Welcome back to decouple and to Crillon Stein episode two. For those of you who tuned in last week, let's do a brief recap. James came on and recounted to us the illustrious history of the US nuclear build out. And its idiosyncrasies. It was a big learning case for me some really exciting and interesting anecdotes, the good, the bad and ugly, what went well, what didn't, we kind of wrap that up with a bolt case? For the AP 1000, where James was talking about, you know, this was news to me that there's a number of sites that are kind of licensed, perhaps you could build an AP 1000 on them tomorrow, we might expand on that a little bit. And we also started to look at where things are headed right now what the path dependencies are, we talked a little bit about the role for SMRs, the rationale behind them, and that having a lot to do with finance. So I want to just kind of pick up right where we left off and dive in. But this episode, when we're looking at the past and the previous one, maybe turn identifying some patterns. And you know, in relisting to that episode, what I look at and what I understand about plans moving forward or path dependencies moving forward looks like we could be repeating a lot of a lot of similar errors. So we titled that episode. What do we titled again, those who are those or do not learn history or failed to repeat it, something like that. Anyway, James, welcome back. I'm about to jump on a flight to head out to to a conference at MIT in Boston. So my apologies to you and to the listeners for being a little frazzled and unprepared but wanted wanted to have you back on urgently. jigger Shaw is coming on August 8. So it's going to be I think this is gonna be an exciting prelude to that, that interview, talking to the man with some of the purse strings involved. And trying to, you know, in good faith, argue for what we feel makes the most sense how we can do nuclear Well, I've been, I've been referring to nuclear recently as kind of like an Olympic Games. And like, you need your athlete to be absolutely dialed in, you know, on their nutrition on their sports, specific training, on their physiotherapy, everything needs to be dialed in. Because if you show up to the Olympic Games, you know, fat and out of shape, it's just an embarrassment. And so with that, and Chloris analogy in place, I'll hand it over to you in terms of picking up where we left off.
You know, it's funny, you compare it to the Olympic Games, I sometimes compare sort of what's going on with the nuclear industry is sort of I call it industrial ADHD, it's sort of this idea sort of that we how do we want to say it like, we we just did something incredibly hard and incredibly difficult. And we it kind of beat our ass a little bit, excuse my I don't know if I can use
that that's kosher.
But it beat her ass. And now we want to do something completely different, right after the point where it's sort of easy, like, like, like, like a student who just finished a big report and now is is distracted by the next shiny object. And the real point that I think we're in, in the terms of the nuclear sector today, is that a really transition point today, actually was the data at Vogel three entered commercial operation in the United States, the first ap 1000. In the US, I think, the fifth ap 1000, globally, that has entered commercial ops. And what I, we talked a lot last episode about this sort of buffet of different reactor designs, different approaches to building nuclear power plants. And then we took that buffet, and then we operated it for, you know, a couple of decades. And what I like about these evolutionary generation three generation three plus designs is what they did, is they took the best, the best of sort of the hits of that buffet, and then condensed it into a new power plant design, that that also had some evolutionary improvements, particularly on the safety side. And the safety side, we'll talk about I think, which is really interesting. We talk a lot about how it improved safety, actually. And it does, it reduces, if you look at say the AP 1000 probabilistic risk assessment, it says it's basically 100 fold less likely to have a core damage event like a meltdown event, then the existing very, very safe generation two plants that are operating today in the United States. And that's great, obviously, and it's a great selling point. But the real thing that I think really happened here in what we did, particularly on the AP 1000 And these passive plants, is actually make the safety simple systems much simpler and much cheaper to build at least hypothetically. And that is actually one of the big advantages of passive safety. Yes, it's actually safer, I would argue, and it doesn't depend on external power or even emergency power. Like and obviously it was a big problem at the Fukushima you know, incident, but it also dramatically simplifies the system. terms that are necessary to do that. And we can go a little bit into that. But what what I look for when I'm kind of thinking about it, and I'm a small c conservative when it comes to nuclear power plants, and I think this is where Ontario to you guys credit have have really gone so well in going in the technology that people are familiar with, that the regulators are familiar that the operators are familiar with operating. And that's what for your guys, it's the CANDU. And I think for the United States, to be honest with you, it's going to be evolutionary versions of the pressurized water reactor and the boiling water reactor that I think I see in the future. And then in the near future, really being the major poll built out. So there's a couple of different avenues we can go on, we can say why like to 81,000 for licensed sites that are ready to go today, if we wanted to build an AP 1000 in the United States. And sort of why I liked this design so much, and why I think it's sort of based on the Vogel and summer experience, kind of gotten a bad rap, even though it's a pretty amazing and I would even dare say like, kind of cool and sexy design?
Well, I think it was, again, a probably from a non recorded part of a previous conversation where he talked about the nuclear string being champions of finding technical solutions to non technical problems. And I think some of that is the sort of chasing of even greater safety margins. But the other is this idea that maybe we're off course, maybe, you know, boiling water reactors, pressurized, heavy, heavy and light water reactors. You know, we're just a step along the way or maybe even there was a conspiracy, you know, with Rickover. And we should have gone with with some other chemistry or technology. You know, you mentioned I think General Atomics pursued a high temperature gas reactor. Is there a reason? I mean, do you read this in conspiratorial later? Is there a reason why we don't see breeders and Molten Salt Reactors all over the place? Are they just a harder technology to innovate? Or, you know, are we ready to just ditch? You know, and I'm playing devil's advocate here a little bit, but ditch sort of what we know, to embark on something that's better?
