Odd Lots - What's Really Standing in the Way of a Nuclear Renaissance?

Episode Date: October 23, 2023

The US is taking a fresh look at nuclear power. After a dearth of construction, and de-commissioning of working nuclear plants, people are talking, yet again, about it as a source of steady, affordable, carbon-free electricity. But of course, nuclear has its drawbacks, particularly on the financial side, as new plants have been plagued by cost over-runs, contributing to utility bankruptcies. So what would need to happen to get the economics working again? On this episode we speak with Mark Nelson, the founder of Radiant Energy Group, to discuss the state of the industry, the state of the technology, and what it would take to bring nuclear back into the mix.See omnystudio.com/listener for privacy information.

Join Bloomberg in New York or via live stream on May 19th for building an AI Future Ready business. This event will examine how organizations are moving beyond experimentation to scale agentic AI across the enterprise. By joining us, you'll hear from successful executives who are at the forefront of designing human plus agent operating models that are secure and outcome driven. This event is proudly sponsored by Kindrell. Register at Bloomberg Live.com slash FutureReady. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall. And I'm Tracy Alaway. Tracy, you know, we recently did that episode down in Austin with Jigger Shaw of the Department

of Energy. And he said a bunch of interesting things about nuclear. I mean, we talked about a lot of stuff related to electrification, decarbonization. But I think both of us found like the nuclear comments to be particularly interesting. Well, absolutely. So there were a couple things to pull out there. On the one hand, he sounded positive in the sense that maybe nuclear is getting more traction than it has previously. You have these new types of, was it smaller modular reactors, which he described as neither small nor modular. So I have questions about that. And, you know, and sort of groundswell potentially of support for cleaner energy technology in which nuclear, you know, theoretically could fall. But on the other hand, he also described these long-running structural

roadblocks to nuclear, at least in the U.S. So this idea that there isn't really a nuclear industry, there are utilities that might own nuclear plants, but no one's really pushing for it. And then also, if you're a utility CEO, you're probably not going to be that incentivized to build a massive nuclear plant because historically it's been a massive risk and responsible for a number of bankruptcies in the sector. Right. And so I think this was really like the key thing to me too. It's like, well, why did the U.S. stop building nuclear? And in my mind, and I think probably in the minds of a lot of, or at least the rhetoric, of a lot of advocates of nuclear power, it is a clean carbon-free source of energy that has a bad reputation and environmentalists stymie it because of, you know, outdated views.

Are you going to say the three-eyed fish in the citizens? the three-eyed fish on the Simpsons. His view is like, actually, that's not the story that, as you say, that, you know, because of historical cost overruns, there's real financial risk in financing these, and that part of the reason these cost overruns happened is that there's really no domestic nuclear construction industry or nuclear industry until no one is good at building plants, and that's why you have these cost overruns. And that ultimately, these are the stumbling blocks, the impediments towards like this nuclear renaissance that many people would like to see. Yeah, it's kind of. of this muscle memory effect. For some reason, it reminds me of like the lumber industry post-2007, 2008, where no one wanted to have overcapacity anymore. So they just became incredibly lean. And then when we did need more lumber in 2020, we didn't have enough capacity. So it kind of feels like that. Like it feels like everyone's been so scarred by the experience in the 70s, the 80s, the 90s, that it's hard to kind of get people within the industry excited about it again. Absolutely. So we wanted to follow up and actually explore some of these themes.

So I'm very excited. We have the perfect guest to do so. We are going to be speaking with Mark Nelson. He is a founder and managing director at Radiant Energy Group, which does energy analytics. He is an advocate, I believe, for nuclear. And he is going to talk us through as he sees some of these issues that jigger raise. So Mark, thank you so much for coming on Oddlots. Good to be here, Tracy. You are an advocate for nuclear energy. I said, I believe, but, you know. Yes, definitely.

What is Radiant Energy Group? What do you do? Why should we listen to you? Why are you here? Well, I didn't start out as a consultant. I started out as an energy analytics expert, working for a nonprofit out in California that was attempting to figure out why nuclear plants were closing around the world and how to stop it.

Hmm. So I was working with Michael Schellenberger at Environmental Progress, where there had been a sudden growth in environmentalists turning towards nuclear in the Bay Area of California, practically where they first turned against nuclear energy back in the 60s. And the thinking was, on one hand, if you developed an academic basis and scientific basis for understanding nuclear energy properly, people and other environmentalists would come around. On the other hand, there was a crisis. There was a fire in the house, which was nuclear reactors were being closed around the world.

