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Jigar Shah: Breaking the Nuclear Statement

Jigar Shah

Tuesday, September 19, 2023

Chris Keefer  0:00  

Welcome back to decouple. Today I'm joined by Jigar Shah jiggers, the director of the US Department of Energy loans program office. And in his previous lives, he has been a prominent clean energy entrepreneur, author and podcast hosts advocating for market based solutions to climate change. jigger, welcome to the podcast.


Jigar Shah  0:19  

Thanks for having me. I love this podcast.


Chris Keefer  0:23  

That's very kind of you to say, Listen, I've got some worries and preoccupations about US nuclear and I might even go so far as to say that the sector is in crisis. I'm basing that off of a few points. There's no firm orders in the books for ready to build nuclear designs in the US, Russia and Korea are eating your lunch in the export market, which China also seems poised to enter. China and Russia are leading with deployment of non water based nuclear technologies, high temperature gas reactors and Molten Salt Reactor coming online in China. And of course, the sodium fast reactor programmed in Russia. I mean, this list is long, but I'll keep going American first of all kinds of designs like the AP 1000, and x 300, being developed overseas and not an American soil, you know, Vogel online last week, but I think shook the confidence of money that the US can deliver on nuclear. So today, I'm hoping to do no less than figure out the diagnosis for what's ailing US nuclear and map out a path to the cure. Just share with them a medical doctor. So I like my little medical metaphors there. But first, Sir, you have an impressive resume. Why don't you take a moment to expand on my pretty bare bones introduction?


Jigar Shah  1:35  

No, look, I mean, I don't know that your bare bones introduction was wrong. I mean, look, the the US nuclear industry is one that has wowed the world with an extraordinary track record of safety as well as operates and you know, engineering excellence and operations and all those things. Right. Which I think is wonderful. Right. And so I think we have a lot to be proud of. That being said, you know, Vogel is the first nuclear reactor that, you know, has been sort of conceived of and turned on in the last 30 years. Really, right. I mean, Watts Bar, and others were sort of like old ones that were completed. And then, you know, I think it's the first one that was conceived of and, and turned on, solely under the NRC. All the previous reactors really started under the Atomic Energy Commission, and then we're sort of regulated by the Nuclear Regulatory Commission. Right. So so there's some new stuff that we're working on here in the US. And, and I, the other thing, I'd say is that, you know, for a lot of the supply chain of the nuclear industry, we have been doing very interesting things to help other folks out, right. So we were buying a lot of our fuel from China and Russia, right, and then the non lugar framework, right, where we were helping the Russians to, you know, decommission a lot of their nuclear weapons and, and then they'll use a lot of that nuclear material, right, in more productive ways. And so the US has done a lot of good around the world. And the NRC, I think, is still the gold standard for regulation around the world. That being said, you know, I think that outside of China, I wouldn't say that anyone is really thriving in the nuclear industry, not, you know, at the scale and speed that we need to meet the threat of climate change. So I think the US is firmly in the hunt, and can take a lot of proactive steps today to, you know, to fully realize its leadership position, given that I think we do have the best nuclear designs in the world.


Chris Keefer  3:44  

Okay, well, that's, that's a great place to start it me to throw too much at you all at once. And I do want to get to know you to trigger that's podcasting that I'm sure I'm sure you enjoyed on the energy gang, which was your podcast back in the day. So you grew up near the Byron nuclear station, I believe, from some of my sleuthing, my private investigator tells me can you tell me how that impacted your views on on nuclear power? I think you had a real start in the solar side of things. Often there's a bit of antagonism between the camps. Tell me more about that.


Jigar Shah  4:17  

Yeah, I, you know, I was, I think 10 years old when Byron turned on, right. So it's like thing 1984 So it was a big news story in the area. I grew up in Sterling, Illinois, which was about 340 miles or 50 miles from Byron and, and Byron was in our sports conference for some of the sports that I played. So, you know, when you'd go to Byron, you notice that they had, you know, awesome facilities, right, like brand new amphitheater, a great indoor swimming pool and all those things that a nuclear community usually benefits from and so, you know, I don't know that I you know, got involved too deeply into nuclear power or, or those things But you know, you hear all these positive stories that came out of it, which was reinforced by what I saw with my eyes, which was great. And then, you know, when I was around 16, I really got involved in energy and, you know, fell in love with both nuclear and solar. But at the time, you know, nuclear was a basket case. And there weren't really any, you know, ways to build nuclear. And solar actually had a pathway to being fully realized. And so, you know, my career took me through the solar phase, but, you know, certainly, I've always been, you know, recognize I've always recognized the benefits of nuclear.


Chris Keefer  5:41  

And now you're heading up the loans program office, we have a pretty international listenership. So if you could take a moment to explain, you know, its mandates and the nuts and bolts of how it works, I think that'd be awesome to provide some context.


Jigar Shah  5:54  

Yeah, I mean, the loan programs office was invented in the 2005 Energy Act, and then, you know, really came into being during, you know, the Obama era. Stimulus Bill, right, the era stimulus bill. And so that's where we, you know, issued around 30 plus billion dollars worth of new loans. And, you know, we've been monitoring and managing a lot of the construction of those loans for some time, Vogel being one that's been in construction, the longest and unit three coming on board soon. But the ultimate conception of the loan programs office was that there were certain sectors that just weren't getting a fair shake from the private sector, not because they're bad technologies, but just the private sector didn't feel like it really had a mandate to provide debt to those markets. Nuclear was first in on that list in 2005. And then, there were fossil energy and renewable energy titles that were added later. And then the advanced technology vehicle manufacturing program, where we famously loan money to Tesla, Ford, Nissan, and others. And then most recently, we added the tribal energy loan program as well as what's called 1706, which is allows you to replace retool repower existing assets. And so we can use that to turn on, you know, recently shut down nuclear reactors, or to add new nuclear reactors to existing footprints, or to convert a, you know, old coal plant that's, you know, seeing the end of life to a nuclear plant.


