Transcription

• Speaker #0

  Welcome to the SOSV Climate Tech Summit podcast series. I am the AI voice of Ben Joff, a partner at SOSV and co-curator of the Climate Tech Summit. In a discussion on nuclear energy, Brett Kugelmas, CEO of nuclear fission startup Last Energy, and Candice Amori, CEO of the climate-focused community Climate Vine, explore the potential of nuclear power to provide abundant, inexpensive energy with minimal environmental impact. Kugelmas emphasizes nuclear energy's efficiency and reduced environmental cost compared to traditional energy sources. He addresses common criticisms of nuclear energy, particularly focusing on the exaggerated concerns about radiation and the real challenges of cost and time to delivery. The conversation also touches on regulatory hurdles and the need for innovation in nuclear technology deployment. Kugelmas advocates for a future where nuclear energy significantly contributes to solving global energy demands sustainably, in a future where humanity will need ten times the amount of today's energy. to afford everyone the lifestyle of today's most developed countries.

• Speaker #1

  Today we're going to focus on nuclear energy and we have two fantastic guests to talk about this, starting with Candice Amori, founder and CEO of the climate tech focus community Climate Vine, and Brett Kugelmas, founder and CEO of Last Energy, a nuclear fusion company. He is also the host of a very successful nuclear-related podcast called Titans of Nuclear. Now to introduce a little bit SOSV. So we are a deep tech fund focused on climate and health. We call that Planetary on Human Health. We invest in dozens of companies, new companies every year to try to tackle humanity's biggest problems. In addition to those sessions that you will be able to replay. on the website. You can also join other events we organize. In October, we run a larger climate tech summit, and we also organize matchmaking events between startups and investors. All those events are virtual, are free, and you're welcome to look at our website to join. So without further ado, I'll leave it to Candice to talk about, and Brett to talk about Nuclear. Thank you.

• Speaker #2

  Yeah, thank you, Ben. Brett. So I am actually very excited about this. So I'm going to be learning with you. I've learned a lot by, by, um, listening to, to other things that you've done and just digging into nuclear. Uh, and we have 30 minutes between the two of us. So we're going to cover a ton of ground between us, and then we'll open it up for the audience to, to ask some deeper questions, maybe pulling on some of those threads or bringing in other things as well. So the, uh, one of the things that you've said. that has really caught my eye is just your vision of abundant, inexpensive energy, this world that feels really fun and exciting and optimistic and big, where our energy is decoupled from negative environmental impact, right? And that's, I think, what we all want, certainly what I want. And after doing a ton of research, talking to a ton of experts, you essentially landed on nuclear fission as key to this vision. So my first question is, what is nuclear fission? Let's do a quick definition there. And then two, why are you so bullish on it?

• Speaker #3

  Yeah. Well, thanks for having me. This is going to be a lot of fun for me too. So happy to share my thoughts with you and the audience. So what is nuclear fission? Well, in the simplest explanation, it's you split the atom and splitting the atom creates heat and that heat can be used directly as heat energy or through a power plant can be turned into electricity. and provide power, which is the foundation of everything that you see, eat, touch, how to move things around. Energy is absolutely everything. What makes fission so special compared to the myriad of other energy sources that we have available is that you get so much from so little. And this comes back to the point that you were making about decoupling energy abundance from its environmental impact. I think it's safe to say everything has an impact. Nothing is without a cost, no matter how emotionally proud or attuned or in love with a certain technology we are. Absolutely everything has a cost. And so, but sometimes they're hidden costs or sometimes people just haven't explained them to us yet. And so if we understand that everything has a cost to the environment, not just a currency cost, but a negative impact, a negative externality, everything does, then what you want is to minimize. That cost while maximizing the benefit. And just on a first principles, raw physics basis, nuclear has a six order of magnitude advantage. A six order of magnitude meaning a million times advantage over traditional energy sources. You know, I think there are plenty of fair criticisms out there about nuclear. I think most of them are exaggerated or overblown or more emotional than and based in practical reality. And we can go through any of those. But I think that's the one thing I'll always just keep bringing us back to is that you get so much for so little. And that's that's the foundation of a prosperous society.

• Speaker #2

  Amazing. So first principles, cost benefit analysis, right? From there, you found that nuclear was, and that amount of more powerful is like our human brains can't even fathom. Like that is an immense amount more powerful. I think you've talked about power all the time, right? So that consistency as well. So more power, but also power all the time. Let's go into, actually, I want to ask, what are the fair criticisms or the fair impacts, whether they're hidden or not, of nuclear? And just rapid fire, which ones you think are really actually worth paying attention to and which ones are overblown?

• Speaker #3

  Yeah, I think the ones worth paying attention to are cost and time to delivery. That's an extremely fair criticism of the nuclear industry. They're extremely selling, extremely expensive, but there's a big but there. It didn't always used to be that way. And some people might assume that they know why it's slow and expensive right now. And that's something, you know, that was a big learning journey for me through the podcast that I did, the Titans of Nuclear podcast. I interviewed thousands of people in the process and we've made over 600 episodes at this point. But it took a while for me to understand what were the true drivers of that cost and schedule that are some of the real challenges that the industry has to overcome. And the things that are like totally overblown, it's usually about radiation. So it's like, yeah, it's radioactive. Yep. It's toxic. Yep. It can kill you. But so much so can too much water. So it's like, like, you have to. If you want to develop a more evolved thesis on the hazards of radiation, it's important to understand how much is too much. And I think anyone who really does want to commit the time to study the matter will realize that our regulations around radiation are also many orders of magnitude too restrictive. And that you can actually take a lot more radiation than you would think with it having no negative health impacts. And so... And the amount, the worst case scenario of. hazards coming from nuclear that are radiation related is way less than where that threshold for where the health impacts come into play. So I know that got a little bit scientific, a little bit nerdy, but I think that's what people generally have wrong.