We're not talking about nuclear reactors that people were proposing and needing to find financing for. These were nuclear reactors where the hard part was already done. They were constructed. They were making super cheap, reliable, carbon-free electricity, and they were being shut down all over the world. So at environmental progress, we needed to figure out how to stop that. And the first step was figuring out what was going on. And so I came in as a nuclear engineer to do that. I'll take the bait.

What was going on? Why were all these reactors shutting down? Because I imagine on the one hand, maybe you had environmental pushback, but on the other hand, we have heard a lot of stuff about how difficult some of these are to finance, to maintain things like that. The broadest possible thing I could say is there was not enough appreciation for nuclear reactors. If we needed to break it up, though, some places in the world, like the United States, States had extremely cheap natural gas and had installed governing systems for electricity

that used extremely temporary cheap fossil fuels as an excuse to shut down nuclear reactors that could last for another 30, 40, 50, 60 years. And that's really stupid. Those electricity markets are some of the worst things we've ever done to our infrastructure. But they were in place and they were leading to a wave of retirements. Do you mean that competition from even cheaper electricity was like that electricity from fossil fuels was even easier and cheaper compared to nuclear and so the preference was for that at the time? It's simply wrong to say that it was cheaper electricity. It was one aspect of the total electricity system that was cheaper on the margin at that moment at those times and sometimes it wasn't even cheaper. You just had natural gas folks that were willing

to take a temporary loss to drive nuclear plants out of. business. Oh, so like a market share fight. Yeah, yeah, basically. There was a market share fight. There wasn't as much growth for electricity demand. There was extremely cheap natural gas, making losses for the natural gas producers and needing to find more markets. And people arranged ways to build new natural gas plants so close to nuclear plants or near enough in location on the grid to drive them out of business. And then that's not like the cost, savings would be passed on consumers. No, no, no, no, no.

You drive the nuclear plant out and then you get the surplus. Then you raise the prices. Well, you can't really raise the. The prices go up once the nuclear is gone. Right. But then the nuclear is gone. And as we've discussed in the intro, it's hard to build. So you had a one-way ratcheting effect.

I want to jump in very quickly to the hard to build. But just this dynamic, because the follow-by was going to ask is like, you said, like, electricity markets have just been this damaging phenomenon. And I think generally, like, people think, like, markets are good things and markets produce abundance and et cetera. What is it about electricity that, in your view, either markets or at least markets as they're currently structured have this pernicious effect? Well, first of all, electricity is not a commodity. And the analogy that the economists used to think about electricity and setting up these markets was that electricity is a

commodity. It has commodity-like properties that are close enough that you can sort of squint and say it's a standardized unit, one megawatt hour, one kilowatt hour. And so they came up with a system to break apart the carrying of electricity with the building of power plants. And they said there's all these different parts of making electricity. And if we divide it up, disaggregate it, we can come up with competition and maybe start with the power plants. But then we can move to other aspects like competition and bundling up electricity contracts

to sell to consumers with different packaging. And it just turns out that to cut a very long story short, that could be its own series of episodes, it doesn't really work. And it leads to either enormous risk-taking that ends with massive market failure like we saw briefly in Texas and we're seeing in other places

that have instituted markets or the market manager, the market system, ends up taking on both the attributes and many of the criticisms of the old utilities. system that it was supposed to break up. I can tell this is already going to be one of those episodes that leads to like five other episodes. But just going back to something you said, I think you mentioned nuclear is hard to build.

And Jigger Shaw might very politely disagree with you because in our conversation with him, he was talking about how there is this perception that like, oh, it's so difficult to build these things. But actually, his point was, we've built them before. you know, we've done it. A lot of our technology has been exported to other places in the world where they're building them. Is it that hard to build a nuclear plant? Yes. So I visit construction sites and nuclear plants around the world. I mean, this is something that I thought was going to be the main problem. We just don't know how to build nuclear plants. And sure enough, it's is quite

hard. Here's what I'd say about nuclear plants. They're premium energy and they take your best people to build and they take your best effort and they need to be done right because they are that difficult. I mean, I've been to nuclear site. So, for example, the biggest construction site in Europe is a massive two-reactor nuclear plant on the west coast of southern England. And that site, you cannot possibly go there and think nuclear is easy. No, some of the best people in the country, the best contractors, the best engineers, the best managers are over there and they're going to be working for a decade on that massive nuclear plant. And then it's going to provide the best electricity service in the country. Like it's going to be extraordinary, okay, but it is really hard to build. The argument

maybe he was making was what compared to the immense factories that go into the supply chain for solar and wind. It's not that hard. But actually what we're saying is say offshore wind is extremely hard too. So is this a comparison question or is this a contrast? It's funny you say that, but we got to do an offshore wind episode at some point to because every article I read just looks like that. Industry on many levels is a total mess. But setting that aside, I wonder if maybe like the question of like hard or difficult,

to your point, you know, like a semiconductor fab is clearly like a complicated, difficult thing. There are not many entities around the world that can build like, you know, a seven nanometer, five nanometer, semiconductor manufacturing facility. But some people are good at it and some people become practiced at it. And so I guess the question is like how much of the constraint in the U.S. or in places where you would like to see nuclear expand, be an inherent difficulty or maybe like just out of practice?