Speaker 1  7:33  

Right. That's fascinating. I didn't realize that the LPO had nuclear in its mandate, right from the get go. And it seems like kind of the perfect vehicle, as you were saying to make a sector that's struggling, thrive, may be jumping ahead here. And it's obviously a huge question. But what role has the LPO played so far? Were they involved in helping to finance Vogel, for instance? And if not, what sort of things are you dreaming up in your current position as a way to, to get this industry back on track? Given that the challenges seem to be so much, I mean, there's many challenges. They all say nuclear is a bit like the Olympics, and your athlete needs to be in top shape and Everest in all sorts of ways. But from that financing perspective, give me a sense of the of the history again, and potentially the path forward.


Jigar Shah  8:17  

So the Loan Programs Office is basically a debt vehicle, right? So by definition, we're private sector led and government enabled, right, so the private sector has to tell us what it wants to do. And then they have to apply to us for a loan. And then we evaluate the loan and make sure it meets the reasonable prospect of repayment, and then we issue a loan. So for Vogel, we provided three loans, one in 2014, when in 2015, and one in 2019. And so we've got, you know, roughly $12 billion of exposure to the Vogel nuclear plant. And, you know, when you look at the way in which that deal was structured, I think we have every confidence that will get paid back and fall and that the project will perform as desired, right. But I do think that we are, you know, definitively pro capitalism here. And I think the nuclear industry, frankly, hasn't been for a very long time. And so the question really becomes, How does capitalism and nuclear interact with each other because when I hear case studies, from people that they want us to copy, I hear, hey, trigger would be really good if the government just did everything and left the private sector out of it, and just let us like, make all the money on the back end, or I hear, hey, it'd be great if, you know, like, we could just, you know, just have all the US military bases do this for us so that we didn't have to do it right in the in the utility sector. And I think the loan programs office, you know, rejects that as the central premise for how the nuclear industry should operate. And we believe the nuclear industry is capable of being a professionally run industry that actually knows how to construct things on time and on budget, and you know, figures out how to do proper planning upfront and integrated project delivery models with their contracts and all those things. And I do think the Loan Programs Office has more recently played a very useful role. And you know, slapping the nuclear industry silly, and getting them to understand what it means to actually show real leadership. I think they were complaining like a small child, five years, or six years ago. And today, I think, the level of seriousness that has come out of the nuclear liftoff report that we published, as well as a lot of the fact finding missions that we've led into what went wrong with Vogel, and what it means to actually run a private sector, led government enabled nuclear industry, I think has led to far more productive conversations today than we've had in decades.


Chris Keefer  10:52  

I mean, certainly looking at the, you know, eyewatering, cost of Vogel, I think, just chatting with a friend fact checking this bit about 12,000 per kilowatt and overnight building costs. And I think in the numbers that of China, I think, are probably rightly looked at as maybe being unreliable. But certainly Korea, you know, three to 5000 per kilowatt hour, that's, you know, half to a third the cost of what's happening in the US, you're mentioning this desire for it to, you know, have capitalist flavor to the US nuclear industry, in terms of the LPO support. You know, Korea is obviously a different model, it is a capitalist country, but they are pursuing, I think, a very standardized approach with a kind of a national design. How do you see the kind of differences there? I mean, I think things are just so different in America compared to a country like Korea, but I mean, also a capitalist country, and one that is, is delivering nuclear, you know, fairly competently? What do you think we can make capitalist


Jigar Shah  11:47  

is a strong word, when referring to the nuclear industry in Korea, right, you're talking about basically a fully government backed program, where the private sector takes almost no downside financial risk. And, you know, they're building the same reactor over and over again, which is great. But like you tell me right now, do you think the Koreans are going to solve all the problems in South Africa converting all their coal plants to nuclear with Eskom and the state of the South African government? Are you confident that they're going to do the same in India where, you know, you've got a whole bunch of state run electric utilities, you've got a couple of federal entities and India, etc. Like, think about where all the coal in the world is being burned? And you tell me whether the UAE Korean partnership is what you would bet on to, you know, figure out how to convert all of those coal plants in nuclear?


Chris Keefer  12:44  

I mean, I would say it's, it's more credible. I mean, the UAE is obviously very different country from the countries you're mentioning. But you do have an established record domestically of delivering nuclear? Well, and you have I mean, what's the counter example in terms of, you know,


Jigar Shah  12:58  

counter examples, but I think you're off your rocker. I mean, the notion for a hot second, right, that the Japanese government would go into South Africa using J basic building, you know, you know, a nuclear reactor there. And then everyone would fall in line, right, that the World Bank would provide financing, that you'd get debt from the IFC, etc, that would never work. Never in a million years. I mean, I think it shows a gross misunderstanding for how the power sector has actually rolled out across the world. The vast majority of these projects are project financed. They're not states financed, right? So you're saying, hey, Jager, all of the places around the world that have state sponsored financing, we have success stories in and the other 98% of the world, we have no successes. And so I think you should use the case studies in the 2% of the world where we have all the stars that are aligning, and prove that we can serve the other 90%. There are no counter examples to that whatsoever. It's just a fanciful argument.


Chris Keefer  14:06  

Well, I don't think I'm making an argument here that that is the only approach. But there are so few examples of countries outside of say, right, I mean, Russia is the dominant nuclear exporter right now. I guess what worries me about of nuclear reactors, large nuclear reactors? Yeah,


Jigar Shah  14:22  

that's like there's like four. And so now we're saying like they're the dominant provider of large nuclear reactors? Well, I


Chris Keefer  14:30  

mean, they are I'm not saying they should be or that is the don't get me wrong. Don't get me wrong.