• Speaker #2

  No, I think that's great. So I'm actually, I'm going to circle back to that. What I'm going to start with before that is what's going well today across nuclear, whether it's in the tech, the companies, the regulations, like what's going well, and then let's dig into what's not going well right after.

• Speaker #3

  Yeah. So what's going well. And I probably couldn't have said this like three years ago, but these last three years, there's really been like a notable change, not in terms of public perception overall. I think the people are already pretty pro-nuclear, not everyone, of course. Certainly in some areas, they're pretty anti-nuclear. But governments realizing that so much of their public is already pro-nuclear, where maybe they thought differently and now have changed their government policy and political positioning and more new candidates are running on pro-nuclear. platforms, that's definitely been like a noticeable change in the last few years that I think is bringing a lot of positive attention to the industry and actually breaking down a lot of barriers that have historically been in place.

• Speaker #2

  Amazing. And it's kind of coming back to that, right? Like past presidents had run on nuclear. Now, maybe we're not going that far, but at least, you know.

• Speaker #3

  In some countries, yeah. In some countries, there are prime ministers and even presidents that are running on pro-nuclear platforms.

• Speaker #2

  Amazing. Excellent. So let's go back to maybe what isn't going well. And the way that I'm going to frame this question is thinking the assumption here, I guess, the implicit assumption of this question is that nuclear is generally great and we want to scale it. Right. And so. You've done thousands of interviews, and it's great that we can have you to consolidate them for us. So what would you say are the most surprising reasons that you've learned through that time, through working now, starting Last Energy, that we haven't yet been able to unlock nuclear at scale?

• Speaker #3

  Yeah, there's still a lot of barriers. I mean, a lot of them are regulatory or policy. I wouldn't say that those are the root issues. I'd say those are like the proximate issues. The root issues, I think, are the old nuclear industry. As many old traditional industries do, this is not unique to nuclear, this is true of aerospace, this is true of space travel, this is true of food and drugs, this is true of a lot of things. The old incumbents many, many decades ago used regulatory capture to build moats to better defend their position and exclude competition in the space. And what happened in the nuclear industry is they were so effective at doing that, that they actually put themselves out of business. This is by the mid to late 70s, before 3 Mile and before any of the accidents. The nuclear industry had already put itself out of business through these anti-competitive practices. And a lot of what we see today and a lot of the barriers that are still in place today are due to the actions taken by those 1970s companies. And what's challenging is that in order, you got to. how do we course correct that when many of the people who have a deep understanding of how this came to be are no longer around? So it takes a lot of foundational education and tying the advantages of nuclear to modern day problems to get people to rethink their old assumptions about why it failed to begin with.

• Speaker #2

  Amazing. So... So it's interesting because essentially when they build in the regulation, like these companies wanted the regulations because it was more profitable to create. you know, products around safety than just to build. And now they've actually taken themselves out of the industry period, which is an unintended consequences consequence. I'm guessing that makes cost and, you know, speed a problem. Right. And so we're covering that. Let's dig into safety. Right. Cause you said essentially similar to aerospace and right now there's like Boeing and we're like, great, like regular regulations. Great. Like a door to pop open. why is it different in nuclear? And why do you believe that safety is this over-talked about or over, you know, this like boogeyman that actually shouldn't be a boogeyman, both in the public, but also just like grounded in reality?

• Speaker #3

  Yeah, yeah, yeah. So here's what happened. So yeah, so the incumbents, you know, created so many regulatory barriers, you know, by the end of the late 1970s, even they couldn't build their own cost-effective product. And so they kind of gave up on that. They still did have an existing services model where they would... You know, do modifications or add on to existing facilities and provide all sorts of interesting analysis and support services as well, including increasing usually like radiation protection. And so what happened was, especially after Three Mile Island, it just kind of happened for the reverse reason. The nuclear industry found a new business model. They saw that people were scared. Instead of pushing back on the fear, they leaned into it because now they were able to sell a lot more of the side of their business that was still alive. All of these safety services, safety add-ons. So they kept like ratcheting up the regulatory scrutiny intentionally to be able to build up this other business that they had created. And within just 10 years, especially after Chernobyl, they like ratcheted it up again, even though like. It was a totally different type of technology. It didn't make sense why what happened there should impact regulations here when a lot of the problems had to do with the base technology itself was just so fundamentally different. But they still used it, and they used it again after September 11th and used it again after Fukushima. So you have these four discrete periods where you see this incredible ratcheting up of regulatory requirements. And I would call a lot of these safety theater as opposed to safety. They don't actually make the system safer. They just add more burdensome things that the operators of these assets have to do that are in the safety category without actually achieving like a net end goal of whatever metric you would want to classify safety standards according to radiation impact, dose impact, impact on health, impact on the environment, whatever it is. So none of those goals were accomplished, but they're able to sell what is now 10 times as much. per power plant than just delivering the initial reactor itself, which was their original business model.

• Speaker #2

  How many people have died or been hurt because of nuclear fission?

• Speaker #3

  So, like, if you include Chernobyl, it's like in the 50 to 100-ish number. The reason that I put, like, a bracket around, like, if you include, one of the reasons it was a fundamentally different technology was that it wasn't just a power plant. Yeah, it produced power, but they chose this giant graphite block-style reactor room called the RBMK because it could produce plutonium while producing power. So, you ever, like, wonder how did… How did Russia create so many nuclear weapons? I mean, by tens of thousands of nuclear weapons, when like, like if anyone's seen Oppenheimer, like it took all of the might of the U.S. government to just like make our first few. like, I don't know, some ridiculous amount of, like, energy went to making the first fuel. How did Russia make so many? Well, it's because they designed a power plant that was actually a weapons production factory based on how they configured the reactor to begin with. So I put a big if around that because I don't think anyone would feel too bad if we, like, blew up a munitions depot in another country during, like, during a war and 50 people died. Like, I think we, like, contextualized it a little bit in our head, even though it's always sad when there's loss of human life. But so, yeah, between, like, 50 to 100. just at Chernobyl. Yeah, there are a few other minor little accidents here and there, but nothing really to count to that total.