Out of practice is it. We can build nuclear again. I mean, look. Because we did it a bunch like 50 years ago, right? The cost estimates that we're seeing for offshore wind, Joe, are about the same as the extreme blowout over-budget catastrophe that is Vogel in Georgia. So think about this. The wind that supposedly we're going to build and it's going to go well and it's going to be on time and on budget, if that happens, it will be at a cost per delivered megawatt hour that is about the same as Vogel in Georgia, depending on what you assume with interest rates and assuming they build. the wind on time. But Vogel wasn't supposed to be that expensive, and it provides an electricity,

a constant electricity supply that makes the rest of the electricity system work even better, which is not quite the case for the offshore wind. So the offshore wind, even being expensive, even after you pay for it, is going to be part of a more expensive electricity service overall. So I guess the question I ask is Vogel was very hard to do. It continues to be difficult to finish. It will be extremely valuable. It will be valuable for 100 years or more. Was it, should we not do it again because it was hard? I think we have to admit that nuclear is hard, but unlike many hard things, this is worth doing. Hi, I'm PJ Vote. My podcast Search Engine has a new two-part series for you. Of all the new technologies coming out of AI, the most transformative

one might be driverless cars. They're already on the road in 10 American cities, and they're quickly coming to more. We tell the story of how we got here. The secret team at Google that spent 15 years building what might be the safest vehicle on the road, and we cover the fights brewing in blue cities, where unions and politicians are working to keep those cars off the streets. Listen to search engine wherever you get your podcasts. I take the point that it's hard, and the knowledge gap was sort of what I was getting at when I said that we have a history of doing this, so the knowledge is clearly there. But talk to us exactly what the impact is impediments actually are. Like, what is it about building? It sounds funny when I say it. Building a massive

nuclear power plant with dangerous radioactive material. What's so difficult about that? Why can't we all just do it in our backyards? No, I'm being facetious now. But, like, what are the actual impediments to building these things? And why does there seem to be, you mentioned Vogel, why does there seem to be so many cost overruns in these projects as well? In the 60s, 70s and 80s, it's kind of a astonishing that we, if you look at the interest rate charts back in the day, like most of U.S. nuclear plants were built and completed at interest rates from five to 10% and above. So that's kind of astonishing. And they were, and they happened during a time when the environmental movement was getting immense elite support all over and that popular media turned against

nuclear energy also. So in a way, I, you know, it's kind of a. astonishing we did that. Yeah. So they overcame those hurdles in the 1970s. Yes. And they had to overcome the hurdles of the earliest plants that were built quickly and cheaply did not apparently make money for the builders.

That's a problem if you're going to keep building. In other words, it had the call it the offshore wind problem where the projects seem to be excellent from a sort of technological perspective or from an administrator's eye view, but if the people building them are burning through capital,

and not making profit in order to make these cheap things, that's not sustainable. Right. This is kind of the CEO point where a bunch of CEOs have surveyed previous nuclear projects, seeing that they've been massive financial drains on finances, I guess, and then thought, maybe not. But Tracy, that brings us to possibly the central paradox of this episode of Oddlots, which is there is nothing more valuable in the energy world. than an existing already built nuclear plant of traditional design.

So as an example of one that I heard recently, let's take Tennessee Valley Authority, had one of the all-time messes on their hands with finished nuclear plants when their Browns Ferry plant had one of the most famous fires that we have to learn about in not just nuclear engineering school, but all engineers or many engineers I know learn about the Browns Ferry fire as an example of all sorts of things not to. do. So this is three large reactors that are finally working well after decades of tinkering.

And together they make about, let's say, five million people's, five to six million people's worth of electricity at $15 a megawatt hour. And they're going to be able to stay down near $15 to $20 a megawatt hour cost. That's the cost to TVA of generating electricity of the course of a year divided by the amount of power, right? Okay. $15 a megawatt hour. And they're going to be able to do that decade after decade after decade. At this point, it's not clear what would actually cause these reactors to shut down.