You know, look, I think there are a lot of applications that we're going to need to have nuclear energy serving that light water reactors, pressurized water reactor, boiling water reactors, or even your non heavy water reactors, that you can use are not going to serve and like process heat applications, for example, are gonna be really hard just because a pressurized water reactor or light water reactor operates, you know, give steam at 300 Celsius, maybe max 315 degrees Celsius, it's just not hot enough for a lot of the process apps. And in that case, for process heat applications, we're going to need new technology, I think looking at where the fuel cycle is going to go. Assuming we build out a lot of nuclear power in the future, we're going to need new technology. What I'm talking about is what can we deploy today. What is the stuff that in the next couple of years is going to be able to deploy commercially and not be research experiments that are ready to go I am all for us advocating for research for in molten salt in liquid sodium fast reactors in high temperature react gas cooled reactors, I think we really, we really need to do that. What I'm talking about is commercially, I'm less convinced that those technologies are really ready to deploy now. So just going back to your question, was there a conspiracy? I don't think there was a conspiracy right against it. I think there was a couple of coincidences of history that we really started investing a lot of the money in the these two technologies and PW RS and BW Rs, but remember the first real nuclear power plant in the United States in arco Idaho EBR. One experimental redirector number one was not a pressurized water reactor or light water reactor. It was a liquid Sodium, we are actually having a sodium potassium eutectic fast reactor right. That and we've seen other as I said, there have been two different commercial nuclear power plants in the United States Peach Bottom unit number one in Pennsylvania, and Fort St. Vrain. In Colorado, that were high temperature gas reactors and of course, internationally. We've seen both in France, right they before France in 1970s, went to the pressurized water reactor, they had their own indigenous gas cooled reactor technology, as of course, the British and every nuclear power plant operating today in the United Kingdom with the exception of one is an advanced gas reactor. It's a high temperature graphite moderated gas reactor. Even in the Soviet Union, and in Russia, we have a liquid sodium Fast Breeder Reactor program that's commercial. Right at belajar square. We have 600 megawatts, 800 megawatts now even a bigger liquid sodium reactor that's going to come online. And what we see just in all those cases is we don't see them saying we're never going back to Light Water Reactors. In fact, in the British case, we went from the advanced gas reactor, which is the current one and the magnox proceeding that now the British builds are all in the immediate future going to be light water reactors. Same thing with the Soviets with the Russians. Excuse me. I'm being a little bit annoyed. mechanistically but the Russian program right is heavily heavily on their pressurized water reactor, the vivre the VDE, are not on the on the bsnes, which are their liquid sodium fast breeder reactors. And they've been doing this for decades and decades. So what I'm trying to say is not that these technologies in the future can't play a very, very important role, I just don't think they are as technologically mature, as we need it right now in the nuclear sector to be right, where I really think what the nuclear power industry needs to demonstrate in the western world is that we can deliver plants on time on budget, that then when they operate, they operate superbly, and that they're not science experiments, they're boring, like you don't hear about them, because they're just they're just chugging up power 24/7. And what I would like us to see is focused on developing and maturing those other advanced technologies for those applications where we really need them.
Right. You mentioned a couple a couple of examples that are Russia, that DVR is there were of course reactor that they've standardized over time. And this is the one that they're printing out locally, and is running their, their export market, China, you know, after sampling the buffet lunch of, you know, basically everybody's reactor design, except for they didn't want the Japanese obviously, because of some underlying tensions there. There's a few reactors they didn't sample, but, you know, they got the candies. And now, you know, they have sort of a side research project. I think they even have a, you know, molten salt reactor and operation they have a high temperature gas reactor and operation, you know, but these are, as you're mentioning kind of side projects. I'm not sure if Korea's analogous I mean, they seem to have standardized on the APR 1400. And they are doing some, you know, SMR research and things like that, but they have a workhorse which drives the industry generates the credibility generates, I don't know, the revenue, and then these these side research projects in the States, that seems to be kind of the inverse, you finally standardized the reactor down to the AP 1000. And now, you know, I guess you're diagnosing this as kind of sectoral ADHD, we're on to looking at a plethora of other designs. Now, in our last episode, you mentioned, you know how this all began a lot of governments stewardship with initial r&d, and then involvement of the private sector in deployment, you know, three or four different EPCs and technology companies coming out of this, I should say technology companies, probably lots of EPCs. But these are technology companies that did more than just nuclear, they