Welcome back to the couple. Today I'm joined by a returning guest, James Crellin. Stein, who's previous to appearances and episodes on the past, present and future of American nuclear energy. Have stunned myself and listeners with James near encyclopedic knowledge and sharp analysis. Dylan, producer and co conspirator here at decouple, he's often reminding me to stop calling people savant. But perhaps I can just use it as an adjective savant like skills, I think, got a lot of feedback from people saying, Who the hell is this guy? And how does he know so much, some really respected people in the field at MIT and other places. So not to fluff your feathers too much, James, but made a big impact on those last two episodes. And looking forward to having you back today.
Great time glad to be here. And thanks for fluffing my feathers, I
suppose. All right. So the topic of the day, I'm labeling get small, misunderstood reactors. How does that sound to you?
Maybe Yeah, sure. Small, misunderstood, I don't know how misunderstood they are. But we'll go into that maybe, and
see, for sure. For sure. I mean, I have this, this is the need to, to categorize things to create taxonomies, for things in order to be able to discuss them. And you know, we're pretty wonky. So we like to go into details, and I think, get frustrated by terms which are overly broad, insufficiently specific and potentially misleading, particularly to people, you know, the cursory knowledge outside of the field. And I would say that, you know, includes almost every single policymaker and government official I've ever run into. So it's a pet peeve for me, because of some of the misconceptions, you know, such as the idea that everything labeled as an SMR can be produced like a Model T in a factory driven to cite, no need for any civil works, etc. And also some of the ways in which I think it's been a little bit self defeating in terms of, you know, the the form of nuclear that has social licence, and therefore, it gets sort of a singular focus in policy circles where nuclear needs to be floated more as a trial balloon. And that often ends up I think, creating some severe limitations I got back from Australia about a month ago, where SMR has been sort of the focus and the unfortunate consequences, there are no currently deployed SMR is in the Western world. And that creates a pretty shaky foundation for for that advocacy. So yeah, I mean, that's, that's where I'm coming from, where are my frustrations are at. But we have a lot to talk about today. And maybe I'll just try and lay out a couple of things. And I'm sure it will deviate here and there, which I'm looking forward to, but I thought it was of interest, great. British nuclear has sort of revealed a shortlist of reactors that they're interested in pursuing, all of them are small, at least. And they're all existing lightwater boiling water technologies, which I think is very interesting, because another sort of face of SMRs amongst policymakers are, you know, the use of advanced nuclear often in furs, you know, different coolants, and moderators and so called Gen four technologies. So again, I thought, Great time to touch on this and really looking forward to hearing some of your your takes. Sure.
So, you know, I think it's a really, you know, SMRs, I think, are at this point, sort of more of almost a marketing term than they are a technical reality, in a lot of ways, you know, if you look at, you know, what we classically, I think, want to think about an SMR as literally like, a something like, as you said, a Model T or a Toyota Camry that it comes off of a factory line, and we just sort of plop it somewhere and turn it on. But except for the micro reactors, which are, you know, below 50, or 30 megawatts, either thermal or electrical, once again, this is where it gets very iffy. But generally, below, definitely below 50 megawatts, electrical, none of the micro reactor, none of the SMRs, for example, that we're in the sort of great British nuclear, which is a, I have a joke about that name. But regardless, you know, those are not reactors that don't require any civil works. In many ways. I would like to think of them as as really small modularize, you know, regular nuclear power plants. And I think that has advantages and disadvantages. But I want to pull back for one second and ask this very basic question. Right, in, I think, you know, a lot of areas in the world, right, especially in emerging economies and lower income economies, that really do you need a lot more energy access, right, do you need for prosperity for just increasing, you know, increasing human health and well being? You know, in those places, we really do see grid constraints, right, you know, the grids are not going to be able to take you know, if you go to a country like Rwanda, which has only a couple 100 megawatts of installed capacity in total on the entire grid, you can't pop 1000 megawatt plant down there and think it will work or will be anything easy, but in higher income countries and in particularly what we think of as the West, you know, that's whether it's South Korea, the US or Canada or western or eastern Europe, we have very, very large, you know, generating assets off many of them fossil, many of whom already have all the transmission interconnections already there all the siting. And so it begs the question, what are we thinking about when we're trying to do SMRs? Because the whole reason why the nuclear power industry through the 60s 70s 80s 90s scaled bigger is because there really are cost capacity, scaling advantages that you get out of going big. And you see this in power plants just generally, it's why despite the fact that we all are surrounded by small modular internal combustion engines called cars, we don't power the world when fossil fuels by just running, you know, 1000s and 1000s of 100 200 horsepower engines, right, we generally go to, you know, big 100 200 300 400 megawatt, you know, combustion, turbans, or whatever the fossil acid are bigger on coal. And so I'm very worried, I'll just be honest with you, that the the obsession around SMRs is making us make some pretty questionable decisions about what the next reactor design should be. And I don't think that they are solving, you know, I don't think SMR I think SMR is to be honest with you are primarily as we talked about in last two episodes, they're a nuclear engineering solution to a financial engineering problem. Right, the UN, I don't really see that many other real benefits for SMRs, for for deploying for baseload power, for what we I think really need to decarbonize in the United States. And I realize it's a very provocative position. But I think I can walk through a little bit. Why I think that, and I think the, you know, there's a pretty good case to be made. And just to finish up here, you know, I'm concerned about what we've now seen in that both the state of Illinois, and in the state of California, where, you know, we've had some heroic pronuclear advocacy done in the state of Illinois, that got the legislature to overturn their moratorium on new nuclear power plants, and the Governor vetoed it with the extensible reason, this is what he claimed at least, that it allowed non SMRs that is non, you know, regular large Modular Reactors, if you want to call them that, to use a Mark Nelson term. Because it allowed those large plants and didn't prohibit didn't only allow for small modular reactors, right. Literally the, you know, Jay Pritzker, literally said, this bill does allow non SMR reactors, and therefore I'm vetoing it, and then we saw a similar bill introduced in the California legislature that would only legalize nuclear power plants, for SMRs. So I think we really do need to start diving in pretty into the rationale between SMRs. And I'll just, I'll just end with saying, I'm not anti SMRs. I'm certainly not anti, you know, non Light Water Reactor technology at all, I think they have a really important, incredibly important role to play. I just think that we have maybe undersold the advantage of the existing fleet reactors, and the existing new larger reactor designs, and maybe oversold some of the advantages of SMRs. Yeah, I
mean, definitely, that's been a big part of our struggle up here in Canada, again, SMRs, being the nuclear technology that, you know, are perceived to have social license, and a lot of our legislation, be it the investment tax credits, and others here, our fight against American energy was to make it nuclear inclusive across the board, existing nuclear Canada, nuclear refurbishments, etc. And we've been successful in that. But I definitely, I think the instinct of the industry was to sort of roll with roll with that and say, Well, we have license for this. And it's really a brand new phenomenon, probably only a year old in Canada, that we're talking large again, so. So that is interesting. I mean, a couple of the rationales. And I thought this was a really interesting distinction. I think it probably came, we touched on at an earlier conversation, but obviously, this this engineering, nuclear engineering solution to a financing problem, this difference between something being financial and something being economic, I think are really interesting. So I'm wondering if you can expand on that a little bit? Yeah, just right before
I go, United States a financial engineering solution, a nuclear engineering solution to a financial engineering problem, but I think you hit also, as I also was talking about, it's also a PR solution, you know, a, a nuclear engineering solution to a PR problem. It's a a nuclear engineering solution to a political problem. And I think that this is sometimes, you know, I think I've mentioned my father's a nuclear engineer. I've literally known a nuclear engineer very closely since the day I was born. Sometimes nuclear engineers view every problem as nuclear engineering problems. And not every problem is a nuclear engineering problem in the world. And so, when we have financial engineering problems, maybe we should try it Do some financial engineering, when we have PR problems, maybe we should do PR issues and advocacy, not have a nuclear engineering solution to that problem. So going back to your exact thing, let's let's expand on this difference between finance ability and economical. Right. So one of the problems that I've talked about, especially in the United States is the way that we finance new nuclear power plants, right. And for these large light water reactors that we've classically built in the US, actually, the only reactors we've really actually built in the US for at least a very long time. You know, they are financed, as I said, as a system financing approach, where you basically have an entire utility pledge, all of its assets, and all of its revenue to be able to service the debt that is used the bonds, for example, that are issued to build that large light water reactor. And just to summit sum it up, the basic problem is you're building a $15 billion plant or a $30 billion plant, hopefully a little bit cheaper, but in the double digit billions, let's say for a two unit plant, I don't think we're gonna get it. No matter what we do, I think it'd be double digit billions for two, two unit like gigawatt scale plant. The problem is, is that it's such a large amount of money, that if the project fails, you really can threaten the entire utility, or the careers of the people who are ordering that at the utility management. And with an SMR, as their name implies, they are just smaller, which means that the overall price tag is going to be much tinier than that even if the price per megawatt is going to be more expensive. But because they make less megawatts, even though it might be a little bit more expensive per megawatt, the overall price is going to be a lot lower. So the if you think about it from a corporate or finance ability perspective, they said, Well, if this project fails, it will be bad, no one wants a project to fail. But you know, surviving a billion dollar or $2 billion, project failure is much, much easier for a company than then surviving a 15 or $20 billion project failure. And the problem is, as you just put up pointed out, that doesn't mean however, that ultimately, the power per megawatt hour or the even just a nameplate adjusted basis is going to be cheaper. In fact, we have a lot of reasons. And most of the rigorous peer reviewed analyses that have looked at this have indicated that SMRs are likely going to be more expensive, per megawatt hour, or per megawatt electrical, just on a nameplate basis, then a larger than a comparable large reactor would be, I think, this is a real problem. Because ultimately, nuclear power plants are creating a, you know, people are going to object, but it is a, it is a weird commodity, but it is a commodity that is sold, and we're gonna have a real hard time if the first couple of units that we are building are going to be producing power that is more expensive than we would classically think.