• Speaker #2

  Right. So Fukushima, no one?

• Speaker #3

  No one. Some people claim it was one guy that had lung cancer four years later. We know how much Japanese people love to smoke, so it's like that's hotly debatable. But if so, maybe some people say one. I look at it and I say not only did no one die, there was no impact on wildlife or the environment either. Other than the damage that we did by like cutting down like fruit trees and stuff, like there was no negative impact, almost period, end of story, from three gigawatt scale meltdowns of light water reactor technology as compared to what we were talking about with Chernobyl, which is like a graphite based technology.

• Speaker #2

  Awesome. That blew my mind when I first learned that. So it might blow other people's minds, maybe not, but that's very different than I would have thought given what I hear about nuclear.

• Speaker #3

  I know. Listen, it took me two years to reconcile the disconnect between what I thought previously and then the extensive work that I did before I'd even launched a company. Obviously now it's going to seem like I'm biased, but before I launched a company, that's when I did all of this homework to see if it was a space I even wanted to get into. The unbiased version of me came into these conclusions. Now, sure, I'm biased, but whatever. I think it's still pretty honest.

• Speaker #2

  We can all be biased when we do enough work. I think that's fair. And that's why you're here talking about it, right? And we can take, you know, whatever nuggets we want. So this is also now what's your take question on how we actually unlock nuclear at scale. So we've seen the problems, we see what's going well, and we see the areas of improvement, of innovation. How do we unlock nuclear?

• Speaker #3

  Yeah, so our strategy has a few different elements to it. We think we've got the best strategy to unlock it. But I hope we have a lot of fast followers. Like I invite the competition. We don't want to do anything exclusionary. We want the competition. We want as many people to just copy our business model. And so I'll walk through that right now. So there's a couple different components to it. One is address the cost and time to delivery, like the scheduling issues, essentially. And what we did was we looked to other industries that had gotten really good. Well, first we studied what goes wrong in terms of cost and schedule when it comes to building a nuclear power plant. And a lot of it has to do with just the fact that you're doing a mega construction project outside. Like you see a lot of the same issues with tunnels, bridges, you name it. So if you can shrink it down to the point where it can be a factory manufactured good, And we've seen this in the renewables industry. We've even seen this in oil and gas. We've seen this in the power industry before where they're able to bring the manufacturing into a controlled environment, like a factory-style environment. And then just do assembly in field. That was what we have decided is the big unlock to address the cost and time to delivery issues. And then that's one component of how we plan on changing. You know, kind of like restarting, reinvigorating the nuclear industry. And the other way is. through addressing the regulatory capture issues, the like all of the permitting requirements that just built, I mean, like we're talking like 10,000 requirements and some of them are ridiculous. Like some of them are like, how many pushups per week your security guards have to do? That's how stringent they get. And like, okay, fine. There's nothing like really wrong with that. Yeah, your security guard should be fit. But if you say your security guard should be fit, that's easy. If you say, if you tell me pushups they have to do, well, now you have to find. like you have to monitor that. You have to record that. You got to like send that in. You got to have inspector verify that if you get caught, you got penalties, you know, lawyers involved. So it's like, it's not just doing pushups. It's adding like this huge administrative cost to everything. And there are 10,000 examples as silly as that. So how do we address that? Like, well, we can't rewrite the law. And especially in the U.S. where there's just still so much. It's so hard to change policy here because you have so many competing interests. And I think everyone can acknowledge that policy is not always merit-based in the U.S. There are special interests. We decided to essentially go regulatory shopping. We went to other countries. We found other countries that the regulations were already perfect for what we wanted to do. They have what's called a... performance-based approach instead of a prescriptive approach to regulations. So they set goals. They say, hey, we don't want people to get hurt. like, here's how little radiation someone could have with this little, you know, this frequency of accident, show us how you get there, but it's open to you. You're the technology designer. So we found about a half a dozen countries across the globe that had that perspective rather than the U S or Canada or many other systems, which are like, here's how many pushups your security guards have to do. So that was, that's like the key to our business model, but how we approach that issue.

• Speaker #2

  Amazing. Okay. So we've got a basically manufacturing innovation, right? So like we're using tech that's been there for a long time and we're building... basically Lego blocks, which are the SMRs, right? The small modular reactors.

• Speaker #3

  We're calling it micro now because SMR has been so abused by many of the entrants in this space that like the branding, but don't like to do the thing. So SMR stands for small modular reactor. And nine out of 10 companies that claim that they're small modular reactors are not small. They're like as big as the original fleet. and they're not modular. They're still like traditional construction methodology. They might just have like a module in them. And so we're like really trying to like pivot away from that branding right now. We're calling ourselves like a micro reactor or micro modular reactor to try to differentiate ourselves.

• Speaker #2

  Got it. And the goal there is to go small, right? To like get to the place where you can essentially have a Ford assembly line, creating Lego blocks to then build something in a different country that has better regulation. Is that what is that?

• Speaker #3

  I brought a little toy. I saw this on one of our CAD modelers desk. So I just grabbed it before coming in. This is like our nuclear module. like you can imagine something the size of like a city bus. So you can imagine that rolling off the assembly line and built in a steel frame, put on the back of a truck and then driven a site and dropped into place. To me, that's modular.

• Speaker #2

  Amazing. Okay, excellent. So manufacturing, cost and time. I think one of the biggest things here is... that we know that for the energy transition, we need to build a ton. There's so much infrastructure that needs to be built. And like you said, this is a problem across infrastructure. And my hope is that other industries, that governments, that cities, essentially take this idea of manufacturing slash infrastructure innovation and think about other places to put it. Why go small? Just give me a little bit more information about why is that your core piece? It's cost and speed. Is that essentially, am I getting that right?