didn't just come into the game with a reactor design. I'm not sure if general logic at the time was making like washing machines and every domestic appliance you can imagine and everything else, but what strikes me is quite different here, again with Jennifer Granholm is tweet, which I haven't found, but we'll keep trying to keep on referencing is this idea that, you know, that's how the Russians and the Chinese do it, you know, big state involvement, picking a winner. In America, we do things differently. I guess I'm just curious about sort of the psychology, like what is distinct because this seems to be seems to be having a pattern that's repeating itself, again, in America with this kind of Renaissance or a new sort of nuclear age dawning on us seems like a lot of the stakes have not been learned and maybe replicated, but with actors who are much less credit credible than like 1950s or 1960s, General Electric or Westinghouse or
Yeah, you know, I think as you you're alluding to, right, the the four the big four nuclear steam supply system vendors that that built the US operating fleet, so Babcock and Wilcox, combustion engineering, Westinghouse in General Electric, all four of them at the time were powerplant manufacturers that made fossil their main product lines especially when they first started in this were power were fossil power plant equipments. GE Of course, you know, was founded and co founded by Edison, Thomas Edison, right to make power plant and grid manufacture, you know, great equipment and then spit it out as you're talking about two electrical appliances but their bread and butter was building power plants. And the equipment that goes into power plants. combustion engineering, as their name implies, was not initially a nuclear power plant company. This was a company that had built a very specific type of fossil boiler Wright had huge expertise in steam engineering and building steam thermal power plants, Babcock and Wilcox famously invented a new type of, of coal boiler in the 19th century and has been going on from the steam age, all the way through to the nuclear age. And, and Westinghouse, right was George Westinghouse and Nikola Tesla. And yeah, the Westinghouse, you know, they had a lot of work in railroads, but they were a huge industrial company with a massive steam turbine business. And we're in all sorts of issues, then that might have been, just to be frank, why that might have been the historical facts that led us to the Light Water Reactors, to these sort of analogous systems that look a lot like a big fossil plant, maybe a lower temperature, less efficient fossil plant. But regardless, there was a huge amount of industrial expertise in building those sorts of thermal power plants that led to that foundation that we got into, but I think to your point, what these companies He's had and we can't under underestimate this. They had been building coal and gas and oil fired power plants for decades. And they had the experience of how actually things work in the real world. And there's this great memo by Hyman Rickover, 90 from 1952 or 53, about the paper reactor problem, that no matter what happens, every reactor on paper looks better on any rate than any reactor that's ever been built. The second you actually tried to start building it, you encounter all sorts of real world challenges that were part of these unknown unknowns, you didn't even know that this was going to be a challenge. And that became a major, major source, source of costs, drivers of schedule overruns, that just you weren't able to anticipate until you built it and got that operating experience. And that's why I really do think that the industry got it right the first time right in the 2000s. In generating these third generation lightwater reactors that were based on decades and decades and decades of operational experience that we had in the existing fleet, and also manufacturing and building them, we didn't execute them very well, the first current time, but now is the exact the best time. I mean, that's why it's so bullish here is that we got the constructability experience, let's capitalize on it, let's not let that go to waste.
So I mean, it is interesting, there is a plethora of reactor companies now, many of them which don't look like combustion engineering, or Westinghouse, or GE, interestingly, the kind of SMRs that are kind of maybe surviving the Hunger Games here. I mean, we're still early, none of them are actually being constructed or deployed at yet. But there's plans, you know, GE Hitachi, Westinghouse, these are companies that again, have that credibility of, you know, having built large industrial projects of having a broad array of technologies and product lines of actually doing things. And then we have, like, I'm not sure I think new skills, this is a startup that's completely centered around building reactor design. Oklo similarly, like this, that's a very different model. And, you know, a lot of the, the hype is around SMRs as well, you know, they can plug into smaller grids around the world. But, you know, countries that are new to nuclear are unlikely to want to sign a deal with a startup company, rather than a state entity like Russia who's going to take care of you know, all of your you know, fuel cycle needs as well as financing building the reactor etc. Like, it just it seems like there's been a lot of naivete in the last like 10 or 15 years where other than Bogle the West hasn't been building anything. It's a great time to imagine. But again, the Hunger Games are coming and we're seeing things getting paired and whittled down, people are still playing pretty nice. I'm seeing in the in the discourse, like no one's yet. Yeah, casting a lot of shade on anybody else's tech. But I wonder if that's coming soon.