And so you have this situation where can you survive as a CEO proposing building what after built is incomparable in what it can do for society in any kind of carbon-constrained environment or to heck with the carbon constraints, nothing beats this power plant even without carbon having a prize. I mean, the cheapest, most advanced, lowest cost coal plants on planet Earth would struggle to get near that cost. One of the things that I like talking about, one of the reasons that I think we've had good conversations with Jigger in the past is he understands the role of finance. And that... And incentives, I'd say. Yeah, finance and incentives. And that just like we could talk about construction. We could talk about, you know, $15 megawatt hours for a decade after

a decade after decade, but that, you know, we need to solve the financing problem. And as he sees it, a big issue is with new construction is that nuclear projects have been a major contributor to utility bankruptcies. Is that true? I mean, is that all... Do you... Yeah, of course. I think he's right there. So it sounds like then, you know, like the follow on from that is that if we, want this sort of decade after decade after decade of stable, marginally inexpensive electricity, that somehow the public balance sheet needs to be involved, or that we at least don't have these sort of like undermining markets where the cheaper natural gas, you know, plants can like situate near you and like price you out of business. How do you see the financing constraint playing

up? Well, let me dance overseas for just a second and say that we have an interesting comparison in countries that either like China are building a bunch of nuclear at a low cost or like France have decided they need to but are doing it very expensively and are having a ton of struggles doing almost anything in nuclear. But in both cases, it's considered vital to state interest that nuclear be strong and effective. Now, it wasn't that way in France only a few years ago. France was had an anti-nuclear ruling elite for a number of years and that's part of the immense trouble that they got into during the energy crisis when they should have been bailing out Europe instead. They had to be bailed out by Germany sometimes because of their own problems

making nuclear but they've decided it is a vital state importance. One of the first decisions they had to take was to repeal anti-nuclear laws and then they had to decide to say re-nationalize EDF was sort of basically owned by the nation, but they needed to take on the rest of the responsibility and just understand, as many countries do, nuclear is so important. It's a vital state interest and it must be done right. And at some point it starts uniting the various political interests in a country and just starts moving forward. We're big and strong. We're America, do we have to do nuclear well? I think that maybe even brings us into this cultural moment, which is if people of great talent, great energy, and great financial backing want nuclear

more badly than they weren't anything else, is that going to be something that in my opinion unveils the path? I think the answer is yes. There's there is a cultural. moment. There's a genuine cultural moment where almost anybody I meet wants to have a conversation about nuclear with me, whereas before I had very poor taste in conversation, it would be me forcing it on other people. Nowadays, since I work and talking about nuclear and thinking about nuclear and writing about nuclear and advising about nuclear, I am totally fine to talk about every other subject when I meet people, but they want to talk about nuclear. I like this, the idea of you just like walking down the street going, have you heard about molten salt reactors?

Have you heard the good news? Yeah, have you heard the good news? But that moment of evangelism, that's why I got into nuclear. A gentleman out in Calgary, who just was a big fan of molten salt reactors in Thorium, made a video channel. I was trying to figure out what to study in grad school. I wanted to do an engineering grad degree. I started an aerospace and mechanical engineering, and was, you know, spaceflight and big machines. and stuff like that.

And I just saw a few minutes of a video at exactly the right time in my life. And everything just clicked. It hadn't clicked when I'd worked at Los Alamos as an engineering intern. It hadn't clicked when I'd been to either the Sher Noble Memorial Museum in Kiev or the Hiroshima Peace Museum in Japan.

I hadn't been scared of nuclear. It'd just been, I hadn't connected it to the future of the world. Let's put it that way. I'd had many opportunities to be involved with nuclear that I just missed or not noticed along the way. And when I saw a, have you heard the good news video, like the guy shouting in the street, I saw that. Within a few minutes, I knew I was going to be involved in nuclear engineering or nuclear energy in some way for the rest of my life.

Well, since we're talking about things that might be changing, I take the point from a cultural and political perspective, but can you talk also about the technology side? And we already mentioned the small modular reactors, which Jigger Shaw says are neither small nor modular. So I would love to know exactly what they are and how they work and whether or not they do in fact provide a possible solution to some of the obstacles we've been describing. For instance, the idea that CEOs of utility companies, having watched a bunch of bankruptcies, a bunch of cost overruns on these huge nuclear projects, maybe they don't want to do something massive, but maybe SMR. these smaller reactors are a sort of middle ground.

Is it okay to make haters on this odd thoughts episode? Yeah, go for it. Yeah, go for it. Be controversial. Okay. Let your haters be your waiters at the table of success is what our mayor says. So yes, go for. Well, let's start it this way.

I hate the word advanced. I detest the gen 4 versus gen 3. It's complete bullshit. Sorry, I don't know if I can say that on odd lots. Wait, advance nuclear reactors? Is that what you mean? Yeah, I mean, like people use that. to mean anything going forward, not stuff going backwards.