• Speaker #3

  Yeah. So we started off with what we wanted the system to look like when it came together. Like you said, Lego, that's exactly right. We wanted it to feel like kids putting together Lego blocks, but in the real world. And so we started with that and we said, okay, well, to get it from a factory to any given site. like how much, what's the max that it could weigh to be, you know, to put on the back of a truck, what's the max size it could have. So we started off with that and we said, all right, so we drew our box and so we could put this much weight in it. And then we designed a power plant that fit into these individualized boxes that when they snap together, all work together. And so that, that's like, that, that was the original thesis as to why it goes small. It was kind of set by this logistical and supply chain constraint.

• Speaker #2

  Do you always want to go small? Like in five, 10 years, is last energy still building micro modular reactors? Is it going bigger? Like what's sort of the trajectory there?

• Speaker #3

  Yeah, I think, yeah. We want to deploy probably like 10 to 30,000 of these 20 megawatt units first, but that's still only like a few percent of world energy. And that might take us like 15 years or so. The plan is like you get 10,000 out the door in the next 15 years. And then. But that's only dropping the bucket of world energy. We don't just want to make nuclear 100% of world energy. Not part of the solution. We want to make the solution. We want to also 10x the amount of energy that humans can consume for a very pretty simple reason. Because that, like, horrifies people. 10x the energy. Oh, the environmental impact. Yeah, But, like, that's a very Malthusian perspective. Like, our goal is get everyone in the world out of poverty. up to the standards of Americans, then let's increase the amount of compute. Let's increase the amount of travel. Let's increase, like, let's use energy to achieve all our other objectives and then just make energy super cheap, super available, super abundant. So that's our perspective on it. But to get back to your question more literally, okay, if it takes us 15 years to get the first 10,000 out the door, and then we're still only at like 1% of global energy, how do we accelerate that? How do we multiply that? by 100 to get to 100%, and then 1,000 total to get to 10 times global energy. Yeah, I think we have to scale up. So I think we're going to use that same factory-style approach and then just upgrade the power output to probably 20 to 200 megawatts, and then maybe V3 will be 2 gigawatts, and then whatever gets us cheap abundant energy across the world fastest.

• Speaker #2

  Awesome. Okay, I'm going to rapid fire for the next five minutes. Okay. For everyone in the audience, keep dropping your questions. We're going to spend that second half answering your questions. So the first one is just 100% nuclear is... is, well, I guess abundant energy is really exciting. 100% nuclear, I'm like, okay, why not a little bit of other pieces? And so that's kind of the first question. But underneath that is geothermal and nuclear. When I've spoken to people at the forefront of both of those industries, they both say generally similar things. Cheap, abundant energy is under our fingertips. It's always available. We can scale it up using current gas and oil infrastructure, which might be the case as well in nuclear. workforce, especially in geothermal, you know, we can train them up. Maybe that's, again, similar to nuclear. And yesterday we brought in Founders Pledge to ClimateBind, and they had a slide that just said, these are the technologies that we're most excited about. Nuclear, specifically SMRs, which maybe they mean micro, right? Like true SMRs, and geothermal. And so question to you is like, what are the actual differences in terms of maybe what you believe makes nuclear, like have that edge? And why 100% nuclear? Like, why not a little bit of a mix?

• Speaker #3

  Yeah, so... Yeah, that's interesting. So why not a mix? So listen, I started off my career designing solar panels for Nano Solar. And so I still have a lot of emotional residents. So I have a deep empathy for people that thinks that renewables should be part of the solution. But if you're able to just take a step back and take a look at the environmental damage caused by mining 1,000 times as much material, right? And then there's all sorts of other issues as well. And some of the material is pretty nasty. And then people don't look at like. The third order effects of building a solar panel, they just stop and say, okay, well, how much like energy does that factory use? Let's subtract that from what the energy, you know, solar panels produce. But it's like way more complicated than that, you know, to make the chemicals that make the chemicals that. purify your materials to go into solar, you are dumping like tons and tons of all sorts like nasty acids and even just mining the original materials to make the materials or materials to make the chemicals like that has awful environmental impacts. And I'm not here to like dissect and litigate all that. All I'm here to do is say when you have so many more orders of magnitude power that comes out of the same basic things of like extracting materials from the earth, why wouldn't we not go with the one that you get thousands of times? as much as when we know that there are negative consequences to any type of material extraction from the planet. So that's my theory on why 100% nuclear. Now, geothermal is actually I'll take a pause right there for a second. And if you have any questions, I can come to the geothermal.

• Speaker #2

  No, no, geothermal, please.

• Speaker #3

  Okay, yeah. So geothermal is actually kind of interesting because you're right. It actually does operate under the same fundamental principles. And if you can imagine like the heart of the earth, which by the way, it gets all of its heat, like down there from nuclear. It's literally the decaying of uranium that creates all of the heat that comes from the center of the earth. So either way, fine. Okay. Yeah. Geothermal is nuclear. All right, fine. I said it like, okay. So, but like, okay. So not directly though. Right. So now if you were to consider that your reactor, the heart of the earth, your reactor, and then the power plant is on the surface, you're right. Like they would be roughly equivalent, but that would only be if the work that you did to extract that heat source is able to be roughly comparable to the work to extract uranium and then put it inside of a pressure vessel and have your heat source at the surface. Now, one might actually say, okay, those actually are pretty comparable, but there's one hidden drawback of geothermal that is like the dirty secret as to why these projects really don't get built, even though they seem so clean, so amazing on the surface. There is a dirty secret. That every project equity finance professional knows about geothermal, that it's very hard for most other people to understand. And so you have to look at like an Excel model to understand this. But basically.