So you know, I think the real question on the grid, you know, I hear a lot of the discussion about SMR is right, I'm, you know, building a gigawatt scale plant or two gigawatt scale plant, if you're gonna run multi unit large Modular Reactor. That is, you know, there's a huge grid issue here, right, you can't just pop that down randomly without building a huge amount of transmission infrastructure. But I think for the United States, in particular, where we still get a nontrivial portion of our power from coal, and historically just continues to go got a lot more from it. There are so many sites in the dozens and dozens of sites in the United States that you would not have to build a single new, you know, foot or meter of transmission lines to just plop in one or two gigawatt plant. And you know, when we're talking about what we're talking about in the US, let's let's keep that as an example, with the Department of Energy is even saying with, with as aggressive of renewable wind and solar build out that you can get, right, we're probably not gonna even come close to it to reach our decarbonisation goals, we're gonna need probably around 100 to 200 gigawatts of new nuclear capacity. And I'm sorry, there's no way in which we are not going to have to build some new stuff at new sites to do that. But the whole point is, there's a lot of low hanging fruit right now that we could deploy a dozen or two dozen new reactors at a site that already has all the transmission there already has a circulating water infrastructure, or at least access for cooling needs. Let's focus on what the easy stuff is, let's let's try to crawl before we run a 10k marathon. And that's what I'd like us to look at, let's take a design that is built on an evolutionary understanding of 70 years of operating light water reactors and sort of perfect that to the best of every everyone and sort of tried to put it into one design with evolutionary simplification of the safety systems. And built we have a regulator that is now you know, experienced in that regulatory process, and we have a construction and work crews and a supply chain that actually has done it. And more importantly, as we're seeing right now, Vogel three is supplying is at 100% power, citing more than a gigawatt of power and powering Georgia House is in homes. And we have four reactors in China that have had a remarkable, remarkable experience of just being super reliable, especially for a first of a kind design. And in doing that, that is to your question, if you're thinking about building a new nuclear power plant, what are the advantages the Chinese and the Russians and to be honest the Koreans have is they can say, you know, when Baraka was built, they could take them to an APR 1400 That was operating in South Korea. If you're building a VV er, you can go to an operating VV er, while on one, the sort of standardized three loop Chinese pressurized water reactor, there's an operating qual on one, right, and you can go and see it. And it's not just vaporware. It's not just a paper reactor. And I would like the West, we should not abandon by the way by any stretch of the imagination to developing SMRs. They have really important applications generation for technology's incredibly important, but that we should be understanding the level of technological maturity that these various technical options are, and why now we need to prove that the nuclear industry can at least deploy tech on time on budget will have great operating characteristics once they're done.
So what what do you make of plans? Like? You know, I think it's line ash of the TVA talking about 20 plus small modular reactors within the Tennessee Valley Authority mean, you're getting I know you were saying earlier, that's in terms of you, I think your your interpretation, the fundamental driver of the SMR logic is utilities afraid of being bankrupted by, you know, large capital projects? I guess this is a potential to sort of feel it out, see how it goes? I mean, how do you envisage those first deployments being it sounds like this technology is going to be fairly reliable, we were coming off of a long experience with it. But just in terms of the economics, I imagine those first units are not going to be that economical, both some wrinkles to work out in terms of the first of a kind nature of them, first of all, kind of construction, but also, you know, just them not not conforming to economies of scale.
Yeah. So I think, you know, the TVA is focusing on my understanding for the initial deployment on the same point that OPG is also Ontario Power Generation in Ontario is also focusing on, which is the BW RX 300, from General Electric, Hitachi. And, you know, I think a lot of us, it's sort of our favorite small modular reactor right now that's ready to deploy. Just because the BW RX 300 is a very big, it's about as big as you can get as a small modular reactor at 300 megawatts electrical. Right? It is based on a lot of evolutionary technology, although there is some differences there. And the big question that we have to all ask is, is the beat of your x 300 going to be able to compete economically with a large reactor as we start building more of them. And the whole point I want to make here is if you're building 10 gigawatts of new nuclear capacity, well, that's either 10 ap 1000s, maybe a little less, or that's gonna be 30 BW x three hundreds, and that's about as big as you can get. And it's not clear right now, if the economics the economics may actually favor the b2b x 300. Let me just be clear, there is a very recently published analysis of this by Caruso, Chevron's group at MIT that really argue that it's not actually clear, maybe in some cases where your labor constrained the x 300 may actually beat the AP 1000 economics just because you don't need as big of a workforce at that site. However, I have to say, I'm a little bit skeptical that the x 300 is really going to be able to compete with the AP 1000 If we look at one of the biggest drivers of cost overruns in nuclear plants, so we call it improvements, you know, the civil works, it's, it's sort of digging down and getting pouring a bass mat getting that that, you know, that rock inspection done, the bedrock inspection done, and really doing that sort of fundamental work of laying a foundation laying mud mats. And and doing it that's very challenging and very expensive. And doing it to the seismic qualifications as necessary for a nuclear Island is very, very technically complicated. And when I look at the x 300, I'm looking at a design that sort of takes that and says, you know, hold my beer, right? It's like saying, basically, we're gonna build for 300 megawatt plant, we're gonna build 150 foot 50 meter deep, a shaft that is 30 feet in diameter, or 30 meters in diameter, 90 feet in diameter down and seismically qualified the entire thing. And us maybe we're not sure yet, but maybe use a novel technology called Steel bricks, to be able to actually lie in that those walls and then build the reactor building and containment within that. And that seems, you know, like a very technically challenging, you know, improvement to be doing and quite intense. And at the end of it, you're only getting 300 megawatts. You know, when I was at the SMR Conference in Atlanta, I was speaking to an old shop, stone and Webster engineer who had built a bunch of plants. And he was sort of scratching his head at the BW RX 300. And he said, we kind of looked like we've taken this the hardest part of in some ways, not the hardest part but one of the hardest parts of building a nuclear power plant. And we've made it well, not easier. Let's put it that way. At the end of that process, you're only getting 300 megawatts. So the question that we have to say is, can we really get that process down? So much that it actually beats out? Say the, you know, bap 1000? I'm not so sure. I'm convinced. Yeah.