What's advanced, it means we haven't done it. I mean, so the number of people I meet that know what the state is of things that we call advanced in this country that are actually deployed and working in other countries, people have so little knowledge. So, for example, the Russians have several different lines of advanced programs already in production. They know how much they cost compared to the, quote, traditional reactors. They also play the gin three game because they're selling in some of the same countries that the West would like to sell to. And they can build the traditional reactors quite well, reasonably on time, reasonably on budget, and they provide the financing.

It's amazing, right? They can do that. But they also can do the so-called advanced and at least the advanced lines that they have. That's not what their customers around the world are asking for. Turkey didn't ask for advanced. Egypt didn't want advanced. People just want the basic, like, well-functioning, reliable model. Because when they see the numbers, Tracy, from a company that can do it all, it just makes sense to do the ones that if we hadn't invented, we would call it advanced today, right?

Our reactors are extraordinary performers. You wouldn't be able to know in advance that these things are going to last 80 years or 100 years, but they turn out to last 80 to 100 years. The utilities that built these nuclear plants in the U.S. were hoping. to get 75% uptime. They're getting 95% uptime out of their nuclear. That's part of our paradox. The performance is out of this world for existing nuclear. It's outlandish.

But can we get there again? So the Russians have a sodium fast reactor program. Their sodium fast reactors are decent. Rumors from the Russians just chat on the internet says that it's about 20% more per kilowatt hour to produce electricity than their traditional ones? What's the advantage? Oh, well, I mean, they're still tinkering. They're going to try a few versions going forward over the next few decades if they don't have other issues.

But it's okay. It's not bad. And by the way, guys, none of this means we won't have genuine engineering breakthroughs or development success with other types of reactors. But let me just summarize in this joke. What do you guys call a gin-4 reactor we're building the first version of? Gen 1? Yeah.

There we go. You stole my punchline, Tracy. Sorry. Okay. I want to ask, get back to like a Vogel, some of the questions around the point of like we don't have a construction industry. But just real quickly to sort of add on to Tracy's question, setting aside advanced, setting aside Gen 4, setting aside Gen 3. What is at least like the sort of dictionary definition of a small modular reactor? What's the idea here?

Well, so there's fighting over how big small is. So I love Digger's line. I mean, I've used that for years. This small could mean almost anything. I don't know what he listens to or doesn't listen to. I think that it's not that hard to come up with it. There's a template for that joke with the Holy Roman Empire, right? Oh, yeah.

And so you can find your way back to. They also, that same joke about MMT. M&T. It's neither modern nor monetary. It's all version or a theory. Yeah, whatever, something like that. Okay. So the normal definition is small means anything smaller than, say, 300, 500, 600, there's a battle.

It's typically whatever size your reactor is, you're in whatever the good term is. Whatever your reactor is that you're proposing, especially if you've never built it before, that's what makes it advanced and small or modular or whatever. Just to give you an example here. in the 90s, in Japan, one of these big reactors called an ABWR, advanced boiling water reactor, there's the A for advanced, right? So we've been using advanced for almost my entire life. The Japanese built one of these reactors with GE in three years from first concrete all the way to first reactions in the core,

four years to get it to full commercialization. And this was a 1,300 megawatt reactor, so enough for, say, a million people in an energy-hungry, rich country, right? And they built it in 48 months, from first concrete to commercial operation. And I asked one of the engineers who'd been a young man working on that project. I met him, he's working on new reactors for GE. And I said, how did you guys do this? And he said, well, it was modular. And I said, that's nice.

Then why do you change the design afterwards? And he said to simplify it. They haven't built another reactor since. Do you see where I'm trying to get at? I think that we got this advanced language and this Gen 4 thinking because you had a bunch of well-meaning nerds who didn't want to face down the true roots of social anxiety about nuclear, which don't really have to do with the advanced or the generation.

And actually, in my opinion, in my experience, over talking to thousands of people at every level of society all over planet Earth for years now, it doesn't really have anything to do with the reactor at all. So you can't fix it with the reactor. If I find somebody on this to just says, oh, I didn't like nuclear, but now I kind of like these advanced new designs, or have you heard of molten salt thorium designs,

or have you heard Bill Gates is making an advanced new reactor? I like that. I almost invariably find they either actually always like nuclear, or they're totally fine with the non-advanced reactors now. And it's not the rebranding or the claims new technology that may not exist yet. That's not it. It's that they either had a fundamental issue with nuclear and that got resolved or they had no issue with nuclear all along and just want to sound like the progressive and modern about it. I feel like there's a market opportunity, maybe for Elon Musk or someone like that that's just like the boring, basic, reliable, cheap reaction.