• Speaker #0

  You put in all of your money up front, right, the upfront capex of the project, and you've designed your system around certain assumptions around the power that it can produce, and then you ride that system out in order to be able to get that power over time. Well, if you're able to produce a very steady amount of power over time, you're able to configure your equipment, you're able to, when you allocate your capital at the beginning, to make sure it is the correct configuration, the correct optimization. capital input to energy output and system-wide efficiencies to support those models. But that's simply not the case. You don't get steady output from the initial work that you do to dig your hole and create geothermal energy. And that's simply a function of the thermal properties of the earth and rock itself. So rock is incredibly insulative. So even if it's very hot, and let's say you dig your hole, and let's say you use some fracking technology to create spider webs of little cracks and get a ton of surface area, the minute you start pulling heat out of that system, the amount of heat that it can deliver to you starts decreasing. And to recharge that system doesn't operate on the same time scales as your original capital allocation. And so you have this problem where you've got decreasing power input, but you've sized your equipment for that initial startup. And so then it becomes inefficient over time and you can't expect the same rate of return over time because it doesn't have these like baseload steady characteristics that nuclear does. Sorry, that got a little too. No,

• Speaker #1

  no, no. That was great. And I think the two differences that I'm recognizing is that nuclear, it seems like the energy is use the same tech that exists, infusion at least, right? Use the same tech that exists. and just manufacturing innovation, right? I think in geothermal, it's go deeper, right? So there still is like a lot of technical excitement about the new, I mean, there's technical excitement in general, but I think excitement in geothermal of going deeper. And then there's a first of a kind slash financing problem. And I know Interspace is talking about this, but I don't know if you're saying it's first of a kind. I think you're just saying- No,

• Speaker #0

  not first of a kind. It's just the financial models don't work. That's super interesting. Power production characteristics of geothermal.

• Speaker #1

  Very interesting.

• Speaker #0

  Go deeper is great in theory. And yes. Going deeper may actually make a lot of sense, but if you have the drilling technology to go deeper, guess who else is going to use that drilling technology to make their resource extraction more cost competitive? And that's fossil fuels. So it's like fossil fuels is going to win fast, way faster than geothermal, like not even close faster than geothermal does.

• Speaker #1

  God, I wonder if that's why we can, but like, you know, oil and gas is interested in geothermal. I hope it's for the right reasons. I'm going to rapid fire two questions and then we're going to go to audience within the next two minutes. So just what about fusion? What's your 30 seconds on fusion?

• Speaker #0

  I think most people understand fusion. I think most people who love fusion, like the characteristics that they think it has are actually the characteristics of fission. And they're just confused. And this includes fusion. Scientists themselves are very, very confused. So if you were to think, hey, which is the more radioactive of the two? 99.9999999% of people would say fission. Oh yeah, fission. It's the one that's radioactive. Fusion is the one that's clean. Wrong, wrong. It's actually the other way around. So on a per energy delivered basis, like per megawatt or however, what you want to think about power delivered, you have seven times as many neutrons being ejected out of your core in fusion. than fission. In the clean one, you're producing seven times as many neutrons. Well, that itself is a form of radiation, but even worse, everything that it touches then becomes radioactive. So now you actually have two problems that result from this one original sin, and that's you need more shielding, more protection. All of your fancy super scientific equipment that got you to that fission in the first place is being destroyed, like totally torn apart. And so you're producing a ton of radioactive waste. It needs to be replaced. It needs to be handled by humans. So it creates these conditions that most people criticize fission for, but it creates it in a manner that's seven times more aggressive. So you've got seven times as much of the radiation problem, and that leads to maybe 10 or even much more times in terms of the original cost. So it's not cheap and it's not cleaner than fission. And that's what every single person has wrong. If you don't believe me, just go into Wikipedia. Just do the, like it's algebra. Do the calculation yourself. Per unit energy produced, how many neutrons are ejected? Anyone can verify this.

• Speaker #1

  Why is fusion still getting so much funding?

• Speaker #0

  Well, I think it tickles the imagination of philanthropists and it's a great like government jobs program. So you got a lot of support for it, even though it makes no sense.

• Speaker #1

  OK, fascinating. All right. So these these are my favorite types of questions to ask. You're focused, you're laser focused on SMRs, right? And you have a very clear like this is what we think is the unlock there. are other people who are not going to, you know, trail behind less energy, that want to do other things that might create unlocks for you or just, you know, be focused on other things that maybe even come later. So, you know, we have an audience of people in climate, probably. What would you want other people to be focused on that you're squarely not focused on right now in unlocking nuclear?

• Speaker #0

  Well, I think there's still a ton of like regulatory reform that needs to happen across the world in general. We only have so many resources. We're a small company. We're only 70 people. We focus on four countries to get started. And we have like, you know, we have our government affairs people in country and we found them because they were kind of already the regulations to begin with that like worked for us. But there's still a lot of work to do around the country. So if other people want to take on what is like an incredible like regulatory reform challenge, please like help us do that.

• Speaker #1

  And something that's really interesting that came again out of Founders Pledge was they're actually funding the eco-right to get Republicans, because Republicans will be, and this is very US focused, I know we're talking global, but because the right will be in power, if not immediately in the next four years, like let's get them to believe in these things. And maybe they already do, and maybe it's actually eco-left that needs to be pushed over. There are really interesting pieces there. Do you have any thoughts on like how to actually move the needle?

• Speaker #0

  Oh, politics is so complicated. Like it's so hard. And every time I think I have a grasp on it, like something happens.

• Speaker #1

  Someone else should figure it out. That's your, that's your, your piece. Um, and then my last question, and this is actually my favorite question is like, what do you wish more people were thinking about that they're not, or what questions do you, do you wish people were asking themselves or you about this space that we haven't covered already?