Jigar Shah  14:35  

The reason I'm getting you wrong is because I feel like we have a bunch of people who are pro nuclear in Canada in the United States who need to get their head screwed on straight. We are in a place right now. Where we need nuclear to step up and step up big at the gigawatt scale, right? The 100 Hundreds of gigawatt scale right? And we're not having a serious conversation. Like what people need to wonder Stan is how global finance works. Right? That's the conversation you had in your last podcast. And so what exactly is it that we have done to mobilize capital around the world? We've created monopoly utility companies, right. And many countries around the world, including Caribbean islands, and, you know, India and other places, right, we have financing structures that support those folks. Right? We have, you know, refueling and maintenance mechanisms around the world. Right. So let's have a real serious conversation about how this works. Let's leave the engineering, you know, sort of Utopia behind. And let's have a real conversation around what it is that you think, and your compatriots think, is necessary, from the US government, or other related governments, whether it's Canada or the UK or others, to actually get this done at speed and scale


Chris Keefer  15:55  

will paint for me your vision, again, I'm not bringing up what I think are perfect examples or models, as I said, I think there's, you know, a severe lacking of nuclear exports to nations that desperately need nuclear energy. But what is your alternative? And is there any historic basis for it in terms of in terms of well as


Jigar Shah  16:12  

the person who will help you build the first trillion dollars of solar? Yes, there's an alternative to it. And the fact that folks don't want to recognize the fact that the sheer, just extraordinary nature of what solar and wind has accomplished is a huge problem. Right? You're talking about over 100 countries now that have gigawatts of solar operating as well as wind, right. And the way we did that was to figure out how to project finance every one of those deals, including in places like Pakistan, where nobody wants to do business. Right, right. We've figured out how to assemble private sector capital in Pakistan.


Chris Keefer  16:56  

The distinction I'm making here, jigger is I think wind and solar are relatively easy construction projects. No, they're not building your bill. Well, let me let me explain myself. You're building me compared to nuclear? Okay, I think we could both agree on that you're either no, you say wind and solar easy that wind and that nuclear and wind and solar are similar in their construction complexity, their ease of construction, their ease of project delivery,


Jigar Shah  17:22  

I think you guys have created some sort of construct, to convince yourselves that the reason why nuclear hasn't succeeded is because they're complicated. Nuclear isn't complicated. Nuclear is, is structured perfectly, in a way to never be able to be built by a Western country. It's basically saying, We have no, we are going to make every single nuclear plant an average of 10 to $15 billion each. How about we start there, right, there is no insurance company, or EPC contractor that is capable of wrapping such a large project, right, there is no utility balance sheet that's able to manage that comfortably. And in fact, almost every single nuclear is every single utility, bankruptcy that's occurred in the last 40 years has involved nuclear, so everyone's scared out of their mind, and nuclear, to the point where Wall Street said, we will never fund nuclear, and we had to create the loan programs office in 2005. To do that, right. So now you're saying well, no, it can't be that it can't be that we screwed up the whole concept of finance, that like what it is, is that nuclear super complicated, it's so hard to build, know, you know, what's complicated building a data center, you know, what's complicated is building, you know, like a, you know, a hospital or a facility that actually, you know, has to create petrochemicals, have you been to an oil refinery, extraordinary piece of engineering, right? We do that all day, what Dow and DuPont used to do in China and other places to create these, these, you know, cracking facilities and all these facilities, we know how to build complicated hard stuff. What we don't know how to do is to manage mega projects at the $15 billion scale. And, frankly, China's proven that it can't do it either, which is why all of its nuclear reactors are behind schedule and over budget. Now it's getting better at it. And it's it's optimizing around single design, which is great. But like this is not because solar and wind are easier. You know, any knucklehead could do it. It's because we figured out how to get the world's largest EPC contractors to create an entire division to do something that's very complicated in a straightforward and easy manner, where they replicate it over and over again. And we were able to make it $2 billion or less, so that they can get insurance. They can work through Miga at the World Bank. They could work through all of the different features that are available and actually work with the countries that want them in a way that works. And in fact, what happened was, some of the countries couldn't handle 2 billion. So we had to downgrade a lot of the projects, 200 megawatt and 200 megawatt projects, because that's the only thing they could handle from a risk perspective, when you asked all the parties around the table, right. But I just think that, like, I feel like we as you know, human beings, and certainly as Americans can accomplish the impossible, like we could do whatever we set our mind to. Right. So I have no doubt in my mind that we can figure this out. But we all have to figure out what the playing field looks like, what the what the board looks like, and then figure out what the Venn diagram leads us to, you know, choosing as the right design is the right approach is the right set of tools that we may need to add, because we don't have them today. So let's actually solve the hard stuff instead of shouting into the wind, which is, frankly, what the nuclear industry has been doing for 10 years.


Chris Keefer  21:03  

Yeah, I mean, I think we'll have to agree to disagree. And obviously, maybe a few points throughout this interview. I think there's some parallels in terms of construction complexity with as you're mentioning, these oil and gas facilities, but I will maintain that it is far easier to to as a construction project to build a large wind and solar installation than a nuclear plant. Let's leave that aside.


Jigar Shah  21:21  

It makes us water at night, you should agree with whatever you want to, okay, sure, sure.


Chris Keefer  21:27  

helped me understand that what your vision is going forward, because you've critiqued mine, and maybe you're unscrewing my head or screwing it on tighter. Let me get a sense of of I don't.


