The Peter Zeihan Podcast Series - SMRs Are Giving Nuclear Power a Facelift || Peter Zeihan

Episode Date: October 30, 2024

This video was originally released on Patreon 1 week ago. If you want to see the videos as soon as they come out, join the Patreon: https://www.patreon.com/PeterZeihan And if you needed another reason, if you join me on Patreon in the month of October, your subscription fees for the rest of the year will be donated to MedShare: https://bit.ly/medsharepatreon Nuclear power has a bad reputation, and I get it...Chernobyl, nuclear waste, and outdated infrastructure. Buttt, it’s a reliable, carbon-free energy source that might be getting a much needed facelift soon-ish. Full Newsletter: https://mailchi.mp/zeihan/smrs-are-giving-nuclear-power-a-facelift

Hey, everybody, Peter Zine here, coming to you from the Burbank Airport just outside of Hollywood. Today, we're going to take up the second of our tech modification series, if that's the right word, specifically talking about nuclear power. Now, nuclear power is something I'm generally in favor of because it is carbon-free and it's reliable, and the supply chain is typically within the United States. These are all good things. But there is also the mechanical issue that there's a problem. Public support for it is low.

The Russians have been agitating against nuclear power on a global basis for years in order to encourage their own hydrocarbon exports, even though they use nukes themselves, quite a bit. And there's always going to be the disposition issue, which the United States really hasn't solved. Basically, when you are done using nuclear fuel, you're left with nuclear waste that you have to either process, which involves establishing a plutonium supply chain in the civilian sector, which is, you know, from a nuclear proliferation point of view, a bad idea, or you have to store the waste somewhere, and you just then store more and more and more and more and more and more,

and the United States still hasn't built a large-scale repository that can handle all of the material, so it tends to be stored on site. So the dozens of nuclear facilities we have around the country, all have basically cooling ponds with tons of fissile waste material in them. These are all problems that the countries have figured out, solve, we just haven't done in the United States. It would require a significant change in regulation and probably a couple of acts of Congress.

And then we would need several years to build out the manufacturing system to be able to build more than one of these plants because, you know, we're talking about needing dozens of them. Anyway, what has changed that has made me a lot more optimistic about the sector in general is that big tech is getting in on the business. Big tech is building more and more and more server-farm to service data centers, and this is before you consider things like artificial intelligence. AI chips, as they currently exist, required a lot of electricity, specifically for cooling,

because you're running multiple transistors at the same time that generates a lot of heat and the chips that we're using were designed to be used one at a time, one in each console, and now we're putting tens of thousands of them into a single room. So that power demands are massive, particularly in a place like Virginia, where roughly half of the country's data centers are. What we're seeing is these big tech companies for green tech reasons getting in and buying green power. So, for example, Microsoft recently bought a data center in Pennsylvania because it's right next to a nuclear power facility. But more recently, Google and Amazon are both sponsoring small companies and startups to basically build something called a small log with a reactor that you can sit on the back of a truck.

And you can take that anywhere you want and just plug it into a transformer network. So if you have an old coal plant, you can convert it in a very short period of time. Or you might be able to park it just right outside of your data center and turn it to a power center. There's a regular story stuff that has to be worked out here. I don't mean to suggest this is going to happen tomorrow or next year or three years from now. But the fact that Amazon and Google are already promising to pay these companies to buy all of their electricity that they generate for reactors that have yet to be built is giving these companies the financial wherewithal that they need to proceed with the research and the prototyping. And prototyping is really where it's at. We don't have a prototype of a small modular reactor yet.

And the last big project dissolved kind of at the end of last year. And so this is a real shot in the arm from companies that literally have tens of billions of dollars to play with to solve their electricity problems. I don't want to over promise here because even if the SMRs work and even if we can in just a few years build up the supply chain that's necessary to build them at scale, we still have our old nuclear power plants to retire. with one exception, the Vogel plant built by Southern Company recently, every other operating nuclear power plant in the country is 50 years or more old. And they have had their lives extended because they're such a big part of the grid, and the regulations have been altered to preserve their role. But we are getting near the end of what is technically possible,

and we're going to have to replace all of them over the course of the next generation. At the same time, we're basically doubling the industrial plant in the United States, states and need any more and more electricity. So small loggerlers, if we can make that part of the solution, are a great idea because they can provide baseload power in a way that solar, say, can't. Remember that the sun goes down every night and solar panels just don't work at night, but nukes can run 24 hours a day. So getting this sort of change in the investment environment is really interesting. Now, the other half of the equation, of course, is what happens with utilities. Utilities in the United States are basically,

regulated monopolies, so they have a different risk tolerance. When it comes to investing in new things, they can take a longer view. They have to take a longer view. And so if we can develop this new type of infrastructure and new type of technology for new power, I have no doubt that most utilities in the country are going to be at least partially interested in seeing how it can plug into their existing systems, especially when we have so many people that are retiring old facilities. You might not have an efficient power plant, but it's still hooked up to the grid. And a lot of the hard work has already been done. If you can just drive in a new reactor, that solves a lot of problems for a lot of places. Okay, that's it for me. Take care.