I love this. I love this. So what's the rationale for going deep like this? Is it partially to reduce the amount of concrete needed for containment? Is it a safety measure? I understand it's because of national circulation need a really, really long RPV reactor pressure vessel? Like what what is? What is the rationale because I see a lot of it sounds like a lot, a lot of these kind of three plus designs are requiring pretty major modifications of existing plant architecture in order to accommodate these safety margins, which maybe are nice, but are certainly driving costs and decreasing constructability in my very amateurish outlook for specific to the x 300. What's the reason?
I'm not a GE Hitachi engineer, and I don't mean to speak behind the motivations behind that particular design choice. And I'm not going to but what I will say is, there's some you can guess at a couple of things that they're doing. One of the things that has been an issue in getting SMR is really deployed and large reactors is the aircraft Impact Assessment rule that came into force by the NRC in 2009. And that basically requires after September 11, the idea that a nuclear facility needs to be able to demonstrate that it can withstand an impact of a large commercial jetliner intentionally flying into it, and still, you know, protect the safety and not have a, you know, not have a core damage event occur out of that with with high confidence. And this has actually been a major problem with the new scale design, as you may know, which is this really small, you know, initially it's 55 megawatt, electrical, little power module. And now we had to build it into the world's biggest, most expensive swimming pool. And that swimming pool, the reason why it's the biggest and most expensive is to be able to comply with the aircraft Impact Assessment rule. And I would imagine that what g h and I'm not, this is not based on any insight I mentioned, one of the factors that went into is how do we comply with this rule, without getting to very exotic concrete steel shield building designs, which actually became a problem with AP 1000 it with revision 19, at the DCD, so So I imagined going underground is pretty nice to withstand a A aircraft impact. And I imagine that has a lot to do with it. But I'm not so sure about what was going on in that. And it does. And I've seen you know, if you talk to GH, they'll say this is a very, very simple, relatively simple civil engineering process that we do all the time they're doing to their immense credit. They are working with a EPC called Black and Veatch, and they're doing a demo, a scaled demo of this constructability I believe it's actually happening at the Clinch River at the TVA Clinch River site. And with a lot of government money to do those construction technique is a demonstration of how we're gonna actually build the shaft. But I just want to say you know, anything about simplifying concrete, we've already the AP 1000 Audience drug takes dramatically less concrete per megawatt electrical than a than a, you know, generation two pressurized water reactor or even boiling water reactor. And same thing with you know, just simplification of the system. I mean, just to go back to the AP 1000, we have 50%, safe, fewer safety grade valves in the AP 1000s. Compared to a gen two, we have 35% fewer pumps, we have 85%, less 80%, less safety grade piping, we have 45% Less seismic building volume and 70% less cable in the AP 1000. And despite that, we didn't just hit the AP 1000 out of the park, it kind of shows this sort of the paper reactor issue that we have all that simplification, that is great. And that really can in the long run, be able to get us to a much more deployable constructible design. But it doesn't guarantee it. And if you don't get the the basics correct, no matter how simplified your design is, you're not going to be able to just deploy these these power plants sort of willy nilly and turn a key and get them built. It's a lot of this is the practicality
was as I understand it, it's a pretty fascinating history, because the AP 1000 was originally the AP 600. And the way to justify cranking out a reactor with a smaller economy of scale was that it was so modular, it would snap together, we'd get construction done in like two and a half, maybe three years. I think I remember seeing some promotional material like that. I mean, it's an extraordinary history. And now we're getting into the AP 300 It's just a gimmick or mindset, but what kind of numbers to put after the letters.
Once again, you know, I think the AP 1000 Also, it's actually not that much larger than the AP 600. But it hasn't, you know, it's almost double in size, in terms of power generation capacity, but the actual physical dimensions of it are not that much larger. But one of the things that I think what's We'd heard about this the AP 600. I think the reason why no one bought it, even though it was designed certified was because it was looked at as too tiny. And I think we're kind of going in the opposite direction now, which is interesting. And I do think, you know, to go to foreshadow something I would like Jakar Shah to talk a lot about, and then we all can actually agree that probably a large Modular Reactor, you know, when we're talking about deploying gigawatts and gigawatts and gigawatts of new nuclear God hope that's what we get to, you know, a small difference in the actual, you know, price per megawatt hour is going to translate to billions and billions of dollars in difference in the cause. So us figuring out how we can deal with those, those that non technical problem, which is the project risk is the system risk that building a nuclear power plant and the current way we finance new power plant new nuclear power plant bills in the United States, how we can deal with that market failure, it's not a technological failure, it's a market failure of figuring out how do we finance these plants in a way that actually utilities will be willing to order them. I think we've spent too much time trying to nuclear engineer that problem, not enough time financial engineering that problem, even though it's primarily a financial engineering problem, because from the nuclear side of you, I really do think that the case is pretty clear for larger reactors for for a US type context where we supply those gigawatts. Well, it's
fascinating up here in Canada, the the licenses on we have ready to go is the enhanced CANDU six, which is about a 700 750 megawatt reactor. And there's interest in building can do, you know, formed 4800 of these 6000 megawatts is, is designed to be large nuclear, according to the announcements, but apparently the utilities are saying it's not big enough, we want a gigawatt scale can do. And it's just it's just a makes you shake, shake your head or do a double take because at the same time, we're using only one quarter of the licensed capacity of of our site that's ready to go at Darlington with with for beauty RX 300. So nothing, nothing makes sense anymore. It does feel like we're in the midst of a paradigm shift. And there's there's path dependencies, and some people are, you know, set on walking the way they've been walking. But but facts on the grounds that are sort of changing rapidly.