Jigar Shah  21:38  

My vision is a process. Right. So what I'm saying is that when you look at what happened with Vogel, you and I both agree that unit three, you know, was way over cost and over budget, Unit Four was about 30%. cheaper, and that if we had built, you know, VC summer, it probably would have been cheaper still, right? It probably would have gone their way. But you try to go to South Carolina and get them to restart that project and rate base it No way in hell, right? It bankrupted the utility to the point where it had to be, you know, forcibly sold to another company. Right. And so now, we've got Poland that wants to build those reactors, which is great, and we're going to support them 100% to do that. And then if they succeed, we'll bring it back. But you know, what we are as private sector led government enabled, so we've, we've interviewed everybody in the industry, and they've said that they want to do SMRs, right? So I'm like, okay, you know, if you want me to lobby them to a p 1000s. I can, but they don't want to do them. So that here I am. Right. And so


Chris Keefer  22:41  

you're limited, you're limited by what what the industry is asking for is what you're saying? And I guess me because you have, right? And in so doing, I mean, are you developing opinions on the best path forward? Or it's simply, you know, having to conform to markets as they exist? Now? I mean, I know that, you know, you have a limited role here. So I'm not trying to, you know, take you out of your wheelhouse.


Jigar Shah  23:03  

I mean, I have I have opinions, right? But it doesn't really matter what my opinions is first, because I'm not the smartest person in nuclear. But second, because, you know, like, we have to play this, you know, convening role, right? So we're equally impressed with, you know, new scale, you know, whole tax new reactor, G Itachi. Right. The Atrium reactor, the TerraPower is building right, x energy. And there's others, right, we provided a RDPs to Kairos. And, you know, Oklo, and all sorts of, you know, reactors, right. So now, I go to folks and say, Hey, you ran an RFP? Which one do you want? Right? And they pick one, right. So Darlington obviously has picked the GE Hitachi reactor, which is wonderful. Right. And so they are now moving forward with that. And then OPG, TVA and Sentosa has said, Look, we learned the lessons from Vogel, and we're going to spend a full $400 million up front to complete the design, before we actually go in so that we can actually have all of the, you know, pieces in place. And we can learn from the experience at Palo Verde and other places where it went a lot more smoothly when you actually had the designs completed. Right. And so that's happening separately, there was a lot of lessons learned out of Vogel around the integrated project delivery model. So OPG has put forward their integrated project delivery model, which is really great. And TVA is now saying we think we can improve upon that model. So they're working through all the contracts to improve upon those models to make sure that there really is, you know, a level of synchronization between all the contractors and that they don't have the incentive to basically just cost plus the contracts or run up the score. Right. There should be real consequences to them if they don't do what they say. But the other thing that they're doing is that they're not lying to themselves, right. I mean, I think there were a lot of people that were very smart in 2019 only 10, who said that Vogel was going to cost double what folks were saying that it was going to cost, right. And, and so when you look at the modeling work that TVA and OPG are doing, they're not lying to themselves, they believe that the first reactor will be a lot more expensive than, you know, $2 billion. And they believe it'll come down in cost when, as they build the four pack, and the, you know, the team that's installing it are trained. And we outline that cost reduction curve very clearly in liftoff report that we published. And that comes from industry, right? So I don't need to guess what industry believes that is, what they're telling us is going to happen, the first reactor is probably going to be $10 A watt, maybe, you know, $12 a watt, right, just like vocal, and then it'll come down by 30%, and then another 10, another 10. And we actually show you exactly where that cost reduction might come from. And that's all from interviewing our friends at OPG and TVA, and, and others, right. And if you amps gets to the point where they're going to build the new scale reactor, right, then we'll classify exactly what they're saying, as well.


Chris Keefer  26:11  

Just out of curiosity, as a Canadian is the LPO funding any any portion of the Darlington extra 100 New builders that outside of Canada and outside of the purview?


Jigar Shah  26:20  

Yeah, we're not allowed to fund anything outside the US. But to the extent that they are buying equipment from us suppliers, right, we can fund those us suppliers to scale up their production capacity to be able to meet the needs in Darlington.


Chris Keefer  26:34  

Gotcha, gotcha. Can you give me a sense of like, is there a certain amount of I've heard 40 billion is the figure I've heard bandied about in terms of the the total amount of loans, the LPO is, I might be completely off on that. That's okay. Um, is there any kind of percentage? Is there any kind of percentage breakdown, you know, per sort of technology that you guys are pursuing? And can you give me a sense of that.


Jigar Shah  26:53  

So the, the, starting with the low capacity, so the 1703 program, which is the, you know, one of our oldest programs, which you know, initially started with nuclear, and then you know, it's been expanded, all of the sort of bucket isation of the money is gone. So it's first come first serve, it's about $73 billion worth of loan authority there. So you know, so that's available to all go into nuclear or all go into fossil, we just take the applications, one at a time as they come in. And in a process of loans. We've got about $90 billion worth of loan applications. And I think, for that program, and we've got about 60, and a half billion of that's for nuclear so. So we're excited. And not all of that 90 billion is going to, you know, go to the finish line, obviously. So we'll see. But then we also have the $250 billion 1706 program. And that program is to retool repower, repurpose. And so we could build, you know, 300, you know, battery racks, you know, three hundreds if we wanted to enter that program, right. So like, we could put $200 billion in a nuclear into that program. And right now, we're not on track to using all that $250 billion worth of capacity, the types of things that people are looking for, for that is, you know, re conducting transmission lines, we've got some applications in for folks who are taking old natural gas plants, and you know, reusing that interconnection point, because a lot of them are running it one to 9% capacity factors, right. They're using their connection point to put in solar and battery storage and lots of other things. Right. But I do think it's important to note that, that there's plenty of resources at this point, right. So there's 73 billion and 7003, and up to 250 billion for nuclear and 1706. And so I don't think there's any lack of resources. I think we're we're right now seeing five or six serious efforts in terms of folks who want to build a new nuclear plant in the United States, which is great. And, you know, we're hoping that that becomes 25 3040.


Speaker 2  29:01  

Can you talk about who that is? Or is that confidence confidential? So


Jigar Shah  29:05  

I can't I can't say who it is. But I think you guys know, through what's public, right. I mean, like, you know, Duke has clearly put nuclear that interfere resource plan Dominion has as well, I think energy Northwest has provided some, you know, vocal support for the X energy reactor. And so, so you've got some data points in the public.


Chris Keefer  29:26  

So I may have I may blank for a second there. But again, 40 billion was the initial kind of sum. You mentioned these very large numbers in terms of applications. Yeah,


Jigar Shah  29:34  

I don't know where 40 billion comes from. So it's 73 billion in 1703. And it's 250 billion in 1706.


Chris Keefer  29:42  

Can you explain what 1703 And 1706 means?


Jigar Shah  29:44  

So 1703 is the original old school program that we had Gotcha. That, you know, has always been able to fund nuclear. And it relies on innovation, which is, you know, nuclear is, you know, a big fan of innovation, maybe too much innovation, as a jump From design to design, and then 1706 is to retool repower, repurpose. Right. So either putting new nuclear plants and existing nuclear plant sites, or, you know, converting retiring coal plants to nuclear.


Chris Keefer  30:14  

Is there a significant funding going towards wind and solar technologies that have the LPO? Or is that a technology? That's I don't think


Jigar Shah  30:20  

we're doing any struggles are fully mature now. Okay.


Unknown Speaker  30:23  

Batteries, batteries, obviously.


Jigar Shah  30:27  

It depends like so we have long duration energy storage batteries, which are, you know, next generation coming in, we've got alternative, you know, alternative. Chemistry is right for auto manufacturing, etc, that SK and LG are promoting, right. So we announced, this is out of the advanced technology vehicle manufacturing program, we announced lithium ion battery manufacturing for GM LTM, as well as blue oval. I think we Yeah. So I think there's, there's certainly a lot of interest, but we don't have any lack of loan authority, I think that the the challenge we have is getting the nuclear industry to actually respect the 73 step process they need to go through. And actually, you know, start getting to completing the steps as opposed to complaining about what other people have


Chris Keefer  31:16  

said that 73 steps. What do you think are the key things the magically to break the stalemate to get utilities ordering nuclear plants? Is it gonna is it gonna take I think


Jigar Shah  31:26  

we're on track to breaking the stalemate, right. I think I think what the nuclear industry, the nuclear utilities want to see is, you know, a lot less fighting from the nuclear industry, right? It's not great to love nuclear, when they're sort of anti economic development in the States. Right. A lot of the the economic development happening in the States right now are solar and wind. So I think we've got to stop the infighting between the parties, it just causes people to hate nuclear


Chris Keefer  31:54  

do at the level of industry, or just, you know, all going everywhere from the industry itself. Because


Jigar Shah  32:01  

all day long, folks are like constantly bad mouthing other people's technologies under their breath, not I need to stop it, okay, because we need all of it. We need all solar and wind as much as we can possibly build, and as much nuclear as we could possibly build. And even then, I think we're gonna fall substantially short to what we need for chat GBT at a low needs 10,000 megawatts of data centers. Yeah. Right. So if people want to live in a modern world, right, they're going to need a lot more electricity. And so we need all of it. So I need to fix what's broken with the nuclear industry. And what's broken with the geothermal industry, the low impact hydro industry, there's a lot of industries that are not scaling. And they're basically spending a lot of their energy, bad mouthing other sectors, instead of figuring out how to get through their process, which is going to take 10 years. It's not something that you we fix in like, you know, a weekend, right, there has to be $400 million spent, to figure out how to get, you know, all of the designs completed, then you've got to take the 13,000 people that were trained it vocal, right, and you've got to figure out how many of them are travelers, how many, how many of them are going to leave the workforce and go get another union job in Georgia and South Carolina because they don't want to move? Right, we got to figure out how we actually train workers in a way that actually works. We've got to figure out how we build supply chains, you saw the governor of Tennessee say that they're going to put up $200 million to help support more supply chain growth in the Tennessee, you know, region, near Oak Ridge National Laboratory. So that's great news to see folks thinking about suppliers, right? But I feel like for whatever reason, people are just like, animated about, like, why aren't we doing this faster? We're not doing this faster, because we forgot to go through the steps that we need to go through over the last 10 years. So now we got to start now and go through the steps over the next 10 years. I mean, there's no better time to start going through the steps and this week.


Chris Keefer  34:07  

So I mean, you're you're famously quoted as saying, deploy, deploy, deploy. With regards to nuclear war, do you think that, that balance matches with with innovation?


Jigar Shah  34:20  

I mean, but again, right, like, we can do all of it. I think you and I both know that it is unlikely to be a Gen four reactor that builds the first, you know, reactors here in this country, you know, over the next, you know, three or four years in terms of starting construction. Right. And, you know, you saw that with the selections at TVA and OPG made, they, you know, chose Gen three plus reactors. And largely they chose them I think, because they believe that they can get those reactors through the NRC and the Canadian regulator in a straightforward fashion because they're basically just improvements on a existing designs. Right? And then separately, I think we're a huge fan of what TerraPower. And atrium is doing as well as ex energy. And those folks will clearly take longer to get through the NRC. And, and the Canadian regulator if, you know, they choose to build them in Canada, because they're new approaches, right. And new approaches require a little bit more work to, to go through the process. But my sense is, that's why they chose the Gen three plus reactors, right? Because they thought that they would move more confidently through the process.


