scientists need to produce
Speaker 2: fusion devices have suddenly become much more readily available, and
Speaker 2: they include supercomputing, three D printing, advanced material and high
Speaker 2: temperatures some conductor magnets. So the available of these four
Speaker 2: things coming together all of a sudden gives these brilliant
Speaker 2: people the tools with which to go ahead and miniaturize
Speaker 2: fusion devices and to make them much more efficient. And
Speaker 2: as a result of that, we have progress made and
Speaker 2: several different continents to recognize the potential and realize the
Speaker 2: potential of fusion. So we're very, very hopeful that we'll
Speaker 2: see some additional announcements in twenty twenty five that will
Speaker 2: sort of introduce a second wave of enthusiasm for fusion.
Speaker 2: Several companies took a billion dollars two billion dollars in
Speaker 2: one case of Commonwealth fusion in twenty twenty two, I believe,
Speaker 2: and so they're now investing that money and producing prototypes
Speaker 2: which will hopefully produce net energy gain. And when that happens,
Speaker 2: then I expect we'll see another influx of capital that
Speaker 2: will be able to sort of lead to the commercialation
Speaker 2: of fusion devices, hopefully by the end of the decade.
Speaker 1: So there's good reason to be hopeful. Chris, thank you
Speaker 1: so much for joining today and forgiving it's an update
Speaker 1: on what's happening in nuclear.
Speaker 2: My pleasure always. Thank you.
Speaker 1: Today's episode of Switched On was produced by Cam Gray
Speaker 1: with production assistance from Kamala Shelling. Bloomberg NIF is a
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