• Speaker #0

  Listen, I wish everyone would ask themselves, like, if you had an energy source, just abstract the whole thing. If you had an energy source that was decoupled from the impact on the environment and was totally abundant, like, would you want it? Like, to me right now, the answer is, like, obviously, yes, right? But I think if you asked a lot of people, the answer would be no. And I think it comes from that, you know, Malthusian perspective as well. And so, like, that's the thing. Like, if you want to have a conversation about policy. first identify like your counterparties, like underlying motivations and values. And if all they want are less people and to just like enrich themselves and have the elite rise while the poor suffer, like just ask them that question and you'll find out what their true motivations are. And then you can decide whether it's gonna be productive to work with them or not.

• Speaker #1

  oh, I had a thought, but I maybe lost. Oh, actually what I was, what I was thinking is like that question I think is great. The other question is just, would you want free abundant energy to cover what we're using already? Right. Like even that, like that is an incredible unlock. We don't have to think of. you know, 10 times more.

• Speaker #0

  We need 10 times more to get the poor up to our living standards. So that's like starting requirement. Like we can't have a conversation unless we're talking about 10Xing world energy. Yeah. Well,

• Speaker #1

  I love that. I think I missed that frame and thank you for jumping in and be like, no, this is why. Okay. I love that. So we're going to go backwards in terms of audience questions. So have you watched Nuclear Now by Oliver Stone? Is it a fair documentary? What could help people understand the reality of nuclear better in a short time?

• Speaker #0

  I think it was totally fair, but... I do want to offer a constructive criticism. The production quality was awful. Like I've seen teenagers make like better produced content in their basement than he did with like his budget, like felt like it used 1980s like production technology and graphics that it was truly awful. And I know that that probably limited the ability to spread his message, which I thought was great to a broader audiences. I don't like he's a famous filmmaker. I don't know how he screwed that up so bad. I just don't get it.

• Speaker #1

  Great. Cool. What geographies are doing nuclear well and or expanding it right now?

• Speaker #0

  I think Poland's got the right perspective. They want to do a full switchover of what is primarily a coal-based electricity grid. And even heating, going to their buildings, comes a lot from coal. They want to do a wholesale switchover to nuclear. And they've invited... a ton of private sector participants to come in and to fill that niche. Now, I hope it stays that way because some of these countries, and you see in Europe, sometimes flip and they're like, no, no, no, we'd rather this be a state-run program. But for now, I think they're doing it right. They've invited companies to come in at all sizes, also the micro size, the medium size, SMRs, quote unquote, the large size. They've invited multiple competitors for each. So if that continues, great. If they switch, that'd be not so great. What was the original question again? Just so I can make sure I answer it with a more broad perspective.

• Speaker #1

  Which geographies are doing nuclear well and or expanding it?

• Speaker #0

  Yeah. Yeah. Okay. And then who else is building a lot? Well, China is building a lot, but like we're not allowed to say nice things about China right now. And then Egypt's building some, Turkey's building some, India's building some. So there is like a lot of new nuclear activity around the world that's like pretty exciting, but they are in these like distant foreign geographies that people don't pay too much attention to. So most people don't even realize that. Yeah. um what is the point thing is it mostly because of the war with russia and ukraine do you think is that when it flipped or is that oh rick perry went over there and like convinced them like he was like nuclear salesman on behalf of the united states government like seriously like that was half his job was going around the world and just being

• Speaker #1

  a salesman for nuclear um it's pretty wild yeah rick perry well no fascinating that the u.s isn't great at getting nuclear but they are going around the world trying to get other people to be great at it

• Speaker #0

  Yeah. I mean, I think it's like, it was a really practical solution. And the thinking, I think, was also that it would create like an American jobs and like an export economy of like US technology. So I think that was like the, the like underlying thesis behind it. And he did a great job. And yeah, he got Poland totally on the nuclear train.

• Speaker #1

  Fascinating. How did the cost of capital evolve in nuclear? What's that? What's that storyline?

• Speaker #0

  Yeah, the cost of capital. Well,

• Speaker #1

  And maybe we can start with where it is today and how you see it today and maybe, you know, key moments in the past.

• Speaker #0

  Yeah. So when we talk about cost of capital, we usually talk about how private markets think about financing projects. And right now, nuclear is fundamentally unfinanceable. And then governments have to step in to offer all these guarantees to create a little bit more assurance for the private capital markets. We are changing that by having the smaller size, smaller capital allocation, shorter build time. I mean, these are the components that go into cost of capital. It's basically how long are you going to borrow money for and what's the risk that the investor is not going to get paid back. You put those together and they come up with some number. And if the number is greater than 20%, not going to happen. Nobody wants to take on that kind of risk in those segments of capital allocators. And then as you get down closer to 10%, OK, it becomes a lot more palatable. They've got other projects that are returning with 7% in the energy sector. So it's like, OK, it's a little bit better than that. So it's like, OK. So that would attract the capital markets if you could get your cost of capital. And I think it would be fair for both parties if you get it to that 10% range.

• Speaker #1

  Excellent. And you all are doing that. That's your aim. You guys have, have you already done that? Or is that something that's coming next year, two years, five years?

• Speaker #0

  Yeah, we've gone out, we've gone out to market to the private capital markets for specifically infrastructure PE. And we've gotten a bunch of letters of intent for our first project financing.

• Speaker #1

  Awesome. Um, and. Who are those initial customers that you all are selling to or looking at in general?

• Speaker #0

  Yeah, so about half of our customers are data centers and the others are heavy industry. So that could be aluminum, steel, pulp and paper, cement, hydrogen, you name it.

• Speaker #1

  Is it data centers because tech companies are more with it? Or is it data centers because there's actually a greater need?

• Speaker #0

  Greater need. Yeah, they are capacity limited. And so their business is being throttled. I've always tried to coach young entrepreneurs. When you're developing a business, when you're developing a product and you want to sell it to somebody, you generally can think of how you would do that in terms of, are you addressing a cost center or a profit center? Are you helping people save money or are you helping people make money? And I've always found that you can have a lot higher profit margins and a lot better luck at getting your first business underway whenever the whole world is against you if you target a profit center first. And so that's why it's such a good pairing for us because they want to make more money. They can't do that right now because they just can't get power. And so they're less price sensitive. And so it's just a better business for us.

• Speaker #1

  Awesome. Cool. And I love that nugget that you just shared for young entrepreneurs. I'm going to take that, run with it for myself and pass it on.

• Speaker #0

  Yeah. And I should mention, I got that like from my, like I didn't come up with this. It's like from my investors who have like coached me over the years.

• Speaker #1

  Yeah. What other nuggets do you have? Well, while we're on nuggets, which other ones come up,

• Speaker #0

  come to mind that you share hundreds of hours. Do you have to sit down and talk about lessons?

• Speaker #1

  We have five more minutes.

• Speaker #0

  Yeah. So maybe, maybe say that for part two.

• Speaker #1

  No, I mean, five minutes for this actually. Like I would love for you to just share, like share a couple.

• Speaker #0

  God. Yeah. Well point me in, point me in a direction. Cause I'm going to talk about anything that's related to a business.

• Speaker #1

  Maybe let's, let's talk about that initial ideation where it's like, what sort of, um, what sort of space in energy is fascinating, right? Like what things have to be true for, for you to get excited about maybe another company in a space or that, or, you know, what, what first principles were you thinking about when you were building less energy?

• Speaker #0

  Yeah. Oh, this, that's the perfect question. Cause I actually have a really good answer for this one.

• Speaker #1

  Good.

• Speaker #0

  So, yeah. So I am like a direct adherent to the Stanford design thinking philosophy and methodology. It's essentially don't like come in with an idea. Stop it. Like nobody cares about your idea. You're not that smart. And everyone has the same ideas as you. So it's like go find like a user. Go find a customer that has a need. Like deeply like build an understanding around that need. Learn as much as you can about their business. And then only then. build your product or your technology to satisfy that need. So like the number one lesson that I have, and by the way, this is hard because what also makes entrepreneurs entrepreneurs is they get excited. They chase their shiny objects. They love their ideas, but that's what gives them energy to move forward. I fell victim to this too with my first startup. And it takes many, many years and discipline to actually be like totally need pull instead of tech push. So I empathize deeply. It's very, very difficult, but it is the way. And you're going to get the same satisfaction. You're going to feel the same ownership over technology whose features and goals are driven by a customer's needs as you would for your just random idea that popped in your head.

• Speaker #1

  Right. And it's so much more fun to actually be unlocking something for customers. And something that I'm deeply learning right now, which I'm guessing you learned was like, once you find that thing, focus and execute really well on that thing. And then maybe expand. But first focus on that, that one or two things right in the beginning, hopefully one thing.

• Speaker #0

  Yeah, I mean, like for us, so I guess I started this like six years ago at this point, the first two years were customer discovery, need finding, like stakeholder engagement, like two full years of just that. That's what we did through the podcast and all those conversations. Then it was like, you know, a few months of essentially like just double checking and pressure testing like the thesis and like finding a way to like de-risk it early on. Then like maybe another year of like serious de-risking. But like the ideas ended there is still executing on the thesis now that we developed four years ago and doing everything in our power not to introduce new shiny objects.

• Speaker #1

  Yeah. Execution is more important than the idea. build it and they will come is false. I totally, totally agree with all those things. Um, what kind of challenges exist in citing SMRs?

• Speaker #0

  Well, yeah, so this is maybe the distinction then between SMRs and we're calling like micromodular reactors or micro reactors. It all depends on, I think with citing, there's like several different considerations. And maybe they're not so dependent on size, but somewhat dependent on like technology configuration choices that one makes. You know, one is access to water. Another is like soil type. Another is, you know, proximity to developed areas, not necessarily because of a safety concern, but just because of like regulatory like differences between whether you build something on the coast or in the country versus like near a city. So I think these are all like aspects that you have to consider in siting and these should inform your technology roadmap and your product decisions rather than the other way around. I mean, that's how we did it. Like if I were to design like an awesome, more efficient system, which like I might have the inclination to do, you would cool it with like water. You tap into a river, ocean lake, something. But if what you want to do is like. Be close to your customers so you can unlock a new business model behind the meter siding and put it anywhere and have much more places to put it. Well, you got to have a closed loop of water and use radiators, like your car radiator, essentially, to dissipate heat into the air, into the environment. But that's a much less efficient pathway. So that's probably the prime example of how we let our customers drive our technology decisions instead of our engineering instinct.

• Speaker #1

  Wait, so which one did you choose? I think I lost you there.

• Speaker #0

  Yeah, closed loop water with fans running the heat over it rather than tapping into local water sources.

• Speaker #1

  So it's slightly less efficient, but worth it because you're closer to the customer.

• Speaker #0

  It's slightly less efficient. It's a lot less efficient, but like it's still manageable and unlocks a business model that is proportionally much more profitable. So we're still net-net like making more money that way, but it's like... hard to conceive of that from the like engineering technology perspective at the get-go. You have to let you like the customer drive that technology decision.

• Speaker #1

  And is that a higher environmental impact because of the water lost or?

• Speaker #0

  Lower environmental impact because it's a closed loop. So we don't lose water. We don't access water. We don't change the water temperature in the environment, that kind of stuff.

• Speaker #1

  Okay. Amazing. What's the talent pool like in nuclear after many years of like a nuclear winter?