You know, I think the it has can do six is a really, it's a really good example of something that is is is licensed, we have a huge amount of operating experience. And just the the way that that Canada is hitting it out of the ballpark in terms of the refurbishments and building that supply chain, that industrial workforce really shows and you know, we've got a back and forth, Chris, I'm our candy is really the gold standard globally. Well, regardless of your perspective on that can do is the right choice for Canada to do right now, there's no doubt about that. That is the right choice. And in my humble opinion, for Canada to do, because it turns out that whether it's slightly technically inferior or superior, that matters so much less than having those real human real world factors going on. And that's why I'm saying, you know, I like the AP 1000. It's not because it's my favorite dream light water reactor that I dream about at night. But it is the one that we have a workforce that just built it, we have a supplier that has a warm running supply chain to build that plant, we have a design certification, and now our regulator has gone through the entire regulatory process twice of getting it permission to actually load fuel. Those are such great advantages, why throw them away? Why are we looking at throwing that huge advantage away, you know, we talk all the time to go down that learning curve. And I agree we should go down that learning curve, let's get a jumpstart. Let's go on to start from the sixth of a kind, not from the first of a kind. And that's not to say we shouldn't, I want to be clear, I'm not anti SMRs in any ways. I'm not anti generation for technology. But we have to learn from the past and figure out even if it's not the most shiniest newest technology, the technology that we can have those human those very real human factors, let's create a policy environment and a market environment that's conducive to deploying that technology. And get those start really actually learning and getting down that and I just, you know, one of the things that's so interesting to me is I feel like the AP 1000 Kind of has been searched. But as someone who was when I was a kid, I went to one of these conferences with my family. And we saw Westinghouse sort of present on the AP 1000 And I sort of heard the very same marketing rhetoric that we hear about SMR it's about these dramatic simplifications in a safety systems, you know, it's 100 fold safer than the existing fleet. It's 342 I believe structure, you know, modules that we're going to snap together on site, we've reduced by over 50%, the number of safety critical welds and the primary system and it turned out that didn't matter as much as having a great supply chain having a good EPC that was familiar of array A year that was well oiled. And what I'm trying to say is okay, we went through the hardest part we got to the other side, let's, let's kind of take our victory and try to build on that rather than starting from scratch.
Well, I love that. That analogy used of, you know, the need for maybe less nuclear engineering right now and more financing engineering,
and policy engineering.
Yeah, absolutely.
Because the nuclear engineering is superb. And if I could just fanboy out a little bit here on the why I sort of love the AP 1000 as this sort of evolutionary design that like goes that when I see the AP 1000 Nuclear steam supply system, I see in that 70 years of perfecting the, the Pressurized Water Reactor nuclear steam supply system. And what's really cool about this is, as we talked about before, we had to, we had three major, you know, manufacturers of PW Rs in the US. And Westinghouse now is really two of them, because they bought the combustion engineering nuclear business, which had originally been sold off to a Swiss company called ABB, but then Westinghouse bought it. So what we did is we kind of took the best of everything, right? If you look at the steam generators in the HP 1000, right, they are based on the history of the system at steam generators that were first deployed at Palo Verde. And now we're, of course, deployed by the South Koreans and in the OPR, 1000, the EPR 1400s. But even going a little bit back before they're actually side, they're a little bit smaller than the system at steam generators. So the ones that are really based on the Arkansas nuclear one unit number two steam generators, right, the pressurizer is basically the pressurizer that was based at South Texas project, and they bigger 50% Bigger than you would normally see in a classical DWR. So it can better you know, handle transients and accident situations or loss of feedwater transients. The core is built on gold four and time three, I'd probably butchering the pronunciation of those of those European reactors. The core shroud is Waterford, Waterford unit number three, the rafter coolant pumps are based in what our experience actually the first Pressurized Water Reactors, they're canned, like shipping port and Yankee ro. So we really have we've taken this sort of mixture of Westinghouse heritage combustion heritage. And we've tried to figure out how can we get the best what works best and put it all together into a single nuclear steam supply system. And where we really do that innovation was on the safety systems and making them completely passive, which is just a massive driver of not only safety, but simplification, I don't think we talk about that enough in the fact that, you know, one of the major drivers of complexity in a generation to active safety system nuclear power plant is just the emergency core cooling system, right? If you think about what you have, even for BW R or P WR core or ECCS, right, you have a high you have high pressure systems like your high pressure coolant, or safety injection your hip sees, right. And that requires a whole set of piping, whole set of pumps, wholesome instrumentation, and control and safety critical wiring and load centers as well as emergency diesel generator. And then you have to have low pressure, a whole low pressure system as well, lips, your lipsI or, you know, low pressure coolant injection or low pressure safety injection with its own independent set of instrumentation and control. Its own wiring its own independent sets of piping. With passive systems, we're able to eliminate all of that and make some dramatically simpler systems that we haven't even 1000 that don't require external power, that are just eliminate all that piping and all that, that that wiring and pumps. That's a huge, huge driver of simplicity. And, and we've now built it and we've operated it and we've licensed it. And that is that's kind of the best of what I want, right? I want kind of these great nuclear steam supply systems that are economical that just chunk out power and simplify the safety systems.