company. We have at least one of the nuclear startups that's specifically trying to go in exactly that direction, both with engineering and marketing. Last Energy, Brett Cougomass, a software engineer, sold a software company, asked advisors, what can I do to solve climate change? They said, young man, go nuclear. And so he started this sort of think tank in D.C. to try to understand why people didn't like nuclear and why the nuclear industry wasn't building. His direction was to come out with a zero frills, stripped down, small or even micro in some people's estimation, simple version of exactly what we're building today, like for our submarines or for the big reactors. It's the same standard type. I've been trying to avoid these technical words, but since I already

talked about the advanced boiling water reactor, a PWR pressurized water reactor, one of the early types that was developed and was so successful in implementation, partly because of the strength and genius of the program director, Admiral Hyman Rickover, back in the late 40s and 50s, but also just because it works really well as an engineering technology. It's like the 737 got into its shape, its configuration, with predecessor aircrafts, as in wing, certain size, two engines slung below the third cord of the wing, and it just kind of hit that shape. That shape just kind of works really well.

and we keep getting 737s over and over and over, well, that's kind of what it seems we got to with PWR in a time of extreme experimentation where reactors around the world were going to every possible configuration, including a lot of the ones called Advanced Today. We made commercial versions of these back in the day, and it's just this type hit critical engineering

and technological mass and just became standards and for people to claim that a thing that hasn't really done well yet is going to dethrone the king, I love the idea that we would have multiple technologies we're working on. The Russians do it. The Chinese do it. India's doing it. A bunch of countries are doing it. But there's a reason the winner was the winner.

It works extraordinarily well. The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis, and big interviews. All the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture.

On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. That on Sundays, we speak with journalists, columnists, and key political. political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television. Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern.

Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts. As Tracy mentioned, you know, there's tons of follow-on episodes that all of the this conversation is inspiring in my head. But, you know, before we're wrap up, I want to go to sort of the other key point, which is this idea that like, there's, there's not a nuclear industry in the U.S. Or maybe the way that it sort of makes sense to me is like, if you were a utility and you wanted to, like, add nuclear, who do you call? Is like, who do you, like, what? And this seems to be the issue. And who makes the decision to actually start a new project? Yeah, who makes the decision and, like, who made Vogel? Like, who do you call? Like, talk about that.

Okay, I keep feeling like I'm sidestepping by jumping outside of the U.S. to look for overseas examples. No, that's really helpful. It's comparing contrast. It works. So one of the most interesting projects recently was the UAE setting up its nuclear program because they, it was Drula Rasa. They had a small number of people that had this vision of doing nuclear in their country.

People now say, oh, of course, they just bought it. They just had a bunch of money and just took it. Well, hold up. They got a really good price and they executed the project really well. And big utilities, you know, with money somehow didn't do that in the U.S. So what is it the UAE did? They got an entire generation of people a lot from the U.S. who had built nuclear programs, not just reactors, but entire programs before.

I met a gentleman who lives in, it was from Chicago, who as a young man, my age, makes me feel like a, dumb baby in comparison. At my age, early 30s, he was helping direct nuclear construction for ComEd, the utility. ComEd built five large nuclear plants circling Chicago, okay? And they built him in what decade? Well, in about a 15-year period. Okay. No, but when are we going to?

Oh, sorry, from late 60s to, I guess, early 80s. Okay, right. Right. I mean, Jigger actually mentioned one of these five plants on his episode. I believe it was it was Byron nuclear plant, right? Oh yeah, that he grew up next to, I think. Yes. So what UAE did is they hired people

who had been daily overseeing construction sites for the buying utility. And they said, come teach us how to do nuclear. We want to learn from you and then build nuclear ourselves. And then they worked with a country that definitely has a nuclear industry, the Koreans, who had an American design, practically like American English manual for the reactor,

almost exactly the same as what they purchased from American nuclear companies back in the 80s to build out their fleet of standardized American designed, maybe Korean upgraded reactors. And so you can find, they're not dead yet, you can find the people who actually executed these construction programs in the 70s And they would serve as extremely good advisors once you can recruit the young people motivated almost with a religious fervor to work in nuclear because they want to build nuclear. Wait, can I just ask? So some of the examples of countries that seem to be doing this relatively well, you know, China, the UAE, Russia, even Korea to some extent, they have a history of like a very outsized role of government financing in. this type of construction. So, like, are they actually good analogies for the U.S. where we still