• Speaker #0

  It's been pretty tough. I mean, there are people like Bill Magwood who have like fundamentally saved the talent pool when it was at its like darkest hour. Like, there was a period of time where we weren't graduating, like, anyone from nuclear programs, like, a real period of time. I think a lot of people do, like, Clinton administration decisions. And then he, like, went to Congress, and he, like, he was, like, the champion of, like, guys, we got to invest in our talent pool. And he, like, brought back up the graduate number to healthy levels. So they're, like, real heroes, like, him out there who have, like, tried to address this problem. But yeah, listen, in the 60s, like, in the 50s and the 60s, like, nuclear was the coolest thing. So, like, all the most talented engineers went there. And that's how we got so much incredible technical innovation in that time period. But then space became the big thing. And then America just decided we didn't like building things anymore. And then, like, yeah, then that, like, hurts the talent pool for, like, hard hardware and, like, frontier technologies. But I think there's ever, like, Elon has done, like, the most amazing things to, like, bring back excitement to, like, hard physical problems and getting our talent out of the software space and into, like, the hardware space. I think he's almost single-handedly responsible for, like, that cultural shift because he, like, showed that it was possible and, like, he rose to the challenge, like. like against all odds and like was so successful at doing so. So I think like, yeah, Bill Magwood for nuclear specifically, Elon for hardware tech in general has like resuscitated interest in talent pools coming to face problems like these.

• Speaker #1

  Yeah. Amazing. The more that we can make hard tech sexy, the better I would say. Do you know Todd Allen, by the way, at University of Yeah.

• Speaker #0

  He was an early mentor of mine. I owe him so much. All those conversations, I could not have done that without him. He introduced me to everybody and then it kind of snowballed from there.

• Speaker #1

  Amazing. He's been similarly super helpful with Undead Climate Tech and Climate Vine. He's like our nuclear speaker that we bring in.

• Speaker #0

  You couldn't have found a better expert. You couldn't have found a better human being.

• Speaker #1

  Good. And it's actually just because I'm from Michigan and have that University of Michigan connection. But when he talks about how he became the head of whatever, he's very accomplished. And he was like, I just got lucky because I was like the only nuclear guy in my generation. Right. Which like lucky, but of course, he's super humble. But like, I do think that there was a world where like. there were fewer people being graduated and he's super excited that there are a lot more now. But I agree, he's very- Great,

• Speaker #0

  it shouldn't take away from that that he is a rock star.

• Speaker #1

  Yeah, I know, 100%, 100%. I think that's how I responded to him when he said that. What have been the best news in nuclear in the past two years?

• Speaker #0

  Oh, man. I mean, for us, it was like last year, like within a month, we like we cracked the cookie on our like business model called, you know, like 30 plus units in like a couple month period. Or we got we got contracts signed for power from those units. We don't actually sell the power plants. So that was great for us. But I think just in general, yeah, it's just been like one good news after another. Even countries that were historically anti-nuclear shifting their position, Sweden, Denmark, Italy are starting to come around. France, for some crazy reason, started going anti-nuclear and now swung back. So I think it's just like this buildup of like constant good news over the last few years, more than any one thing in particular.

• Speaker #1

  Amazing. Okay. So what I want to do is, that was a really feel good way to end. I want to go down that track and let's do this as closing thoughts. I want to go back to that vision of abundant energy that is, you know, separate from environmental impact, meaning it doesn't, like, it's, it's good for the, it's, it's net neutral, at least for the environment, right? There's always an impact, but it's net neutral. What does that world, like, look like, right? And I think you've, you've painted that picture a bit, but, like, what are we using this energy for? What's, what's that vision? Because I have a sense that you have like this really exciting vision and again that poverty piece like just spend another minute or two on that and that i want to live in a world where that where there's just so much doomsday right in climate and I think if we could have a vision of what's possible and it's actually equitable and it's just and it's something that like we can really get behind as humans right because because of the shared humanity um that would just be personally really great so so that's both a selfish question but hopefully it's also helpful for others but but yeah please um paint me that picture and whatever depth that you're able to you

• Speaker #0

  You know, people scoff at the concept of utopia. And I think. The reason people are so skeptical of that is justified in practical realities. I think the idea of resource constraint, it's like built into our DNA to create competition, which, you know, sometimes can be, you know, competition can take many forms. It's productive when it's capitalism. It's not so productive when it comes to like physical harm caused upon others or societies, you know, clashing for resources. So I am. You know, I don't know for sure, but if I were to philosophize, I would say, hey, if we are able to alleviate the world of resource constraints and like energy is like key to all resources, then we would essentially unlock the potential for a utopia.

• Speaker #1

  Amazing. Okay, great. And we all have visions of utopia. So we can all have our separate visions of utopia, of what that energy unlock is, and of a world that's equitable, fair, and environmentally intact, that still has good water and trees and all the things about nature that we love. And maybe even more of that, because we're able to have more energy.

• Speaker #0

  You said it. You said it. I was going to say, not just intact. Let's make it more. Let's make it even more robust. Let's take the environment as what we like about it right now, and let's supercharge it.

• Speaker #1

  Yeah, great. I love that supercharged the environment. Cool. Let's end on that. Excellent. Well, Brett, thank you so much. This has been really fun for me. I've learned a ton. through doing a lot of this research, I've, and Todd, you know, just like great people, like, it's really helped me understand why nuclear is such an unlock. And so I guess if there are ways that we can be helpful, pull out, you know, put out your calls, if you have anything right now, you're welcome to end with that. But just generally know that, like, the work that you're doing, I think, makes me excited and probably makes a lot of other people excited about this space. And we're rooting for the space. And however, we can be helpful, we will be.

• Speaker #0

  Yeah, I mean, your audience can reach out anytime if they want to get involved in one way or another. You know, anyone who wants to join this mission of, you know, like incredible abundance and prosperity and in any way. Yeah, just reach out. I mean, my email address is like first initial last name at last energy dot com. You can find me and send me there. I got, you know, come. Yeah.

• Speaker #1

  Cool. I love it. Excellent. Well, Ben, I think we are done. So maybe if you want to come up and or I think we're done, guys, this is the wrap up. Thank you guys for joining. Hopefully it's fun. And yeah, thanks, everyone.

• Speaker #0

  Awesome. Bye, guys.