So I mean, what's your degree of confidence? Looking at the past? Again, maybe it's some of the best of the best in terms of Alaverdi, that building a third unit of an AP 1000 is going to cost down significantly? Does there an evidentiary basis to that?
A much smarter guy than me, Khrushchev run also at MIT released a really good report about about this, which really showed massive price reductions, you know, over 40 to 50%. Of what Vogel costed in the next OF A KIND at one time, so I'm pretty confident about it. Even if we look at their big price reductions from Vogel three to Vogel, four. Right. I've just done that one unit. But I think given your as, I won't say who but someone at Westinghouse one time said to me, you know, we did everything at Vogel about as hard as possible. We like just slammed ourselves into concrete walls over and over and over again. And the one advantage that you have of that experience is that we're not going to do it again. And we know exactly how to do it that better. And the the other thing is, is that Vogel was so expensive. Have that we only have really, it's going to be very, very hard to make a more expensive, so we can be assured I'm highly confident will be cheaper. The better question I think to ask is will the industry and will utilities seize this opportunity? You know, if we wait another 15 years or 20 years to build the next ap 1000? I'm not, you know, it might not be cheaper. But right now we have a workforce that's coming off of Vogel that's experienced, we have an EPC, arguably one of the best EPCs Bachtel that has built this that has the design, we have a design ready, we have Westinghouse gearing up their supply chain to supply to polish reactors. Let's take advantage. And we have multiple sites around the country that have gone through the entire NRC licensing process, which is a multimillion dollar, five or six year long process. And the NRC is like, we're ready, babe, like just just take, make the order and start construction tomorrow. I can't imagine a better situation you could be and where there's zero regulatory risk to start.
What I'm seeing looking around the world is, you know, there's some fine us reactor designs like the B 2x 300. They're not getting built in the States. That's not where the developments happening. I mean, the first ap 1000, or first two units were built in the States. But now we're going over to Poland to do them.
Well, the first unit, the first four units of APU and China, China Yeah,
yeah, exactly. So I mean, there's there's a tendency now for the US to be developing technologies, but not actually building them at home, trialing them abroad. But that seems is there historical precedent for that? I mean, there's a lot of nuclear exporting countries. But that does seem it seems odd as an outsider.
Well, remember, I think, if you went back just a decade ago, we expected there to be somewhere like a dozen nuclear plants under reactors under construction around the country, and that a couple of historical factors really screwed us right. We had the Fukushima Daiichi accident in 2011. But even right before that, we saw hydraulic fracturing really dramatically reduced the price of natural gas and increase the abundance of it so power prices began to plummet. I mean, we've been a struggle to keep the existing fleet online, as we all know. And then and then we also were compounded with that we went forward with summer and Vogel and that was not a great experience. Let's just put it mildly. And I think the problem if I may be so bold right now is that the industry kind of to borrow phrases to come out of the closet, a little bit about what happened at Voegelin summer, and not shy away with it, not hand wave away from it, about what the challenges were, but really level with people and say, This is what happened. And this is why it won't happen again. And I think instead much of what's going on is because there's just a lack of confidence that we're going to be able to learn we've learned from that. You see a very big reticence of utilities to order these plans. And even the plans that are in preliminary ordering, like the new scale orders for you amps for the Utah municipal utility, we're already seeing massive cost overruns being you know, you know, budgeted out there, even before construction begins. So I think we need to get to quote trigger, we need to deploy, deploy, deploy. Right now we need to figure out how we're going to deploy and make an industry wide effort to deploy and I personally think the beauty of your extra be hundreds, a good SMR candidate to start on that deployment. But I would we really do need to figure out a way to deploy another large modular reactor which which we know we can build, we know the price can only drop from there.
You know, I was talking with I think Robert Bryce about the Savior saving not the savior. There's many saviors of Diablo Canyon, but the saving of Diablo Canyon. And you know, this wasn't a nice to have nuclear reactor. This was a need to have nuclear reactor California on the verge of blackouts and political careers, presidential ambitions on the line if that had happened. And you know, this astounding turnaround where the Democratic controlled Senate almost unanimously voted to extend Diablo Canyon. Again, that's a need to have nuclear reactor. What is the driver? What is the urgency to build a nuclear in the states you've got tons of natural gas. Is this purely you know, being driven by climate policies at the DoD is that we need to again and this maybe it's harkening back to the original rationale for building nuclear in the States. We went through that a little bit that we were using a lot of oil before the OPEC crisis hits that coal got a bit expensive. What do you see as the actual pragmatic drivers towards building new small and even large nuclear in the US? Because Because words are not enough, you know, intentions are, well, Biden administration
publicly what they'll say is, we, you know, we've sort of woke up and tasted reality, right? We look at Germany, and we look at France, and we realize that and if you look at no matter what, even if you take someone who, you know, historically some nuclear advocates don't think of it's very pro nuclear Jesse Jenkins models, his modeling, no matter which way you look at it requires firm clean energy to work, right. In any case, it does not rapidly explode the cost of power in the United States. So from a climate change perspective, you know, we saw that great advanced nuclear liftoff report put together in part by Julie, COEs Iraqi at the Department of Energy, a great person, there's a real, you know, understanding if we're going to decarbonize, there's going to be a really big role for nuclear and to be honest, no matter which way and no matter how many renewables we build out, almost certainly we can't build enough nuclear to get to help that that path. So I really do think, for the first time most Democrats even have come to that realization. And that is a huge, I think, step change that has happened over the last 10 years. And I think we saw it, I think we see it very much in the Biden administration. But on the flip side, you know, we talk about natural gas. And I think there's a huge amount of natural gas deal in the United States. But as we saw the European the Russian sort of energy crisis induced by your your, I think there's a real now potential for liquification for LNG transport, you know, historically, we think of natural gas as not a liquid excuse upon market, where it's really dependent on the ability to pipeline trans transmission. And we didn't see coupling of the natural gas prices that were happening in Europe with the US. But now with the massive growth, the liquification capacity, all of a sudden, LNG natural gas, has become a much more volatile fuel in terms of price, excuse me, it's getting the pun than it has been historically. And if history and economics, Texas anything, that market is only going to become more and more of a global market. So I'm here sitting here in New York State, where we just had an Indian Point Two and Three stupidly. And now we are highly, highly dependent on natural gas and oil actually a lot to actually power our plants. So we I see my power bill jumps up and down per price kilowatt hour based on how much natural gas how natural gas prices go up and down. So we have a major sort of energy security issue not so much in the ability for us, you know, to keep the lights on maybe, and we're blessed with that. But in the ability to keep our lights on in it with a dependable price. What nuclear offers here is it offers this weird bipartisan, you know, issue where there is bipartisan support, even if you're the most climate focus, you want nuclear because you know you need it. And on the right, even if you don't believe climate change is even something or something we should care about you, you recognize the economic imperative of having to stabilize electric power prices in the US. So I think that's why we are in such a, you know, a place where we saw, you know, a recent nuclear fuel bill passed the US Senate with a 96 to three vote in favor of it. And there's nothing really in the United States that we still agree on that like, and you can't get a post office renamed with that sort of voting sort of record. And so we're in a weird space where for different reasons we can come together on nuclear power.
Right, right. I mean, this is potentially, you know, reminiscent of Putin's policy of building nuclear in Russia to spare internal use, don't get high in your own supply of natural gas and free up more for export. Is that is that kind of what you're seeing as a pragmatic driver beyond climate?
Yeah, I think that the United States is going to try to become a major LNG exporter, especially to Europe, right. And we have the ability to do it. And we've seen massive build out of LNG capacity, we're seeing obviously, in the European case, the ordering of a huge amount of LNG. And I think, you know, it comes with two sides, as I was just saying, I think yes, we're going to try to come a massive exporter. And I don't think I think it's a real strong economic environmental and geostrategic reason, national security reason why we, the United States should be a source of that. But on the flip side, that comes with making LNG a global commodity that's priced at global prices, that that is going to be sensitive on a pricing perspective, to global supply disruptions. And something like electric power, I don't think we want to be so tightly correlated to events that we can't control. I just think one of the things that, you know, we don't want to talk about maybe if you're a very climate friendly person, but it's just a truth, one of the drivers and the reason why I think America pulled ahead of Europe, so much in sort of GDP growth, is that we had a fracking boom, you know, first I don't know the late Bush, but really through Obama in an early Trump, where we increased oil and natural gas production. And I think that was a huge driver of economic growth and opportunity in the United States, especially compared to a place of the European Union where there's no fracking basically, that happened. And we see the consequences of that in multiple ways. I think we need to think longer term about how are we going to decouple our global energy markets and the supply that Americans get in their their mail every month, from the whims of What's happening 5000 miles away, and there's no better technology if I may be so bold than that the nuclear energy considering that we have a place like Canada and Australia, and you could have great uranium supply and I don't think we're going to be in major conflict with
the French, French wants some Canadian uranium now too, but I think a
lot of people want Canadian uranium and I think you know, the guys that Cameco To their credit, they are the smartest people in my mind, and they bought Westinghouse for five for a cheap price. They also 49% of it at least, and they have this massive these high grade uranium ore that they have mine sites ready to go. This is this is a huge win for Canada. And I think a huge win for the United States that Canada is so ready to to meet that supply.
James, I'm coming stateside in a couple hours. I'm gonna have to cut it here so I can catch my flight down to Boston going to MIT for a little nuclear workshop. Excited to report on that and maybe interview some folks down there. But a pleasure chatting again, so much more. I'd like to touch on and so much more. We will touch on going forward my friend but thank you for this.
Thanks so much, Chris for having me. And have a safe safe travels.