seem to be, you know, Jigger and his $400 billion worth of loans at the DOE, notwithstanding, where we still seem to be hesitant about publicly financing this type of project? So I feel that there's a bunch of ideological directions people are pulled into when they come to nuclear in terms of how to execute it. What I'm excited about is people from every possible ideological stripe except for, say, Dumer degrowthers. Almost everyone else is coming to nuclear and seeing it in their own way. What's going to be the path for us to actually execute it? Look, I think people keep commenting on the excellent DOE liftoff report. There's a reason why, because it's actually really good. And some of the ideas in that report do have a big

role for government. And a number of the things in that report are actually happening. For example, it does seem likely that, say, for example, one of our big traditional large designs is going to be purchased and installed in other countries. That should hopefully keep the supply chain alive and keep the credibility of that design alive. In some way, we have most of the ingredients we need for reignition. I think we're going to have a large traditional design be the way I think that that design is going to be the winner after going, for example, at Vogel, AP 1000. Let's say AP 1000, a big design, right? I think that that has shown that once it actually gets built, it's extraordinary.

China is returning to using that design when they could pick anything in the world to use their excellence and construction on. They keep electing to build that design in their own country. They don't owe us anything. They don't have to do it. They're choosing it because of its excellence once you know how to build it. And we will get some critical mass of government help, of private initiative, of talent coming in from all directions, of belief at the top of utilities that doing a big capital project right is still the way these big utilities outside of these electricity market regions increase their asset base. The continued outstanding performance of existing nuclear. and finally a thing that could be its own three, four, five episode series,

the lack of alternatives as the deep problems with anything but nuclear start to reveal themselves at nation scale. One small question, and I just want to sort of go back to the who builds it. Say, like, okay, it comes, there's the finance. Let's say we solve the financing component. A thousand people who listen to odd lots because of you, they're like, I want to like devote my life to nuclear. Get over all these issues, et cetera. utility chiefs, sort of like outside of the market areas, like, yeah, we want this.

I still want to get just clear, like, who builds it? Like, is it, are they the big engineering company? I can give you some names. For example, Sergeant and Lundy is one of the elite. So that's because they have an office in Chicago and I've gone in to see them and they built the nuclear plants that power my home in Chicago, right? So Sergeant and Lundy is an example of a firm that will take a nuclear plant design from, say, one of the nuclear designers.

So they could take this AP-1,000, that was designed. And then they can oversee construction firms on site and make sure it's built to the specification that their specialist engineers and architects design, like the building that goes around the shiny metal bits, shall we say. So that's an example of a firm involved in this. Bechtel is an example of a firm that's extremely famous is the one you probably should have called in the beginning,

but they were too expensive, so you call them in the end after the bankruptcies, right? So Bechtel is going to emerge from Vogel in a pretty strong position to say, we know how to build AP 1000s. For example, they may say we can build anything. You can come to us with anything. But if you put together a winning design,

a short list of people who can demonstrate that they know how to build it, there's an active supply chain. I think people are going to find that the shrinking down to get to SMR, it may be that once you've actually done the detailed costing of these SMRs, it will find that the shrinking down was not worth the loss in power in terms of the saved project effort. Does that make sense?

No, I think there are going to be some grids around the world that will just have to pay the premium for these small reactors. But China has been able to build 300 megawatt or 100 megawatt reactors for a long time. They're trying again at making a 100 megawatt design that they're calling an SMR, but they're not, they don't seem to be planning many of these when they could again build anything. When China who can build anything chooses to build, they seem to be building the AP 1000. I think we have to look at that and say there might be a reason for it. So I have just one more question, sort of summing all of this up. You know, I came into the conversation thinking like,

Yes, yes. Attitudes towards nuclear are changing. And I kind of thought a big portion of that was on the technology side. So all these cool new things, maybe some stuff around the edges with like government support, the DOE loans program and things like that. Maybe it makes financing these things slightly easier. But technology seemed to be the big factor to me. But you seem to be suggesting that actually we've had the most efficient technology for some time. It's just been ignored, but now people are sort of reverting back to it and looking at it with fresh eyes.

I'll admit, I am working on a book on this, but as far as I can tell, at some point, humans were going to discover how to split the atom. At the point that we were modern enough to be human, at some point we were going to split the atom, and as far as we can tell so far, that's about as advanced as energy may get for quite some time. Even fusion is just a small difference.

It's kind of the same levels of energy, the same amount of fuel. It's pretty much the same, just immensely difficult, right? So at some point we're going to discover the ultimate energy. It happened to come in living memory. It led to an arms race that forever ended the idea that there was such a thing as absolute safety for anyone on Earth. So we had a long, multi-decade shared vision of the apocalypse that now, with the passage of that generation and the one after it, it's, it's, the vision of the apocalypse is breaking down. Some people don't think the world's going to really end.