Chris Keefer  35:33  

So I James Carlin Stein on recently, and he was talking about the initial sort of r&d for the existing nuclear fleet. And that obviously, came out of a model where government did most of the r&d, and the private sector focused mostly on deployment. You know, we have the example of SpaceX and other very complex, high technology industry, which has completely out competed, you know, the government r&d. I'm wondering, do you see parallels between the space and nuclear industry in terms of your vision of innovation? Now,


Jigar Shah  36:04  

I think the government will always have to do innovation. And remember, the private sector didn't do any of the deployment in the 1960s 70s and 80s. That was all right. I mean, that was really all government top down stuff. Right. So like, I don't know that. I would credit the private sector there, I think, in general, but we moved away from that, right, the Department of Energy was formed out of the Atomic Energy Commission. And, you know, that's where we are now. But I also think that when you look at SpaceX, right, there's that private sector industry for them, right, which is launching satellites into space. And it used to be, you know, 100 million dollars, a launch or whatever, with Boeing, and now it's our Lockheed, and now it's like 10 million ours launch or something like that. So, you know, they've innovated, but they also have a customer, there is no customer for, you know, private sector nuclear innovation, right? If someone said, you know, here's $1.8 billion, which I like, is what I'm seeing right now. For instance, in fusion, like, I love fusion, like I mean, who doesn't love fusion? Right, but putting $1.8 billion into a private sector company and fusion, and believing you're gonna get a venture capital like return is bonkers, right? Like, he is very obvious to anyone who has studied clean tech, that the only venture capital returns are in scale tech, right? There's no venture capital returns in deep tech, like Tesla was not a deep tech investment. Tesla was a skill, tech investment, all of the technologies that they used for the first model s had been invented previously, through r&d that doe and others had done, they just put it together in a nice package that people wanted to buy. And then they've, of course, innovated the crap out of the software and all the other stuff, which is fantastic, right. But I think it's just critically important to recognize that the government is essential in deep tech investing, right, which is what nuclear is. And the only thing that venture capital or private equity, or others can do is scale tech. Right. So and I think that's fine, right? It's just it's just a thing that people just need to like, you know, I think, you know, understand,


Chris Keefer  38:02  

am I misunderstanding them that most of the innovation work happening in the States is driven by private sector, venture capital and not government labs? I mean, there's obviously some overlap, but I'm thinking of the the technology, there's


Jigar Shah  38:13  

almost no innovation happening out of the private sector. So


Chris Keefer  38:17  

like, the nature in reactor, for instance, is that government r&d,


Jigar Shah  38:22  

money did we put into it from the government over like, 40 years, that's not a new design even, right, like we we started doing that work 40 years ago, the same thing is true with, you know, the amount of money we put into new scale, the amount of money we put into the X energy concepts. I just look, I'm not suggesting that the private sector hasn't put money into things I think they have. But the private sector is best suited to actually finish the job, right to take an r&d technology and figure out how to make it commercial, and how to put it into the marketplace. And that's scale tech. Right. That's not deep tech. You know, I think,


Unknown Speaker  38:58  

I think that's just think it's,


Chris Keefer  38:59  

I think that's great framing, and there's a good faith question in terms of Am I incorrect, and I'm glad to be corrected. So you know, know that I appreciate that. Well, and


Jigar Shah  39:07  

you know, that I love what you're doing in your podcast, I'm being deliberately argumentative, because I'm trying to get through to people, because I feel like people are just, you know, particularly in this industry, if people are kind of nice to each other. But they're not actually talking about the hard truths. There's not that many people who are actually as passionate as you are about nuclear. Right? There's like, I mean, you're actually quite passionate, but also like, there's not that many people that are passionate, right? But when like Robert Bryce comes on, or some of these other folks come on, and they're like, here's all the, you know, eight, like super simple ways that we can solve this problem and actually start building nuclear. It's just disingenuous. It's just not true. And when you think about how much work we're doing every single day, right, and you know, frankly, I would say that even GE Itachi is not doing as much work on creating the marketplace for getting the utilities to buy They're reactor than we are, which is weird, right for the government and the loan programs office to be softening the ground better than G Itachi. Is, is weird, right? And so I just need everyone to start, like, you know, just getting a little more focused, and how they can actually help get the nuclear industry to the finish line, as opposed to why don't we have the shiny toys that these people have


Chris Keefer  40:27  

over there? I think there needs to be far more red teaming. I'm actually quite bearish on many elements of the nuclear industry, particularly in North America, but also globally. But I think that's a good place to start in terms of recognizing where we're at, and how much work needs to be done. And what drives me is just this desire to understand it better. So I do appreciate your your


Jigar Shah  40:48  

No, I appreciate that. In terms of,


Chris Keefer  40:52  

do you think we're at the end of unnecessary nuclear plant closures, premature nuclear plant closures, obviously, competitive markets, cheap natural gas prices have had their impact? I think I'm referring more to politically based closures. We're seeing potentially Palisades coming back from the dead. It's too late for Indian Point. I guess my concern here is that we're starting with such a deficit over the last 10 years, I think 56% of returning capacity in 2021. Was nuclear. This is not a good sort of foundation to be building off of, and we're on the treadmill, but we've been falling backwards. Do you think we're at the end of premature nuclear plant closures? And why if so?


Jigar Shah  41:29  

Well, certainly, it's the policy of this government to be at the end of premature nuclear plant closures, right. That's why we fought so hard to keep Diablo Canyon open, we worked, you know, really hard on getting the civilian nuclear credit program in place. And so, you know, and I think when you look at where wholesale power prices are, I think there's a recognition by most utilities that they have over invested in gas. And that when you know, we had these polar vortexes and, and, you know, these heat domes, that gas has been unreliable at the time at which they needed it the most. And so they need to diversify their portfolio. And so gas has a strong role to play. But that other clean, firm power generation sources also need to be prioritized, whether it's existing nuclear plants or whether it's new nuclear plants. But the one thing I would say about the nuclear industry and this is it. Part of the challenge here is that people need to recognize human behavior. Right? It's really easy to shut down a nuclear plant. When there's no, there's no like positive prospects for nuclear, right. Like when you're bearish? It's really easy to say, Well, if you're bearish Brown, new nuclear, why would we keep this nuclear plant running? Right? It's a natural thing you would ask why then, so


Chris Keefer  42:48  

they should be they should be competitive to get paid off nuclear plant with, you know, rock bottom fuel costs. You should be competitive. But we're in these markets, so called competitive markets, which have made them uncompetitive, and I think a lot of that has to do with subsidized wind and solar.


Jigar Shah  43:02  

Right. But I think you're being entirely logical. Like, what I'm saying to you is, that's not how the market works, right? The way this works is, is it people want to be bullish about the future? Right. So you have to give them something to be bullish about, right? We're going to keep this nuclear plant running. Right. And we're going to subsidize it from the state of Illinois coffers. Because we believe that new nuclear designs are so awesome, that we don't want to lose this workforce. Right? We want to keep these going. Because yes, this is a temporary blip in natural gas is prematurely cheap, but it won't be forever. And frankly, that's the American Gas Association saying that they think that the right price for gas should be 450 to $5 million Btus. Right, at which point nuclear is very cost effective. And but like you have to sell someone a vision that's hopeful and positive, otherwise, they're not going to invest in the previous generations technologies.


Chris Keefer  44:00  

Are you really saying though, that this pivot back towards a nuclear to nuclear being more popular to the government intervening on policies or assisting to advocating which has to do with, you know, a psychological impression? Or is it more real politic of energy security of the US becoming an LNG exporter and gas prices are being less arbitrage? I guess, as as natural gas?


Jigar Shah  44:19  

You've got to separate all the different things that are happening, right? The real politic is like from the fact that, you know, because of the Ukraine crisis, you've seen a tremendous amount of interest from Eastern Europe and new nuclear plants. You're seeing, you know, a lot of interest at the federal government level and the United States in new nuclear plants, right. But plant closures are being done by local state Public Service Commission, so they're not being done by the federal government and no amount of lobbying from the federal government can do. Right. I mean, the public's California,


Chris Keefer  44:50  

they're being saved by the state. That is, if I'm not incorrect there, right. But that


Jigar Shah  44:55  

is the mechanism by which it happens. Right? So the federal government wrote a letter and And you should keep it open and we have the civilian nuclear credit program, you should use it all those things. Right. But ultimately, like my point is it's psychology matters locally. Right? The that and I would suggest to you that this administration in our office has been more bullish about nuclear then nuclear advocates, right? Like when you talk to like nuclear advocates, they're saying, hey, jigger, let me explain to you that 43 reasons why your approach won't work. And I was like, Well, that seems like a very productive way of using your brain power.


Chris Keefer  45:32  

So getting back to the apple, I mean, my understanding is that California, in terms of the energy modeling going forward was looking increasingly like there's risks of blackouts that Diablo Canyon is a clean, firm source of of electricity that was necessary to pin up the grid. Potentially, you know, Gavin Newsom has some presidential ambitions and leaving behind a state that's teetering on the edge of blackouts frequently. That's what I see as the driver of the change on Diablo Canyon. It was not a nice to have nuclear reactor that people thought, wow, advanced nuclear is coming. We should keep it around. It was a need to have nuclear reactor. No,


Jigar Shah  46:04  

no, no,


Unknown Speaker  46:05  

you disagree with that? Of course, I


Jigar Shah  46:06  

disagree with it, they could have just built hundreds of gigawatts of diesel generators, which is, you know, like so like, there's lots of things that people can do. My point to you is that when Emery Levin's right says to everybody, that the money spent on nuclear is wasted, and that we shouldn't spend any of it and we should just build more solar and wind and battery storage. Right? That is a very comfortable thing to agree with, when there's no prospects for building new nuclear anyway. Right. Like, you know, why would you stand up to that argument if like, no one's building new nuclear anyway. Right. But because this administration has figured out a way to get people to be hopeful again, right, the vast majority of climate people have completely changed their point of view on nuclear over the last two years, because of the incessant amount of discussion that we're talking about, you know, when nuclear designs and when that started before the Ukraine crisis, right. I mean, as somebody who is probably I think, the most followed person and energy and LinkedIn. Right, like, I've been talking about nuclear every single month since I got into office. And people were like, Huh, well, jiggers talking about it, maybe there's something there. And then the secretary provided the most full throated support of nuclear ever provided by a secretary of energy at the Guggenheim conference in early 2022. And people are like, well, crap, like, how did that happen? And so, so that then creates the space for Diablo Canyon to get saved. Right? Like, I just feel like people don't understand that, like, you know, everything around here is like a shark. You have to keep swimming. If you stop swimming, then like, you die, right? That's how it works. Right? And so I just think that right now, what we need is for the nuclear industry, yes, to read team things. And yes, to provide their critical feedback. We want all of that. But they also need to say, what is it exactly that the US and Canada are bringing to the table? Right? That's different than the Japanese, the Koreans, the French, right? The Russians, right? And what's different is that we actually are figuring out the hard stuff. We're not taking shortcuts. We're not saying oh, why don't we just put $200 billion of cold hard cash out of the US Department of Defense and just build a bunch of nuclear reactors? No, we're saying how do we get Dominion or Duke or energy Northwestern others to do new nuclear.


Chris Keefer  48:36  

So you were just saying that, in your opinion, there's been an overbilled of gas in the US. I'm looking at, again, 2021 figures of new power generation in the US. Almost all new plant capacity at that point was when solar and batteries and the 81% natural gas was 16%. Nuclear, they were still thinking they get vocal on I think around that time was was 3%. So I mean, do you see there being if natural gas has been over deployed? Almost all new generation is wind, solar and batteries? Do you? Do you feel like there's a over deployment of that there's a need to diversify and balance the overall generation portfolio going forward?


Jigar Shah  49:13  

Yeah, but I mean, if we needed to x the generation in this country, right of clean generation, you don't do that by taking your foot off the gas and wind, solar and batteries. You do that by unlocking all the clean first generation technologies, right? So enhanced geothermal, low impact Hydro and Nuclear, right, they have to catch up. Like I mean, you know, taking your foot off the gas on what's working doesn't make any sense at all.


Chris Keefer  49:39  

Do you feel that they're threatening grid reliability? Is that is that a major concern or driving


Jigar Shah  49:43  

forces? There's actually no data whatsoever to support it. This is what I'm saying. Right? Let's the one people like, like, spread these sorts of rumors. You end up just in a bad place. Yeah, I


Chris Keefer  49:56  

guess you know, I can see that pragmatism of you You know, frankly, what is available to deploy right now, that is low carbon versus what's what's going to take time to develop and not taking your foot off the accelerator? That's, I think, a pretty sound argument. In general, though, I feel like the the examples of where wind and solar are being deployed at scale and most quickly, are starting to run into some serious roadblocks with skyrocketing prices with you know, taking the German example, for instance, with the threat of deindustrialization. I guess that's, that's a concern of mine, you know, looking forward and this kind of all of the above ism approach, particularly when it comes to when it's cool that solar is concerning for me for a failure of achieving actual deep decarbonisation, and ultimately requiring one to one backup. And generally so far that's been natural gas even in one of the world's wealthiest and most developed economies.


Jigar Shah  50:50  

Right, but why would you compare the United States of America to Germany? I mean, there has never been a more false comparison. Like, I mean, if you want to compare California to Germany shores or the United States, America is like Europe?


Chris Keefer  51:03  

Well, let's compare it let's large countries compare California to Germany, then? And


Jigar Shah  51:08  

no, but I'm just all I'm saying to you, is it that the United States of America has to build as much stuff as it can as quickly as it can, not because of environmental regulation, or anything else, although that's in there. But just because all of our coal plants are old. They're crazy old, right? I mean, our average coal plant right now is like 50 years old. And so they're just reaching the end of life. Right. So as a result, we've got to replace that capacity over the next 15 years with other stuff. And if we replace it with natural gas, right, and 23% of the natural gas fleet doesn't work it last Christmas, sending the PJM and, you know, Georgia Power and TVA into a tailspin where they almost had blackouts. Right, that's not good. The same thing is true in Texas, where you have an over reliance on gas. And so much of the gas plants are not weatherized that, you know, they have huge problems and heat domes and other places, right. And so I just think that in general, if you want reliability and resiliency, you should have a diversified grid. And that's what the US is pursuing. We're still less than 20%, wind and solar in the United States. So it's not like wind and solar is like conquering all and becoming 70% of the grid. And I think when you look at the modeling efforts that we've paid for, out of the National Renewable Energy Laboratory, or with Chris clack, who's now pattern energy, or Jesse Jenkins, and Princeton, I think everyone sees 4045 50%, clean, firm as a really preferable option. But you know, we got to get on with it, which is what the liftoff report said,


Chris Keefer  52:46  

getting off the nuclear topic for a second, we have an episode dropping any minute now on advanced geothermal, enhanced geothermal. What are your thoughts on that technology?


Jigar Shah  52:56  

It's extraordinary, right, but the first, but the first plants are going to come in it, whatever it is, like 15 cents a kilowatt hour, and then the next one will be at 14 and then 13, there's got a learning curve that they got to get through. And I do think that they can probably get to seven cents a kilowatt hour. So probably long term, which is really where we're saying, and of a kind nuclear, we'll get to as well. And frankly, hydro is got to be at seven cents a kilowatt hour to write when you look at hydro, you know, like, next generation, turbans and or fish friendly. And then all these things, we have 37 gigawatts of hydro that need to be relicensed over the next 20 years, right, they're gonna all have to upgrade themselves. And they're basically lecturing me about how the 1920s turbines that they still operate on are the best in the world. And they've never failed them yet. And I was like, I get it, man, I will celebrate that turbine as well in the museum that I put it into, but we got to switch to the next generation turbine that generates 15% More power is more fish friendly, and can actually respond to market signals in a far more dynamic fashion, which the current turbines can't do. And that's going to be more like seven cents a kilowatt hour, not two and a half cents a kilowatt


Chris Keefer  54:04  

hour. Okay, jigger, unfortunately, we're having a number of technical issues, which has created some some difficulties. So we're gonna have to cut it here. But listen, it's been a real pleasure. I appreciate the combativeness. Frankly, I think it's much more interesting for myself and my listeners. So thank you for making the time to come on decouple


Jigar Shah  54:24  

My pleasure, Chris. And I love the work you're doing. And hopefully everybody sees through our actions, that we're really trying to make sure that the nuclear industry here in North America scales up right fast and, you know, to be able to meet the needs of the world, right. And we want to not only do it here, but export these solutions around the world. And frankly, people want our solutions, right. They want us Canadian solutions, to really be able to, you know, get themselves off of coal, and I think we're all committed to getting that done. But I do think we've got to figure out how to You know, reduce some of the noise and some of the the volatility and some of the, you know, sort of inner fighting and really focus on how we get through all the steps. There's a lot of steps to get through to really create a confident posture here that we can build off of.


Chris Keefer  55:18  

Well, I certainly do appreciate the bullishness of the Department of Energy. I know that the Canadian federal government has been listening, typically in the aftermath of the the IRA. And that's definitely played a role in at least federally Canada's pivot back towards nuclear energy. So


Jigar Shah  55:34  

well, I look forward to next time we talk you actually being bullish.


Chris Keefer  55:39  

I'm a defensive pessimist. I believe that's my formal diagnosis. Are we getting well I appreciate you getting there. Big things coming in Canada. We hope to put you all the shame in the States with our 6000 megawatts of new nuclear little friendly competition. Never heard anyone so get on it. chigger


Jigar Shah  55:54  

Oh, man, deploy the competition. We're all we're all winners.


Unknown Speaker  55:58  

Alright. Thanks again. Thanks.



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