So, you know, I can see the rationale amongst the Western nuclear industry, that it's better to build something than nothing. And if this is all, we can build on this potential, potentially kickstarts a return to large nuclear, and that's I think, some of the rationale up here in Canada is let's prove we can do it. I'm on board with that I can't I can't disagree with that. You know, it is interesting, you know, hearing, getting a sense of, you know, the loan programs office mandate and what the limitations are, but seeing that there is hundreds of billions of dollars to throw around that it couldn't happen in a more coordinated fashion, or there couldn't be, you know, more aggressive financing of some large nuclear to keep the AP 1000, supply chain attack domestically, etc. But given those confines, like I can see the rationale, and I'm not, I'm not unsympathetic to it. Maybe we'll just maybe reaction to that very quickly. But like, there are a lot of stuff I want to move on to but just to that question of, you know, as a as a means to kickstart a large program again, maybe the West just can't jump there.
Yeah, I think that once again, I am I am very happy that SMR projects are going to get off the ground in particular, you know, I think the ones that are going to really get off the ground like the BW x 300. I think it like all of the you know, because it's 300 megawatts electrical. So it's gonna be an interesting thing to see if that plan in particular, is economical compared to the large light water reactors. But here's where I'm, you know, coming from if you look at the LPO. Right, and the deal with the US Department of Energy more broadly, right. They have basically said that the United States in order to achieve what is US government policy by 2050, they're gonna need 200 gigawatts, at least of new nuclear power. In California. It's dozens and dozens of gigawatts in New York State. It's dozens and dozens of gigawatts of new firm generation that is low carbon and the only real firm low carbon scalable technology that actually has been deployed. What we have right now at least is, is nuclear, you know, there's carbon capture sequestration, hypothetically for natural gas, but we've never really brought it to scale and certainly not brought it to, you know, providing 20% of the US electrical power 70% of France's. So I'm looking at that. And I am sympathetic, I'm also sympathetic that there are a lot of places that we're going to need SMRs by the way, in the United States, but when we're talking about the bulk, amount of low carbon power affirm low carbon generation that we need, the question that I have for everyone is, does it really make sense to be going 50 megawatts, or 300 megawatts at a time and possibly getting a lot of economic disadvantage? versus us really looking hard about, okay, we need to build the SMRs. But what is the policy decisions that we need to make to build the largely light water reactors as well, and I don't think we spent a lot of time on that. And one of the things I've just worried about, just to be honest with you is we're already seeing some of these issues with SMRs happen. You know, I think the SMR project that is furthest along in the United States right now is the carbon free power project by us out in Utah, this can be built in Idaho National Lab, and what we just saw, I think, is sort of giving credence to my warning a little bit that, you know, from 2022, to, you know, January of 2023, the power price of that project, more than doubled per megawatt hour, the estimated hasn't been built yet. This is just the paper estimate of what is coming, going, going from $60 per megawatt hour to over $119 A megawatt hour. And that's before any building has been done. Right? Before we really actually have the most detailed cost estimates completed. And I think this is, you know, that project may not actually survive, that project may never actually get off the ground. And, you know, I think we do need to be thinking are we going to be ever able to get the economics of the SMR is competitive enough with what the large plants can provide that were able to launch this in a really sustained way that would get us to that point where we're delivering 1000s and 1000s of megawatts of new nuclear capacity. And I just, you know, once again, the modeling is just not supportive of this idea that, you know, these plants are going to be necessarily as competitive as the large plants are, and we're seeing that happen begin to happen now, in real life as well.
I think there's a key difference between nice to have a need to have nuclear, and you know, when there's pragmatic reasons, like energy security, again, driving decisions in Eastern Europe, that leads to the pragmatic decisions to solve the financing problem and do the most economic nuclear. So, in my mind, that just doesn't exist. In the US. It is interesting sort of seeing, from the more I guess, anti renewable side of the nuclear advocacy movement, some sort of cheerleading on the spiraling costs of offshore wind. And I think some of those cost drivers are very much going to apply to nuclear as a capital intensive resource dependent on a bunch of different commodities. So just just a little side note there. I am, you know, very interested in following along here, because, you know, over the last 10 years, there's been a lot of excitement about, again, a so called advanced nuclear Gen for nuclear. I thought it was very interesting that the, you know, six front runners in great British nuclear, you know, reality TV show there, the great run off, whatever you want to call it, are all traditional lightwater technologies. So I think that that sort of leads me to want to dive this issue a little bit more. Talk about some of the drive behind the excitement for Gen four in the last 10 years, I think we're going to touch a little bit on sort of venture capital, and how that's shaped a lot of, you know, planning and imagination in the nuclear space. But first off, I guess. Are you surprised by the shortlist for No,
no, no, not for great British nuclear? I think, you know, here's the you know, I call it sort of the Gen four. It's kind of ironic, I call them the sort of Back to the Future reactors, because if you go back to 1950, right, remember the first you know, nuclear power generation was not by a light water reactor. You know, EBR one Experimental Breeder Reactor number one was of course, a liquid metal sodium potassium eutectic fast breeder reactor and actually that was the first reactor that produced any sort of meaningful amounts of electric power. This was way before we ever got shipping port or you know, a light water reactor nuclear power plant, you know, these reactors have been around for basically from the birth of the nuclear industry to begin with, including Molten Salt Reactors, right. You could go down the list of high temperature gas reactors. here's the here's the truth. We need advanced nuclear in a decarbonized world because Light Water Reactors by their very nature of using light water as a coolant or heavy water, you know, water as a coolant, you know, it gets very, very challenging to get to very high temperatures, it's not impossible, of course, but you really start, you know, the pressure really, really begins getting very difficult to deal with, with water at at much higher temperatures. And you know, a light water reactor is generally providing steam at you know, 300 degrees Celsius, maybe a little bit higher than that. And for a lot of process heat applications, we're going to need to go to much higher temperatures. And, and if we actually get to a world in which we really do need have a lot more nuclear than we do have now we have fuel cycle needs as well to breathe thorium or to really have a plutonium based sort of, you know, fuel cycle. We're not anywhere close to that. So there's real important applications about for advanced reactors. But my note of caution here is, you know, we think of nuclear power as a firm reliable source of generation because it is right now. But if you go back historically into the 60s and 70s, nuclear power, including the light water reactor, were not particularly reliable. And the real technology that we got is we learned how to master that tech, right, we learned how to master that fuel, that coolant chemistry that you know, the fuel, you know, the cladding and the fuel rod interactions. What is going on in a nuclear power plant and nuclear reactor is magic. It is alchemy, in many ways, you're literally taking atoms and you're splitting them into two or more daughter nuclei that may be unstable and decaying to a bunch of other elements. The chemistry, for example, just to give one example here of this is really, really challenging. And something that is not actually dealt with in almost any other place in chemical engineering, or in Chem and chemistry in general, you know, when a nuclear fuel rod chemically is one of the most interesting things that exist, because you literally have dozens and dozens of chemical elements simultaneously being produced and popping in and out of, you know, sort of going to left them to the right on the periodic table, as they go through beta decay or alpha decay. So it is an incredibly interesting, complex chemical environment that is not easy to master. And it requires a lot of just to be honest, real world experience. And the issue that we have with a lot of these non light water reactor technologies is not that they aren't great, not that they aren't extremely important to develop is is that they're not technologically mature, in the same way that we see light water reactor technology. And this is not just hypothetical, right? If we look at the history of non Light Water Reactors, even among pioneering nuclear countries, whether it's United States, Russia, France, England, we don't see the same reliability coming. You know, manifesting if we take for example, the the biggest non light water reactor power plant the United States has ever built, which is Fort St. Vrain, which is a high temperature gas cooled reactor in Colorado, right over the 10 years that that plant operated, the capacity factor didn't hit 16% or cumulatively, it was 15.9% over the plant's entire life. Now, this doesn't mean that high temperature gas reactors are bad. Just as if there are operational challenges we had associated with light water reactors in the 60s and 70s doesn't mean Light Water Reactor technology is bad. It means though, that we do not have the real world operating experience, and understand all of those challenges that to be honest, are almost impossible to fully exhaustively get through until you build one of these plants and turn it online. And what I would just ask us to realize is that I don't think we have prepared ourselves in the proper way to actually deploy generation for technologies. I'll give you one very easy example. The West right now does not have a fast neutron source. We do not a fast neutron source that is actually a nuclear reactor, you know, ignoring accelerator driven sort of sort of magic or fuser generated magic, right? You know, when we're qualifying a new nuclear fuel, well, one of the things that you do as a tester radiation, right, you put it into a reactor and you experience it, you expose it to a neutron flux that is going to be representative at least we hope of what it's going to experience in the commercial reactor. We don't have an operating fast reactor in the in the West outside of Russia and China. There isn't any operating faster. So there's hypothetically maybe one in Japan that hasn't been turned on in years. And just that sort of basic CES, you know, sort of testing ability we don't have. So I'm asking us, we should be developing a very, very robust, fast reactor Development Program, or non light water reactor, because they are so important. And because they have such, they have a lot of advantages over Light Water Reactors. But I think we should be clear about what these are going to be, these are likely not going to, we're not going to turn one of these things on. And it's just going to be, you know, 90%, rock solid generation, like we expect out of the LWR fleet. It's going to require some learning by doing in order to get to that expected. Reliability, and we're just not, we're not taking the steps necessary to ensure that we actually get there.
Yeah, I mean, it's interesting, going back Well, beyond nuclear to the beginning of the Industrial Revolution, I mean, our expertise at managing water under high pressure and using steam, I mean, this is hundreds of years old. Versus versus these more modern technologies. It's not that the learning curve just began in the 50s and 60s it, you know, far, far longer track record. So I do want to talk about, you know, getting from the lab bench to commercial operations. And I think you've talked a little bit about that from the operational side, and you're hinting at it in terms of, you know, what's required to qualify fuel, etc. But before we get there, you know, I guess so much of the energy debate, the nuclear debate is, when we, when we step back from it, especially non experts, like myself, it's bound in a lot of sort of aesthetic and psychological considerations and framings. And so, I'm particularly interested in again, the role of venture capital finance, in some of the sort of paper reactor, advanced reactor type concepts, and sort of what's driving some of the thoughts here. And when I look at it, you know, I see folks that have made a lot of money in tech, in a highly disruptive industry. And, you know, maybe they've made their millions and maybe interested in making their millions or billions more, but they start to turn to these kind of broader existential problems facing humanity, maybe it's climate, and they discover nuclear, and they see how incredibly awesome it is. And I truly mean that the word awe inspiring the alchemy, the strong atomic force, the incredible energy density, etc. And they're incredibly frustrated, frustrated with the glacial pace of innovation, and think, hey, if I can disrupt this AI could solve this problem. Maybe I can make a pile of cash on the side. But, you know, I think there's this incredible sort of frustration, and all these dumb nuclear engineers, they're, they're, they're messing around with the wrong technology, you know, we, we prove that molten salts work in, you know, in Tennessee, or, you know, EBR proves that, you know, just let's get on with it. So nothing happened at EBR. One, that was a proud anyway, sorry, yeah. Anyway, so maybe maybe riff off of riff off of that, and what you've observed in that space.
Let me start with a story, right, you know, I have been a lover of nuclear power, since I was like, you know, seven or six years old, and I still had the boy like, wonder, with with this technology, it is, seemingly like anything else in the world that you put a pile a bunch of metal rods in a tank of water, and that tank of water will just boil endlessly for years. That is something like it's like a Harry Potter or something. It is it is magic, in the sense that the technology that we are doing, you utilizing this entire field is the first time that man has captured the strong nuclear force, and has been able to put it toward, you know, sort of tame it and put it towards productive use the strongest force in the universe. And that's why, you know, the the biography of people, like Oppenheimer was called American Prometheus, it's literally took the strong nuclear force, and the nuclear engineers sort of stole it from the gods. And sometimes it is easy in that magic, to forget that a lot of this technology is extreme to actually tame that magic is one, something that's really, really challenging, and that it's still really, really new in the history of humanity. Right? It's only, you know, December 2 1942, was the time that we had the first self sustained Chain Reaction probably on planet Earth since billions of years since, you know, Oklo, since the natural nuclear reactors. So it is now if you now take that from where we are with tech, right? You have a bunch of people in Silicon Valley, as you said, who are in a field that is innovating really, really quickly that has dramatic disruptive change on a couple of years long basis, and they look at nuclear power. And I actually went I was at a cocktail party in in, in Silicon Valley. I think I've told you this story before, where you know, you would talk to the Silicon Valley guy and they were just like, You guys are literally using technology from 1953, basically, which is the Light Water Reactor technology. I didn't want to hint to them that you know, molten salt reactors and sodium reactors are also battled. But their their idea is, hey, this technology is so old, it has not been disrupted, you know, really in any suit, you know, in their mind, at least in any meaningful way for so long that there's got to be a better solution than this. And therefore, they want to take that sort of Silicon Valley ethos, which so much of it is predicated in software development, where development, it can really happen iteratively very, very quickly, very disruptively. And you want to apply it to nuclear engineering. The problem is, is that they're taking a software mentality to the hardest of hard tech, which is nuclear power, right. And the problem is, is as I was explaining, just the chemistry alone of these issues is very, very complicated. And something that is very hard to understand. Without actually building an operating the reactor in the real world, it is not like running, you know, a new, you know, Python compiler or writing a new set of of code or jumping from, you know, from Fortran to Giulia or something this is something that really requires actual real world build experience, and understanding the challenges that happened and what Rickover talked about in the early 50s. That's why it's been since the early 50s, in his paper reactor memo that always a reactor on paper is going to be much better than a real world reactor. And the simple reason is, is that the engineers cannot, cannot foresee the all of the challenges that are going to be associated with building a nuclear power plant in real life, because these challenges are so difficult to actually model completely on paper versus in real world. And that's why it's not like the engineers at General Atomics who put that 14 brain reactor together, they weren't aiming for 15%, you know, capacity factor, they experienced challenges that they just did not know how to anticipate. And we've seen this throughout the nuclear development, you know, space in every reactor technology, whether it's light water reactors with its sodium reactors, whether that's, you know, look at even the company, the countries that are developing these non light water reactor technologies, even the Soviet Union slash Russia, which has been developing commercially, sodium fast breeder reactors since the late 60s and deploying them, by the way, for a sec, CIF, Chanko. And then at La Rs, right, they are not deploying right now as their main technology. The liquid sodium fast breeder reactors, their mean bread and butter reactor that they're building the most of our these light water reactors is that because Light Water Reactors on paper are superior to liquids turning faster? No, they aren't. But they have the real world experience in both engineering, design, and constructability. That gives it an edge. And what I see is a very different picture than maybe a Silicon Valley person does about the 50 years of using the same technology. What I see here is that we have 50 years of tech that has been built up by operating these plants that allows us it's sort of the key to unlock that strong force and be able to turn it into useful work in an economical, reliable way. What I see is, is that it is amazing that we take the same plants that 40 years ago in the United States weren't breaking 50% capacity factor records. And now we're operating at 93%. That is technology. And that is innovation that has happened is just simply not maybe innovation in the nuclear steam supply system. But it rather is innovation and operations in sort of fuel design and fabrication. And in the basic sort of real world experience of how do I actually operate this plant on a day to day basis, that's a huge technological asset. And when we sort of changed the fuel, change the coolant change everything else, we start breaking down and losing the tech that we have developed by operating these plants, and are starting from more of a sort of blank slate. And that's that will maybe have advantages, but we have to be very careful to understand that we're gonna have to build that other real world operational tech up if we're going to expect these plants to operate a comparable capacity factor in economics.
I mean, this is reminding me a little bit in terms of, you know, the categories we're talking about, which are just, you know, we're still prone to making us human beings. You know, and talking about maybe the inertia of traditional technologies. I'm thinking about Vasilev SMIL here and describing the prime movers that we rely upon and how old they are how Well, the diesel engine is how old even the jet turbine is. And these are technologies which are miraculous and have had iterative improvements, and you know, increased efficiencies and things like that. But they're not fundamentally different. And indeed, we haven't really discovered a new prime mover. I mean, I'm not an expert on this, but I think in the last 70 years, so there is, you know, to someone who's looking to disrupt and for, you know, miraculously novel technology that's going to reduce costs or schedule by orders of magnitude. Nuclear, I think, like those other Prime Movers is going to end up being pretty frustrating.
Yeah, you know, I think a really good example of this to give you your industrial revolution example is, you know, we always like to think of nuclear power as the new fire. And it is right, as I said, it's like this, it's not doing the chemical interactions that underlie combustion, it's rather using strong interactions and the strong force to generate power. So if you just take that metaphor out a little bit, so you know, in, we have, as you said, in the industrial revolution, we had a lot of fire, right face combustion based processes. So firstly, the steam engine, and then and then so on. But you would never think if you built a steam engine, right, and you had a lot of experience building steam engines, and you're just going to trivially be able to build an internal combustion engine, but you're like, hey, these still both use fire, right, they're both using combustion, to basically run the plan. That's sort of like I like to make the analogy between a light water reactor and say, a Molten Salt Reactor, they're both using the same fire, that is nuclear fission. But the way they actually convert that into useful work that is used for an end use is very, very different. All the underlying engineering challenges are very different. And just as you would not expect to be able to just master building steam engines, that you're gonna be able to simply switch over to build combustion gas turbines, or an internal combustion engine, we should sort of take it that the same way that these are going to be challenges. It doesn't mean by the way, that the that just because we had really good steam engines in the 1880s. We shouldn't have tried to build internal combustion engines, we should, we should still try to build gas turbines, of course, just like we should still be trying to build these generation fortec. It's just that we need to be careful, I think, in understanding the relative levels of technological maturity of these different technologies have. I
mean, I think it's interesting and I make this argument in relation to commercial fusion. It's it's insane that we went from the Fermi pile and 42 to shipping port 14 years later and 56. Like, is that just a testament to the times we were in when the brightest minds you'd I think there's generationally, there's sort of the age of chemistry, the age of physics, the age of biotechnology that we've been pursuing through these sort of scientific peaks of interest, and it's brought the brightest minds in like, How can this be so sluggish when again, we moved from the Fermi pile the commercial nuclear power and just 14 years?
There's a couple of things going on one as you said, you know, if you think about think about these reactors, right, so we have the Fermi pile CP one Chicago pile one, we have, you know, EBR, one in Idaho, we have submarine, you know, the the, the sort of predecessor of the Nautilus, Pressurized Water Reactor being built in Idaho, we have borax one being built in Idaho, right? And what do these all actually have in common? Well, in many cases, all of these reactors, which were experiments, reactors were built by the same team teams of people are involved the same to think of a guy like Walter Xin. Right. So Walter Xin, of course, right, was at City College of New York in the 1930s. As a physics professor, he you know, Fermi comes up to Columbia, which down the block, and he starts working with Fermi and he's Fermi's right hand man in engineering. CP one Chicago pi one and then Walters in right then goes out of the Manhattan Project leaves the Manhattan Project becomes head of Argonne National Lab at Argonne National Lab. Xin is is responsible for literally heading up EBR one, you know, it was called Zunes, infernal pile, right? It's the zip. Right then he was also responsible for helping build out at Idaho and got into massive fights with Rickover but was literally on the team that was building the first pressurized water reactor and supervise the first building of the of the first borax experiments the first boiling water reactor, so not only did you have, in some cases, like a totally different governmental sort of idea, you know, support for building these experimental reactors, you had literally the same groups of people and the same teams and the same real world experience on how we're going to organize it organize laboratory teams to be building these new reactor types and you would just have the same people like you know, these grandfather's like Walters in who just birthing new reactor types over and over again. And and I want to go the one one more step we were forgetting every single One of these reactors came out of government research and development labs. And they weren't immediately tried, you know, and tried to make the first boiling water reactor, a commercial product immediately. What we built were x one through five, right? We built those tests, reactors EBR one, then we built EBR. Two, we even tried to go right from EBR, one and EBR to right to a commercial plant that was Fermi unit number one outside of Detroit. And that's a pretty disastrous operational experience. We almost lost Detroit being well, not really. Yeah, we had a core damage event at Fermi one. And Fermi one was incredibly unreliable as as a plant. What I'm not trying to say is that means that sodium sodium reactors will never be commercialized. No. What I'm trying to say is if we have to distinguish between a science experiment and technology that we need to learn and master versus a commercially deployable tech that has to compete against other power sources on an open market, and this is this is not really by the way. So if you want to go back to where you started this question, why did great British nuclear choose the light water reactor SMR Tech, I think a lot of this has to do with exactly what we're talking about the maturity of the SMR tech, whether it's a fuel, whether it's the operational experience of how you operate a boiling water reactor, a pressurized water reactor, that's not that far removed from the existing fleets knowledge. And one of the things that I will say about it's fascinating to me for the United Kingdom for the Great British people, right, is they rather uniquely right now having nuclear fleet that almost all about one operating plant is not a light water reactor, right. They have one light water reactor sizewell B, but every single other reactors, they are operating as advanced gas reactor a high temperature, graphite moderated gas cooled reactor, and they are not going to the next generation of gas cooled reactors, they are jumping back to Light Water Reactors because the experience of the age Yars Well, it's been not terrible by any stretch of the imagination, the capacity factor of the current EGR fleet is still not matching the capacity factors that we expect to the Light Water Reactor fleet. And even though we have all those advantages, you know, including higher temperatures, the Brits are saying basically, Hey, man, we're gonna go back to light water reactor because we expect that to give us better operational excellence that we've gotten out of two generations. Firstly, you know, the ATR but before that the magnox reactors of the high temperature gas cooled reactors. So I think that's kind of demonstrating the real value of the tech that exist in lightwater reactors, which is this half a century at this point of operational experience at commercial scale.
I think, you know, part of the reason I care so much about this, particularly in a debate, which tends towards conflict avoidance and all of the above ism, and listen, there's so many gigawatts, we need to build, let's just do a smattering of everything, whether it's renewables plus nuclear, even within the nuclear space, is this idea that like, we desperately need a win. And another loss is potentially hugely damaging, a dis coordinated approach is damaging, you know, nonstandardized approach, not learning from the lessons of successful lessons of contemporary and past nuclear build outs, you know, something that drives me crazy in Canada is, you know, in a province of I think, 800,000 people out in New Brunswick, not one, but two, again, back to the future reactors, or Gen four reactors are in some stage of planning. And again, this is a province that runs a single can do six unit, they run it terribly, unfortunately. Sorry, to my point, Lepreau listeners, I really hope that things can improve there. But this is going to be some center of miraculous innovation. When the French program at at its height with super Phoenix fizzled the Japanese program with Monju fizzled, in a massive state back enterprises that too, you know, tech startup companies are gonna be able to get it right, get it operate and get it economical, just seems so fanciful, that I wonder why it's still being taken seriously.
So I want to, it's a really interesting question, right. And I agree with you, in my mind, what the US knew what the world nuclear industry and maybe outside of Russia and China, let's put it this way, what we really need right now, as you said, is a win. And the question is, is what path do we take to get that win? And I think all of us are sort of realizing if we can get a couple of wins under our belt, then this, this world of the hundreds of gigawatts that we need to meet suddenly becomes realistic, that we're actually gonna be able to start building that. And I think there's a lot of people who think that throwing away the old tech and starting on something newer quote unquote simpler, a smaller is the way to do it. And I and I realized that this is a controversial perspective. I believe that actually the most likely change So we have for a win is using the stuff that we've already done, that we have all of the build experience in, that maybe it wasn't a great build experience, but we've done it, we've gone through it, and we've got the plant operating now. And most importantly, in some ways, when we turn that plant on, forget about the build experience, which is it's going to actually reliably generate power and be able to service the debt that accrued to basically build that plant. And that's really, really important. And you brought up super Phoenix, right, which for for listeners who don't know, was a French breeder reactor, a big 1300 megawatts electrical breeder reactor, huge in France that was built started in the 70s, and was finished in the 80s. And, you know, the French at this time, were really, you know, building a lot of nuclear, they had a very, very established, you know, nuclear supply suppliers and industrial capacity. They had a great educational system that was minting new nuclear engineers. And what happened in Super Phoenix is, in some ways, exactly what we would expect. But it turned out to be a disaster for what happened is when they first turned on Super Phoenix, right? It had months and months of outages, right in 1986, when when we first connected super Phoenix to the grid, right? It really had a capacity factor that was extremely, extremely low, right, I believe, below 30%. And we had major, major operational outages that were caused by, you know, leaks in the intermediate heat exchangers, right, we had oxidation of the primary sodium, we had cracks on the external fuel storage drum that basically was what you, you know, took the fuel assembly after you, you d fuel it into. And this caused huge amounts of outages, but the plant wasn't operational for literally a decade, right, in any two sets, it was going on and off. But and also it a famous incident, the turbine building literally collapsed due to heavy snowfall, which I'm not so sure you could blame that add on if you got a React new gen sodium reactor. But anyway, what this gave was huge amounts of opportunities for opponents of the Breeder Reactor program, even in a relatively pro nuclear country like France, to basically say this is in in, you know, just a money sink an absolute abject debacle over and over and over again. And so even by the time that they had really likely, you know, hammered out a lot of those kinks by the mid 1990s. And we actually had a run that was relatively at a relatively high availability, maybe even above 90%. The political opposition to this was so great that they killed the entire program. And super Phoenix was retired in 96, and never really generated very much power at all. And what I worry about what the lesson of super Phoenix to me is not that once again, we shouldn't try to build sodium fast breeder reactors, but we should manage expectations. And we should be clear that these experiment we should not expect when we first turn on these new technologies, that they're going to really, really perform like the light water reactor fleet does. And what I worry about is that we are not developing that infrastructure right now. Right? If you look at the budget of what just in the 1960s, the Atomic Energy Commission was just spending on new reactor development, we're spending in inflation adjusted terms, by 6364, even past the peak of new reactor develop for US billion dollars a year on just developing new reactor technologies at the AEC. Right and pioneering them and building them out in Idaho. Right. Right now, the entire that is larger than the entire budget of the Office of Nuclear Energy and the Nuclear Regulatory Commission combined forget about what we're spending on new nuclear reactors. So when we're talking about building a new technology like this, it does not have that operational experience. I would question to my venture capital friends, it's great that you're putting that money in. It really is, but how are you going to get through? Let's imagine you even get to the point where we're building the reactor, how are we going to get through commercially as a private investor? How are you going to justify to the investors that maybe put the money in to build that plant, you know, that couple year period where we're not going to expect the plant to work so great. And that is my concern right now, it is not once again, that we do not need these reactors. We do need these reactors. We do need disruptive startups going through but how are we going to actually do this on a full private model without government support, when it's gonna be very hard to get these reactors you know, to be generating a lot of power likely we don't know Maybe Maybe I'm wrong, and we're gonna turn them on and they're just gonna be perfect out of the box, but I don't think that has ever happened before.
I think just be because there's there's so much hype about, you know, liquid thorium molten salt reactors that we kind of have to go there a little bit. We've been talking a bit about the sodium moderated reactors in France and they're not mater sorry. Cool, right? Yeah. Oh my god, I knew I knew I had my sodium
thermal there are moderate like Hallum like that are graphite moderated sodium. Cool. So yeah. Anyway, sorry, my bad,
my bad. But I do appreciate the correction. Yeah. So in terms of the molten salts program again, I think one of the smartest anti nukes that I've come across MB Ramana. He does a lot of pushback on on SMRs and on on Molten salts in particular. But one of the points that he mentioned, and I think it's a fair point is similar to the steam we're discussing. You know, this is referenced as a hey, we've done it before, why aren't we just doing it now? You know, 225 outages only 58 were planned. You know, this is not mature technology, and I think, you know, belongs in national lab to keep working out the kinks and scaling up and scaling up slowly, before jumping to, you know, 300 megawatts gigawatt scale. I don't think anyone's talking about a gigawatt scale Molten Salt Reactor. But can you talk a little bit more about that experiments and maybe temper some of the expectations while preserving some of the excitement about you know, the end place of where this technology could belong?
So for Molten Salt Reactors, so just so for people who don't know what the idea of a molten salt reactor and I'm going to be talking here, not about, you know, like a Kairos like design where like, you have solid fuel but a molten salt coolant, but I've been talking about you know, a molten salts with a liquid fuel, right. So, what that basically means is that, unlike a, a nuclear like a classical light water reactor, or even, you know, a fast reactor where the, the fuel is solid, right, it's either uranium dioxide or metallic uranium or tribo. You know, sort of pellets. Instead, in in a molten salt reactor, what we do is we put the fuel in solution as a salt with the coolant. And there's been two examples really of this right, which, as you mentioned, one was the Molten Salt Reactor Experiment at Oak Ridge. And another one before that actually was also at Oak Ridge National Laboratory called the Aircraft Reactor Experiment, or the ARD, and the aircraft Aircraft Reactor Experiment was a 2.5 megawatts, you know, full power reactor, built in 1954, when critical in 1954, and was moderated. And here's the problem with that you remember how I was talking about or not the problem? Right, once again, I am not anti Molten Salt Reactors, but let's just go back and actually look at the operational experience of these reactors. Remember, when I was talking about before that what's you know, it's sort of like, you know, Dimitri Mendeleev, you know, eat your heart out a nuclear fuel rod is like, we're like, generating all these different chemical compounds constantly as fission products, or as your decay chain intermediates from those fission products as we go down the decay chains. So you literally have dozens and dozens of chemical elements going on. Now in a uranium dioxide fuel pellet. Generally, those are in a solid crystal lattice of some sort, that's basically keeping the sort of different compounds kind of all kind of fixed together in a solid, they're not sort of messing around interacting with each other. With a molten salt reactor as just an example. What we're doing here is we're taking that that all those fission products, all those decay chain intermediaries, and we're putting them into liquid, so in the liquid fuel, and they're all interacting with each other, which means that the chemistry becomes non non trivial very, very rapidly. And as one friend one time said, this is the most exotic chemistry that has ever existed on planet Earth in some ways. So we look at the, the opera, you know, and we've only built to my knowledge only to molten salt reactors that I just named, actually ever went critical, and actually turned on. And one of the more interesting things in addition to you know, the molten the Aircraft Reactor Experiment was 2.5 megawatts thermal, right. And it only the total run generation was 96 megawatt hours of energy complete. So if you just do that math, that means on a full time adjusted basis, right, the plant was literally running for an equivalent of 38.4 hours at full power. Now, it was actually running for a lot longer at lower power, but that gives you how little of a experience that we actually have operating these plants and then the Molten Salt Reactor Experiment, as as you mentioned, right, the full power outlet up put equivalent was still was much longer, right. We had about 9006 hours of full power output of coolant on the first run. And about 2549 hours on the second run. That's still in total, we're looking at less than two reactor years of total, you know, full full power equipment and just these two small test reactors and And what I will I will give you just to give you an exact example of what I'm talking about these unforeseen challenges, when we looked at the at what happened here with the Molten Salt Reactor Experiment when we turned it off, and it turned out the decommissioning of that plant was not easy. But it was it is done. To my understanding, one of the things that we found was some a form of corrosion called intergranular. cracking. And it turned out that it was causes in brittleness in the metal surfaces that were exposed to this fuel salt. And it turns out that the culprit of this in a brittle moment was an element called delirium. Now, delirium for those you don't know, it's atomic number 52. Right? It's a really rare elements about as rare on Earth as a platinum is. And it's something that we don't really know that much of the chemistry of, because doesn't really have that much interactions. We don't, you know, use it very much in some niche applications, where we make delirium in this sort of nuclear fission outcome melt, you know, Alchemy soup, that is the product of delivery, you know, driving fission products, and ensure that this delirium interacted with components of the piping in the molten salt reactor and cause severe, you know, embrittlement over the entire entire reactor exposures. Now, what is the lesson that I'm trying to get out of it, it's not that we can't solve to lithium induced intergranular cracking is that this was a completely unexpected, you know, complication of the reactor design that no one at the drawing stage or at the planning stage ever anticipated. And it could have been a very, very severe operational challenge, if we tried to bring that reactor, commercially, this is, and this is, of course, why we have national laboratories. This is why we run science experiments is to figure out what these real world challenges are, no one would have ever anticipated that delirium was going to cause intergranular cracking in the particular alloy that was using this piping, but it did. And that's the exact example that I like to give of real world challenges that you don't necessarily stumble upon until you operate the plant. And it's just not true that we've had that much operating experiences with molten salt reactors. There's two examples of this are a two reactors that have gone critical, I think the Chinese are building one more, it's not clear if it's ever gotten critical. And why are we saying this is just going to turn on and just be a complete, you know, walk in the park, and I'm sure I'm about to get a huge amount of hate about this episode, I have to say, I have just bracing myself for the hatred that's about to happen. But what I'm trying to say is I'm not trying to be a party pooper, I'm just trying to say, let's set ourselves up for success. And that means being reasonable and realistic about what the challenges we are going to face with with really new advanced reactor technology.
And then I guess for you know, we just finished last week or episode with the Jacopo von giorno about cost of nuclear based on the excellent MIT report. And what he was saying, at least in their, in their study, and their modeling is that, you know, 20% of the overnight build cost is in the nuclear steam supply system, or whatever your I'm not sure if they were looking at advanced, advanced reactor concepts. But in any case, the vast amount of the cost is in construction, I guess, charitably people making arguments for the rapid deployment of of Gen four technologies and molten salts, for instance, say, hey, it doesn't require all of you know, as much civil engineering, because it's not a high pressure system. What do you think about some of those arguments? Because, because otherwise, I think we're stuck with trying to attract VC money to some really boring stuff, which is like, let's, you know, generate, you know, incredibly excellent institutions, and incredibly well trained people that take, you know, 20 years to get up to snuff. Like, that's not something that's like a VC deliverable, I feel or something that sexy, or let's develop better steel bricks. I don't know what some kind of revolution or disruptive construction experience. And I think, you know, Jacob Post report also looked at, like, the productivity within variety of sectors and just how, you know, construction has flatlined or gone negative compared to sort of manufacturing processes. I'm getting too broad here, but reflections on on that that scrambled egg soup of a question.
So this, there's three things going on here. I think that we should do a couple of things. So the first is on the Civil Engineering bills, and in particular, you know, concrete reinforced concrete and that sort of issues in addition to improvement, excuse me, so the pressure thing, right, is generally what we can associate that in the first you know, if you first think excuse me, the first thing that we think about is well the wet you know, when you're building a nuclear steam supply system for analyte Water Reactor we're operating at 1000s of pounds per square inch in order to maintain the reactor you know, the reactor cooling system at at the at a high enough pressure that we you know, get to the You know, we get above 100 degrees Celsius for the boiling point of water, right. And you need that, obviously, for the thermal efficiency of the plant among many other things. So it really does require a huge amount of welding and very, very, you know, thick piping and, and it's not trivial by any and even, you know, things like, you know, the sealing of the reactor coolant pumps, all of a sudden is not a particularly easy thing to do. But we've we've mastered it. And so but that would be as you just said, as as Jacobo said, it's that's, you know, 20 to 25%, you know, 18% sometimes, depending on what model of the actual end Triple S costs actually have the actual power plant cost is actually the M Triple S, one of the hypothetical advantages that you can get out of, out of having a much lower pressure system is that, say, for example, the, the, the design of the containment building needs to be much less, or someone's going to be needed containment, if you're in a really advanced, you're gonna have what's called a functional containment, depending on your fuel types, if using something like tribo, right, we can maybe eliminate a lot or we reduce the price of the containment building, which is a major cost driver, and major costs that civil works, if you really improve that that's definitely true. I think it varies from technology to technology, and Gen four, but you know, it is true. And that's why I once again, I'm not anti Gen four technologies by any stretch of the imagination. But what I want to sort of turn back on you, though, is asking you the question about what yaka Post said about about, you know, the cost drivers, and now let's go back to the Light Water Reactor SMRs that we are building? Well, one of the things that was really, really interesting is if you look at, you know, the historical drivers of the low productivity in Western Construction, you know, which is hypothetically what these plants are designed to address, right, one of the problems that we've had, and in new nuclear builds is that just construction productivity has been very, very low, especially compared to manufacturing productivity. Well, one of the things that's really interesting is you actually look at the data and say, Well, okay, let's actually not compute on a megawatt basis, how much labor that you're gonna need per megawatt hour indirect labor, so like ignoring QA, QC, management, but just actually like craft labor and manual laborers building the plant, and then you do this math, and this really good peer review data, actually, from MIT, from Robbie Stewart, and Chris Sherman, and Jeremy Gregory, right, who really actually analyze this in a very, very rigorous, you know, sort of publication and got it published in nuclear engineering and design and 2022. What they found was, for example, for a BW or x 300, right, compared to an AP 1000, you need for the BW or X 302 thirds, more man hours, people hours, human hours, labor hours of direct labor, per megawatt electrical, than you would for an AP 1000. So here's an example of where I'm worried a little bit, right, we know for a fact that, you know, craft, labor and manual labor productivity has been low, the input amount that we really need, is going to be a very cost determinative thing, as Jaco was talking about, because, you know, that is a major driver, in many ways of, of construction cost is the actual, you know, getting the workforce out there getting enough people and so on. And we're choosing designs, that per megawatt electrical, are requiring a lot more labor, at least on paper, then than the larger reactors that we've had in the past. And what worries me about this is that this is a perfect example of why you generally try not to solve financial problems with nuclear engineering solutions, because each time you try to solve one problem by changing the nuclear engineering completely, we introduce a whole new set of new challenges. And what I would just like us to think about is let's look at the real underlying causes of cost escalation, and try to address them. And I'm not so sure, I'm not convinced that doing this with increasing the amount of labor hours direct labor, labor hours per unit megawatt is the right direction for our field, given the challenges that we have associated, that we've had historically. And that's what I'm, I'm just trying to put that out there. I love the BW RX 300. I'm very excited. It's getting built. I'm not trying to say we shouldn't try to build it. I'm just trying to say we should be looking at the cost and benefits that we have of these new solutions. And realizing that sometimes it's not all better. Always.
A couple of thoughts there, I guess. I mean, one is, you know, these these, you know, labor hours absolute versus relative, and I mean, you know, on an absolute basis in terms of getting that not in a megawatt hour basis, but just in terms of getting that project done, there'll be less labor hours and it'll it'll come on earlier. Another argument you hear is that Well, the SMRs will start producing electricity earlier than then a large build and therefore be more financeable and ultimately bill to pay back a bit quicker. I think there's a really absurd example of this, which is with new scale where you need to build an absolutely enormous civil engineering project and civil works to, you know, and you're starting to pay that off only, you know, 77 megawatts at a time as you get these units. And that almost seems to work counter to that argument. But do you do you have any sympathy to to that, that idea that, you know, you'll get operating quicker and be able to pay back your debts quicker, and that'll kind of make up for the difference?
So I, I hope that's true. And I think it probably will be true. But the thing that I don't understand about this is we have built in modern times modern large light water reactor designs very quickly, right? And I'm just you know, going to do you can, people who know me know exactly the example I'm gonna give a look at the advanced boiling water reactor builds in Japan, right, we were building those on the order of, you know, 36 to 48 months, right from first nuclear concrete to commercial operation, right. And the only difference is, is that we got 1.25 gigawatt electrical out of that are no more, a little bit more 1.3 gigawatt electrical, you know, out of each reactor built rather than, you know, 200, or 300, or 50, or 75. So, yes, I think that it is a good thing to go faster in building the smaller plants. However, I am not convinced that that is an intrinsic advantage of smaller plants, because we have obviously built and many times over large light water reactors as quickly. And I think in a world in which we can build small modular reactors fast, and we can build large Modular Reactors, fast, large Modular Reactor wins. And I think that is the challenge, what we need to be figuring out right now is, well, how do we build a large amount? How do we replicate what the Japanese did in the 90s? And in the 2000s, right, which is not long ago, this is not 1970? Whatever, right? This is literally, you know, I was alive for these things. I mean, very young, but, but I was in middle school, by the time the last ones were really being done, this can be done. And I think the question, the question I would like to ask you is, do you think it's more likely that we're going to be able to build a first of a kind, small modular reactor faster than if we tried to really figure out how to take a large generation three reactor that we've already built in already operated, and already had a running supply chain already had a regulator, if we really tried on doing that, which one do you think would be a higher probability of being faster, and my money would be that we could do better by bet by betting on something that we've already built, we've already gone through those kinks. And now we just need to input you know, institutionalize that learning and put it down to go faster. And the second thing I just want to be on honest about be clear about is that, yes, it's really great to get a power plant on very fast. But ultimately, that power plant has to be able to be competitive over 40 or 60, or 80 years. And that is ultimately if we're building plants very fast, but they're gonna be very, very, are much more expensive. Relatively, I think there's a trade off here that we have to figure out, and I'm not so sure we're paying enough attention to that trade off that we're getting.
So I guess moving moving towards closing here, you know, the biggest question, and maybe a bit of an unanswerable one. But I'm interested in your thoughts about this, because we've been doing a lot of, I guess, sort of diagnosis and working our way through the problem. Thinking about solutions. You know, particularly when it comes to finding finance, keeping the interest of VC VC finances, we also try and have a more organized, perhaps, informed direction coming from the state as well. How do we how do we get there in terms of the kind of the solutions that you're sympathetic to? What would that look like in terms of the not not the nuclear engineering solution to some of the problems we're discussing? But this question of, of, you know, if we, if we're talking about building large again, if we want to try and build another ap 1000 Again, and it's not going to happen? Through the loan program office, or something that's more top down or vertically integrated? Is there any kind of novel way in which to organize that or build in a focus focus on that question of constructability of institutional excellence, like how is that possible in the west or within the US in particular?
So I am, there's two, three things I want to say. Right? The first is, you know, I know I've sounded a little bit like a downer that is not about generation four and advanced reactors and even SMR. That is not at all my intent, right. I believe that SMRs are vital and that they will play a vital role in decarbonisation. I also think that Gen four advanced reactor technologies are going to play a vital role as Well, and to go to your question, what are the solutions to maybe some of the challenges that we've been talking about in that space? Let's start there. And I think a perfect example of this is, we need to see better advocacy for things that generation for, particularly in the fast neutron spectra, what they need, right, in order to qualify their plants. And, you know, the one of the answers I have for all of this is, you know, Idaho, I mean, it's Idaho baby. It's not just potatoes, like, like, so much of the modern reactors, technologies that we talk about today came from Idaho came from what is now Idaho National Labs was the reactor test station. And we really do need to bring back the idea of what we're talking about when we're talking about building advanced reactors, you know, building prototypes up at Idaho, is a really, really important thing. And, and that is going to leave the pathway in my mind to effective commercialization because you don't have the anticipation when you're building a government Reactor Experiment, reactor is going to be as reliable as a commercial plant. And we already are seeing some of the really smart, really great, you know, new reactor startups like aloe atomics, right? What they're basing it on is they're both pitching on the Marvel reactor, and the Marvel reactor is a test reactor that has been built at Idaho National Labs. And that way, they'll get that real world experience on a test reactor and be able to translate it into a commercial product, hopefully, but they're not anticipating the first of a kind reactor, they're not gonna have any operational, you know, challenges that we're going to solve right off the bat on the commercial private market. The other thing is, is just increasing the budget of Idaho and getting congressional support in the US, for example, for something like a fast neutron test reactor, you know, there was a proposal that both the Trump and Biden administration's had been behind, which was something about the versatile test reactor, which is gonna be a smaller version of the prism reactor that was going to basically be built at Idaho to basically had that fast neutron irradiation capability and test reactor capability that does not exist currently in the Western world. And if we're really going to be serious about building these fast reactors, that's a bare minimum, we really do need test reactors that can actually, you know, a radiates a fuel samples at a spectra that is, you know, somewhat comparable to what we would expect the commercial plant to be operating at. So I think that's a really, really important just sort of bare bones, let's set the table for having a successful advanced reactor market and development. And that does mean, I think a little bit more advocacy, especially as nuclear advocates become more numerous a number of pro nuclear advocates, and more sophisticated, let's try to build more, you know, advanced reactor experiments and build test reactors that really can pave the way for effective commercialization and commercialization that is likely to really pave the way for a commercially viable and successful project. product. The second question that you ask, is that, how do we deal with a large light water reactor problem? So I think there are a lot of policy issues. I mean, that could be a whole nother episode that we talk about. But one thing that I would love to just say at the bare bones is I think we have to have a little bit more of a data driven discussion about SMRs. And about what we're expecting out of them, where, where it makes sense to deploy them. And where there's some questions about whether when they deploy them, you know, right now, in the United States, there are gigawatts and gigawatts of new a, you know, large generation three reactors that have full licenses new that could start building from an NRC perspective tomorrow. And, you know, I am not necessarily the most critical person of the NRC. But you know, going through the NRC, combined construction, operating license process is way too long is a huge burden on everyone. Right now, we have gigawatts a plant at places like Turkey point outside Miami, where we have two new licensed ap 1000s That if we decided on an advocate for we could start building tomorrow the NRC has granted a CFL that is active and operational. And we should be thinking about these opportunities that we have to be building new plants right now. And just advocating and talking about it more and talking about the advantages of it. And having the difficult discussion that we need to have about what happened at Vogel, what happened at summer, and and actually had that conversation in a real objective way. Not in a way that is oh, it's the NRCS fault. It was you know, everyone else under the sun. No, no, a real root cause analysis about what happened at Vogel and how will it not happen again? And in my humble opinion, when I've looked at this problem, I spent months and months and months looking at what happened at Vogel, what I take away from that is yes, Vogel was kind of a little bit of a disaster, but my General takeaway is that all the challenges that we face would be unlikely, in some cases impossible to happen again. And that is something that I wish that we talked a little bit more about, we dealt with a PR challenges that's called a mat of Vogel and summer not by a nuclear engineering solution. But regular old PR, right, let's talk about explain what happened level with people take responsibility, but also explain to people why this will be different, especially when we have so many sites that the NRC has already given license, a full license to be in constructing and operating those reactor designs. And where we have, you know, reactors being ordered in Poland, to have that exact type, and we have the real world labor experience, let's try to sell that a little bit. Try to talk about it with pride, and understand that, that it's not, and not every solution is gonna be solved by a nuclear engineering problem. Does that a cop out? Or do you? Do? I just don't? Yeah, it's
gonna require think a lot more elucidation. But I think that that question of, where does the VC money go, again, with that psychology of disruption, and that bias towards let's find, you know, again, maybe Back to the Future Solution, but something very different than what is currently there to see if we can disrupt this age aged, slow moving technology, if what's required to get from the lab bench, or the laboratory to commercial operations is a lot more time in the lab, or the National Labs, that's not really a place, you're going to earn a bunch of returns for VC, you know, in terms of investing in the versatile test reactor, for instance, right? So how does VC are that that private capital that's wanting a nice return, get that return and stay interested in nuclear, if this stuff is still this kind of disruptive stuff that they're attracted to because of that base psychology is decades away, or at least a decade away in terms of getting to a reliable commercial operation where you can pay back the principal.
So you know, I think the model for this is biotech, right? So we look at, you know, biotech is a much, much larger venture capital market than the United then the nuclear, I mean, probably by an order of magnitude is about two. And that model is very much based on what the new in my mind, that's very analogous with a nuclear sort of VC model should look like, right. And that model, what you have generally is you have a huge amount of, you know, government funding here in the US like NIH funding, that is, you know, exploring the basic concepts, that sort of bench research that is happening, right. And then a scientist or engineer or scientist at the at a university will discover a promising, let's say, you know, signal transduction pathway where that through this, you know, government support, and it doesn't make sense, as you just said, for VC to just be supporting random researchers at universities. But what happens is those random researchers, right, and I've worked, you know, I've worked I've actually done a lot of biological research in my in my previous career, where they will discover basically a promising approach, right to say curing a disease or developing a drug, right. And it's at that point that the VC starts working on them with the commercialization. And what I think we need to be looking at is exactly like more like allos in the world, right? More were or project Pele, as another example, where we have the Department of Defense, basically building the first prototype reactors, and then we have companies like BW x, t, and X energy, we're going to be building those prototypes, we have been commercial funding to basically take them and commercialize those first of a kind prototype reactors. And that's, that's a really comfortable place, for VCs to be. It's a really comfortable place for the industry to be. And I think it would be really, really great because one thing the government isn't good at is commercializing technology, right, and we have this real ability to I think, work synergistically. But I think we do need to understand a little bit more, maybe a little more humility, and understanding that that generally, these things are very, very challenging engineering wise. And we are going to go into income, encounter almost guaranteed challenges that we did not foresee at the paper or planning stage or in our computer models. And it's just building in for that and understanding that, Hey, we should have maybe a matching model with the DoD where we have DoD put in some money, we have the VCs put in some money, and that those first prototype plants really are going to be a shared, you know, Endeavor between private investors and public backing. I really do think this is important for technology like nuclear, which really, really hard, I think to get it right the first time out of the box. And I think the VC, you know, injection into the nuclear space is fantastic. It's giving so much vitality and energy and getting young people so much more involved in the nuclear sector. I just think we need to do some policy tweaks here. Right to really make sure that we are, we are planning for what I think we all anticipate that the first reactors are not going to be perfect out of the box. I
guess the question is, and you know, any kind of analogy is imperfect. And biotech does take a long time, clinical trials take a long time. But at the end, you often get a win not often, but when you do, and you strike it rich, and you get a blockbuster drug, there's just an enormous payback on something, which is, that's the VC return model, right? Totally, totally. But you're producing, say, a pill. And that's, you know, nothing like a nuclear plant. And it's, it's, you know, mass manufactured and highly productive facilities. I just, I questioned your analogy there to the utility, that analogy just with, again, the slower pace of development and nuclear, and the end product that you're deploying and its ability to generate massive returns.
Well, I think this is where we do get into the advantages of some producing the micro reactor side and truly manufactured mobile reactors, right, which is going to be small, but those hypothetically could be mass produced, you know, it could have a manufacturing license from the NRC or not, they're not going to be like a small molecule or a monoclonal antibody or something. But they are they possibly could have not a once again, no metaphor is perfect. And I think, you know, this is a limitation. But they really couldn't be in a much more manufacturable space. And I think the question that we will have to ask is, well, what are the challenges that we're going to be associated with building those small reactors? And are they going and what are the applications that they're going to be in my mind, it's going to be unlikely, but other people very much disagree and very smart people, that we're going to have a world in which it's all 1000s of small little micro reactors lined up. I don't think that's what's going to happen. Right. But I think there's gonna be a huge application for micro reactors that remote, Off Grid applications from mining, you know, where diesel fuel is basically used right now for military operations as an example, for Forward Operating positions. I think there's a huge possible plays. And that's a very big market that could be disrupted. So I think, yes, there is a a analysis, you know, there is a breakdown there. On the other hand, I think that if we get on the larger space, if we really do get something that is systematized and productize, in the way that we can build and deploy it, and we can really get reliably three year or four year builds out of it, you know, we build combined cycle gas turbans, right pretty quickly, and they're 400 megawatt plants. And we we snap them together in a couple of years generally. So it's even faster than that, I really do think there is if you got into that place with a mature technology that really was able to do that, I really think we have the ability to have a VC like return right on that I'm just not so sure that that that first gas turbine, quote unquote, or that first reactor module that we build is going to be commercially viable. And the question that we as Vc, if you're a VC need to ask yourself is, well, what is the plan for getting through that death zone? Right, that that's something where the first product has been built. And it's having a lot of operational challenges that weren't anticipated. And there's probably a light at the end of the tunnel, but how do we drive through that tunnel and survive commercially through that tunnel? And what I would just say is that, you know, the challenges that we're talking about with some, you know, with these new they go from small to large, right, even the small you know, the the army in particular had huge programs in the 60s to develop really mobile like ML one, which was literally on a couple packs of a couple of trucks, right to basically build small little reactors to be deployed and Forward Operating positions for in the case of ml one, we start with ml one is at that plant never I think got above 60%, you know of its outright of its design power. Forget about anything else, right? We really saw major, major challenges with getting, for example, ml one from a design perspective done. In fact, I think an army study concluded that it was going to be 10 times more expensive than deploying diesel fuel for that first reactor. And so so what I'm trying to say is, maybe that no one technology actually I think it's pretty promising, but it's going to require a lot of tweaking to get it to a commercially viable position. And how do we as in a full private market, how do we fund that tweaking that needs to happen and keep that plant alive? I think one of the things I do not want to see happen and I'm worried about is the same thing that happens in so many of the large light water reactor builds where we abandoned the project or third or half of the way like a plant like marble hill or or oops 135 right for as well. Right where we literally just had these massive bulking or Cherokee right we have so many, you know, America is littered with half built nuclear power plants. And what I'm trying to say is, I believe in this technology, I believe that these small reactors and micro reactors are going to be incredibly important. My question to you is, and to all of us and I don't have the answer is how do we have a way and it could be government funding, that could be another alternative, where we can make sure that once we get through the hard stuff and build that first one, we have the anticipated operational challenges? How do we see it to the end to actually finish that commercialization process? Right, right.
We should leave it there. But just just one more question. And this, this doesn't apply to you know, the potential higher value applications or products of nuclear like, like process heat, but that challenge of you know, getting a big return on something which is undervalued, which is baseload reliable electricity, which is, you know, obviously not rewarded the same way that a natural gas plant is in a competitive market. It is interesting to start seeing, you know, especially with the thoughts around how energy intensive AI is going to be, and, you know, Microsoft looking for potential PPAs with nuclear citing nuclear micro reactors that server farms. I mean, baseload is kind of cool, it's back, both, because we realized that it's not a myth, but also there's value to having really reliable electricity. And that value is higher, as we head into, you know, increasing grid fragility. But yeah, in terms of that question of, of, is producing baseload just such a disadvantage to nuclear in terms of generating, you know, good returns in current market structures.
So I think one of the really interesting things that we have done, from policy perspective in the United States is introduce sort of put on a more level feeling than ever level playing field, excuse me than ever before nuclear generators, alongside renewable, you know, so called renewable generators, on basically giving the economic incentives and one of the things that gives me the most hope, about actually doing this problem is the production tax credit that we have built into the IRA, right for new nuclear generators, as well as existing nuclear generators and that PTC right, it, you know, gives basically, in in a big incentive, if I may be so bold, for nuclear baseload to be built, because at $15 per megawatt hour, a PTC your you are all of a sudden, you know, if you're able to consistently, you know, rack up those megawatt hours, well, you're just gonna get a very, very big rebate check at the end of the day, even if, right, the wholesale power markets aren't properly valuing your price, the price of the reliable baseload power that you're generating, and it's one of the reasons why we've seen this work, even in a state like my own, like New York State, right, which is a deregulated power, so forth, deregulated power market operated by the New York independent system operator, but even the small plants like gunay, upstate, which is like a couple 100 megawatt little solo two loop pressurized water reactor has been kept online, even in a very highly competitive wholesale power market, by you know, a state PTC that was put into place. And I think having a federal PTC is really going to change the name of the game on actually making nuclear power competitive. Now, in all honesty, we're kind of begging the question, the better question we should be asking ourselves is, well, how do we redesign our wholesale power markets, such that they properly value the price of firm, you know, clean bulk generation? I think that is another whole nuclear advocacy, you know, maybe it's some sort of tax credit. But I think we really do need to be looking at the market designs in the deregulated markets, of how we're going to properly value this because I think it's becoming increasingly clear that our current models, especially in a place, like an energy only model, like ERCOT, like in Texas, where we don't have any capacity market, really, we're not properly valuing the social and economic benefits, actually, of having reliable clean, baseload power. And I think that, you know, maybe a PTC is a little bit of a band aid for that. But we do need to figure some real serious ideas about how we reform the market structure so that they properly incentivize that in a deregulated power market.
Now, I'm gonna think of a lot of ways there's there's never been a better time to build nuclear in America with with the PTC, you're talking about with an investment tax credit that I believe you build a nuke on a brownfield site with union labor, prevailing wage, and with a domestic supply chain, you're up to something like a 50% investment tax credit you've got so PTC its LPL has billions to shower so I get this kind of frustration with a why the hell isn't that happening?
What's the euro? I think, I believe and don't quote me on that. Well, I guess I'm on a podcast that will be quoted, but I believe that the I'm not sure if I think you asked me to make an election, whether the ITC or PTC gets chosen for a new nuclear project. But as you just said, If you build on a coal power plant site in the United States, and the good, the good and bad things about a nuclear project is that the prevailing wage standards, for example, you'll never not be able to meet those prevailing wage standards in a nuclear power build. So don't worry about that. And typically, the domestic components stuff because it actually works out, you will literally get 50% of the price that you build in not just overnight costs, including financing costs, right on the day you commit, you know, you commission your plant, you'll get 50% back. And if you're a Muni, you'll get as a tax credit, which could be, you know, sold on the market is transferable, and you'll get 90% 80% on the dollar. But if you're a municipal utility, you will literally get a cash refund back from the IRS, right for 50% of your power price. So just think about this, we have now just without doing anything, right? We split in half the total construction costs of a nuclear power plant just by doing that. And that is a perfect example, when I was talking to Chris about us talking more as nuclear advocates about not waiting five years, 10 years to the next, but we have licensed power plants. in multiple states, we have something like close to a dozen gigawatts of new nuclear capacity that had been granted full CLL. Some of them have been terminated by the licensee, but could both probably be relicensed pretty quickly, that have been fully licensed by the NRC. They've gone through all their hearings, they have an environmental impact statement issued, right, we are literally their turn key in terms of construction. And with a CFL you don't have to have another AFLP hearing and atomic safety and licensing board hearing. Right for operations. Right, you don't need an environmental impact statement. All that is done. The siting is done, the hearings are done, the EPC is planned out, we're there waiting to be built. And we don't talk enough about them. And I think part of the issue is the SMR mania, or they're not SMRs but that's a pretty damn good thing to try to start building. And, and I think sometimes we've so sort of gotten fixated on SMR it's, it's once again have their place, and are gonna be very important technologies that we've forgotten the little, there's little sort of giants that exist in our in our midst that really could be transformative for getting those first couple of new builds out, I'm kind of saying let's crawl before we walk before we run before we run a marathon. And if we want to get into a place where this industry can really deliver for its customers, which it needs to couple 100 gigawatts of new nuclear capacity. Let's start on what we've done before and try to translate it and choose these sites, which now has literally zero regulatory burden in terms of getting a licensing and an environmental impact statement. Obviously, they're gonna have to go you know, their construction will have to go through the CRP construction reactor oversight program to be monitored, but we really are in a good place on that. So that's my, my own lesson. My lesson is like give some give the large Modular Reactors a little love. Let's give them a little love. Let's talk about them more. Let's understand their benefits as well as their disadvantages. Just like when we talk about SMRs we should talk about their benefits and their disadvantages. That's all I'm saying. I'm not trying to put you know, rain on anyone's parade otherwise.