Some people think it's going to end in 10 years from climate change. Like the vision of how we die spreads from bioterror to climate change. It shares a crowded arena now, this nuclear holocaust. As that fear declines and we become nuclear natives, true nuclear natives as a species for the first generation or two now, now making decisions, now involved in finance is the first native nuclear generation where we've always lived under the shadow of ICBMs. It wasn't something we had to adjust to. It was the constant of our lives. And honestly, the danger wasn't reduced at the end of the Cold War. I think that's now becoming more obvious, but it's not leading to a resurgence in New York.

nuclear fear. That was the fear that animated anti-nuclear energy, anti-nuclear waste. There's no real engineering argument for why nuclear energy is dangerous or nuclear waste is dangerous. That's, that's, has always been nonsense. Shernoble was operated as a power plant for 14 years after one of the reactors blew up. It was only shut down so they could use the money given to them by the Germans to start up another reactor. I mean, it's a nature preserve and it's we got to do revisionist Noble. Yeah, okay. My point is that's the worst reactor disaster ever. And it was, it's a, it's a crowded tourist site when the nation isn't at war. This is insane that this awful tragedy should become that. My point here is though, nuclear energy is coming back because

there's a secular decline in nuclear apocalypse fears. And as that gathers momentum and people find ways to express it through, oh, nerding out about the technology or getting excited about the carbon benefits or whatever, it's because we're finally emerging as the first native nuclear nuclear global society. That's why. Mark Nelson of Radiant Energy, so great to have you on AdLine. Thanks. I'm going to be back. Tracy, that was so inspiring. I hope there's like a thousand people who listen to that episode and are like, Mark, and now they go out evangelizing and major in a major. Well, that was so stirring, wasn't it? I kind of want, I want a T-shirt that says molten salt reactors are so hot right now.

Yeah. Does that exist? No, but I'm going to, I'm going to make one if it doesn't. I did think the point about the idea that we're kind of the first generation that has grown up with nuclear and it's sort of normalized and maybe some of the fears of the Cold War, you know, nuclear missile attacks and stuff are fading into the background. I thought that was interesting. But the thing I would add on to it is it feels like anything becomes possible, especially in America once it's couched in geostrategic or geopolitical interests. And so I remember this kind of came up with Jigger Shaw as well where he was talking about, well, you don't want Russian nuclear technology to proliferate in all these other countries

and become reliant on Russians for their cheap energy supply. We want to export U.S. technology so we can have lots of friends and allies. It feels like that's also an important component of this. Absolutely. I thought it was really funny and interesting this idea that like advanced is kind of a red herring. Yeah. That really great DOE liftoff report is called the pathway to advanced nuclear commercial liftoff. But to Mark's point that like if you look at, you know, a country like China, which, you know, seems pretty clearly to have construction and manufacturing and assembly prowess in all things these days.

The fact that like, all right, here's a country that like is continuing to expand and install more nuclear. And they're just going with this sort of like the old traditional like the 737 version of a plant is really striking. And so maybe it's really like these it's more about the cultural things and financing, et cetera, rather than like some magic bullet to come up with a new way of designing them. Right. The basic boring nuclear plant for the win. Although I do still have questions about the importance of technology and alleviate, in alleviating some of those old school concerns around things like waste disposal, decommissioning

power plants. We didn't really get into that. I guess we're going to have to do four other episodes on each of these topics. And the real story of Chernobyl. Yeah. We should probably do that one, too. We'll find a historian. Oh, dear.

Okay. Yes. Shall we leave it there? Let's leave it there. This has been another episode of the Oddlots podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Jill Wisenthall. You can follow me at the stalwart. Follow our guest, Mark Nelson. He's at Energy Bants.

Follow our producers, Carmen Rodriguez, at Carmen Armin, and Dashel Bennett at Dashbot. And thank you to our producer, Moses Ondom. For more Odd Lots content, go to Bloomberg.com slash Odd Lots, where we have transcripts, a blog, and a newsletter. And if you want to chat with fellow Odd Lots listeners, 24-7, go to Discord.G slash Odlots. We have an energy room in there, so I'm sure people will be talking about this episode. Maybe we'll get Mark in there to do a Q&A or follow-up if he's down to it. Really fun place to hang out. Go check it out. Yeah, that'd be fun. And if you enjoy odd lots, if you want us to do an episode on the revisionist history of Chernobyl, then please leave us a positive review on your favorite podcast platform. Thanks for listening. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about

new on-demand news report delivered right to your podcast feed. Bloomberg News Now is a short five-minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard on Bloomberg News Now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes. So you're always getting the latest stories and developments.

Get the reporting and the context from Bloomberg's 3,000 journalists and analysts we're all over the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen.