Vogtle part 4: Can Positive Learning Happen Next?

00:00:02:08 - 00:00:11:15

Chris Keefer

Welcome back to Decouple. I am joined by James Krellenstein for what we have promised to be vocal. Part four. We have an hour and a.

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James Krellenstein

Half.

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Chris Keefer

The finale. I'm hoping we can pull it off. again, I wouldn't cry. I think a lot of relationships would not cry if a fifth was required. But no, I don't think it's necessary. You don't think it's necessary?

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James Krellenstein

not.

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Chris Keefer

But all that to say, you know, it's been very well received. I was at the Canadian Association conference, and I had a lot of people coming up to me. very grateful. James, for your insights. a lot of the Westinghouse folks have been, listening to it and and studying it carefully. At least those manning the, the booth.

00:00:41:16 - 00:00:57:22

Chris Keefer

so, yeah, it's, for that kind of, you know, we have a much broader audience, the taps in on the more sort of general energy content. it does narrow down on Vocal Part three, and it will probably narrow down further and vocal part four, but for those diehard listeners, I feel a special obligation to, to make this content.

00:00:58:00 - 00:01:02:22

James Krellenstein

For the niche, the niche Westinghouse fans. Yes, yes.

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Chris Keefer

Project managers. Okay. Anyway, so, James.

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James Krellenstein

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Chris Keefer

I have a few things obviously I want to talk about. I understand, you've been collecting some data on some of the Chinese cap builds and seeing some positive things there in terms of.

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James Krellenstein

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Chris Keefer

Things moving quicker, schedules advancing more rapidly. I was just looking at a couple of articles. and to be honest, that they didn't seem to be terribly high quality, but looking at, positive and the phenomenon of negative learning with a nuclear and I guess one of the big questions coming out of, the difficulties at Vogel is, will the next Ap1000 be cheaper?

00:01:41:22 - 00:01:59:06

Chris Keefer

what are sort of a it seems like it can't help but be but in terms of that broad perspective, we do see that worrying. worrying sign that certainly compared to wind and solar, for instance, with an incredibly positive learning rate. we see a lot of stagnation in terms of, of costs from the early days.

00:01:59:08 - 00:02:17:06

Chris Keefer

fairly significant positive learning, maybe confounded by just going up in, in unit size, moving from tens of megawatts to hunters of megawatts. But, it seems like the rule tends to be either negative or a negative learning or else. You know, I think the Koreans are the only real outlier there in terms of bringing costs down somewhat.

00:02:17:08 - 00:02:26:03

Chris Keefer

anyway, so that's that's kind of what I want to touch on. But I'm sure you've thought this out a lot more in terms of, where you want to go to to wrap up the story.

00:02:26:05 - 00:02:47:19

James Krellenstein

Right. Yeah. So I think, you know, there's a question of will the next 81,000 be cheaper? And I think my perspective is it almost would be very, very hard. Let me get it would be very hard for it not to be cheaper. Sure. and that's because, you know, the three primary problems that we saw at Vogel.

00:02:47:19 - 00:03:21:20

James Krellenstein

And once again, we're taking a decade long mega projects. That's 30 literally 30 billion bucks. And we're distilling it down to, you know, you know, three lessons that could be said in 45 seconds. So, you know, take it with a very large grain of salt, but but, you know, an incomplete design and and once again, you know, I, as I was mentioning in the pre call, right, like, the pre-recording the green or the virtual green room, is that the, you know, the cost, I think, I was talking to an MIT student actually up, and we were actually just running up at MIT last week.

00:03:21:22 - 00:03:52:05

James Krellenstein

who actually is big fan of decouple. and we were, we're just running through license amendment requests, you know, those 188, 189 license amendment requests on Vogel and on Summer and, you know, one of the the incomplete design was just driving so many delays, so many needs to go back to the NRC on the standardized design that it really started to, it was a massive, massive driver of project cost and project schedule overrun.

00:03:52:05 - 00:04:16:15

James Krellenstein

And when you're talking about a nuclear power plant where literally because of interest and financing costs, we're talking about a single day of delays, $1 million in excess costs, roughly speaking, that's a huge, huge factor. And we just can't not have a incomplete design now. So that's the first thing. We have a design that is complete, that is operating and that is licensed by the US Nuclear Regulatory Commission.

00:04:16:17 - 00:04:44:10

James Krellenstein

Now, the caveat to that lesson is what's going on over in our European flat. Right. And they are building the European pressurized water reactor, which they built in Finland at Ol three. They built in France at from Anvil Trois. And then they also built in China two units. And now they're building of course in the United Kingdom. And you know the UK project is not going Hinkley point C is not exactly going well.

00:04:44:12 - 00:05:15:10

James Krellenstein

And the I think the important lesson to learn there really is that, if you change the design, you kind of don't get the advantage of a complete design. And the thing that I've heard from the EDF folks, essentially is they are changing the design a lot, as they're going from each EPR to each EPR, and we have even further design evolution now, with Macron and EDF announcing the EPR to write an evolution of that EPR design.

00:05:15:16 - 00:05:39:03

James Krellenstein

So once again we have a complete design at logo. Obviously that's operating that's producing that both units I mean four is still in commissioning. We saw it go up to 100% power just last week. We have local three in commercial operation operating really really well. So the the critical question that we need to ask is, are we going to make sure that we keep that design stable?

00:05:39:05 - 00:06:01:01

James Krellenstein

And if we do, then we really have an opportunity to take the advantage of it. The second thing, of course, was the supply chain, right? That we really the supply chain broke down. And Vogel three and Vogel four mid build. Right. The question is is is that supply chain robust enough right now that it won't break down. Obviously again during the build.

00:06:01:03 - 00:06:35:04

James Krellenstein

But even as a second corollary can we get can we glom up enough orders for Ap1000 outside of China. So that the suppliers of those modules in that supply chain are properly incentivized to invest the labor and capital into making sure that that supply chain can deliver these modules on time and on budget. And then the third thing was just the general rustiness that we had in the United States is, sort of labor force and skilled labor and manual labor in building a nuclear power plant.

00:06:35:05 - 00:07:01:12

James Krellenstein

We haven't obviously, you know, last nuclear power plant before Vogel three and Summer two that started was Sharon Harris, unit number one, I believe, in North Carolina. I think I wouldn't have confused just North Carolina in South Carolina. And Sharon Harris started in 1978. started nuclear construction in 1978. So I think that a really big question that we need to ask here is we had this massive pause.

00:07:01:14 - 00:07:25:23

James Krellenstein

We have another pause now because there's no AP 1000 orders yet that have been announced. We if we want to keep that labor force actually keeping going, keeping people in those trades that are nuclear qualified and competent, we really do need to see in order relatively soon. So this is sort of the where we are right now. We have both the pros right where we have a complete design.

00:07:26:01 - 00:07:52:14

James Krellenstein

at least the shop drawings for those modules are done. we have the potential to get a really good supply chain running. and we have a labor force that, at least to some extent, has been through this, although they are now probably diffusing as we speak around the country and around the world. The critical question is, in the next couple of years, can we get enough orders together of 81,000 to make sure that we keep on running down, that that cost curve and capitalize on these lessons?

00:07:52:16 - 00:08:15:12

James Krellenstein

And I think that in some ways is what I am focusing on, what I believe is the next move and sort of what I'm going to be focusing my career on is how do we make sure that we have 81 thousands and we're doing this in a way, orders in the United States, and we're doing this in a way that, we can retain all those analogies and start going down those learning curves.

00:08:15:14 - 00:08:34:19

Chris Keefer

So I definitely want to touch on what I call design instability. and maybe, we can talk about that more broadly. I'm not sure the degree to which the Chinese have modified the design. I think they have the licensing right to do so. but they're the ones building future iterations, I guess. I'm not sure. Again, how how how derivative they are, how different they are.

00:08:34:21 - 00:08:52:18

Chris Keefer

but before we get there, just in terms of supply chain, so you've described to us in enough detail anyway, the modules, submodules, how they're, how they're put together. I'm just curious in terms of what the facilities look like that are, that are building these modules. We know that the modules are assembled or were assembled and vocal on site in a specialized facility.

00:08:52:19 - 00:09:12:04

Chris Keefer

but the factories that were tooled up to design these modules, are they kind of specific to doing only that task or I imagine they they still the physical structure still exists and they're just on to building other stuff. I imagine they haven't built any modules in the last couple of years. So could those factories come back into operation doing what they did just 2 or 3 years ago?

00:09:12:04 - 00:09:24:03

Chris Keefer

Or, you know, in terms of the kind of permanence or stability of that supply chain itself, how much longer can we go, in terms of years out until those those facilities are no longer able to be brought back into operation?

00:09:24:05 - 00:09:43:02

James Krellenstein

So I think, you know, the original concept, back in the noughties, you know, in the 2000, as to use your term, was to have actually a real means centralized supplier, which was this Sha Sha Lake Charles facility in Louisiana that was going to be the main supplier of the submodules.

00:09:43:03 - 00:09:45:16

Chris Keefer

For, like 15 different AP one thousands at that time. Right. Or.

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James Krellenstein

Yeah, I know, I mean, we you know, we licensed a bunch of a few one thousands all across the country. Right. And it really did seem, you know, before, I think the fracking revolution had and Fukushima and, you know, vocal itself. Right. It really did seem like there was going to be an, a nuclear renaissance. in the United States.

00:10:05:04 - 00:10:43:20

James Krellenstein

And so we had a centralized facility that was going to be the major, not 100%, but the major supplier of those Ap1000 structural, structural and piping and electrical modules. And obviously, as you know, as we've talked about ad nauseum, that broke down mid construction, in vocal in summers case. And we saw, you know, you could see this in sort of publicly available documentation or private documentation that, you know, basically people went out into the, world and tried to find other submodule suppliers.

00:10:43:20 - 00:11:11:11

James Krellenstein

So it went all over the place, right where you had people in everywhere from Florida to Oregon to Newport News, shipyard. Right. which obviously makes our aircraft carriers as well as some of our nuclear submarines. we people went out to South Korea and Japan, Toshiba and Ahip, fabricating all this, some of this stuff always some of it was going to some of the major components for fabricated in Italy.

00:11:11:13 - 00:11:35:09

James Krellenstein

so we really did see, what was originally a global but somewhat centralized supply chain. We started to go out to various ask me and stamp qualified, suppliers all over the world, kind of in a last ditch effort to save the plant. And the critical question that I think Westinghouse needs to answer now much more is what is the state of the supply chain?

00:11:35:11 - 00:11:42:03

James Krellenstein

And is it really tooled up to be able to not have that experience happening?

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Chris Keefer

Right.

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James Krellenstein

It's and yeah, I.

00:11:45:03 - 00:12:02:10

Chris Keefer

Remember seeing a photo, I'm not sure if it was called shoes or Charlotte or, it's a French name. It was one of the big, factories where they were, I think building something like eight, reactor pressure vessels every year. the way things were tooled up for the Messmer plan, for instance. quite different, quite different.

00:12:02:10 - 00:12:05:06

Chris Keefer

Very centralized. and able to rapidly deploy.

00:12:05:08 - 00:12:09:23

James Krellenstein

And that facility, in I think it's Crusoe.

00:12:09:23 - 00:12:10:23

Chris Keefer

Crusoe. That's it.

00:12:11:00 - 00:12:57:00

James Krellenstein

Yeah, yeah, yeah. Outside of Dijon. it's still there, actually. And it's still, if you look at where, like, the, EPR steam generators come from, it is there and I believe major components of the reactor pressure vessel for the EPR are still assembled there. But as you're saying, like any mass produce, good. The, the the sort of brilliance of the Messmer plan was, is the French centralized everything, you know, as a national, as a grand national project and they had, you know, dozens literally of the first reactor design that supply series, those 900 megawatt electrical, three loop designs that were based on the Westinghouse plants at Beaver Valley in North Hanna, in

00:12:57:00 - 00:13:17:23

James Krellenstein

the United States. They just sort of minted those out with very, very little design variation, especially on the nuclear island. between those plants, nothing like what the United States did. Now what on the flip side, what we should be really clear about is the AP 1000 is highly standardized. And it does seem, even in the Chinese to us builds.

00:13:17:23 - 00:13:45:16

James Krellenstein

There is some difference in the shield building configuration in particular that, that is in the Chinese Ap1000, versus the U.S, because they don't have the aircraft impact assessment rule, but most of the designs and tooling are really, really quite similar. And so much so that in the Chinese Ap1000, of course, Chinese is, China's on a 50Hz grid in the United States on 60Hz grid.

00:13:45:18 - 00:14:07:19

James Krellenstein

Right. If you look at just of the way the reactor coolant pumps run in the Chinese Ap1000, right, they actually run off 100% of the time off the variable frequency drives. Right, which are used to adjust the speed of the reactor coolant pumps. Because the pumps are designed at 60Hz, the Chinese input grid mains power is at 50Hz.

00:14:07:21 - 00:14:27:19

James Krellenstein

So they need to basically up the frequency up through the VFD, where in the United States they just bypass and go directly at full power to the, to the, you know, mains power. Now, one of the things that I think we should say that is really, really impressive and it gives you the Bulls case, about how this is what the Chinese did.

00:14:27:21 - 00:14:55:17

James Krellenstein

It is really, I think a lot of people in the US nuclear industry and around the world are really shocked that the Chinese are building half a dozen right now, Chinese Ap1000, and that's because the Chinese, allegedly, ostensibly have a fully indigenous reactor design, the long one, which is actually based on that three loop French design, but with a lot of Chinese indigenous innovation, including a steam generator design, new passive safety features as well.

00:14:55:19 - 00:15:20:10

James Krellenstein

And just as a matter of national pride, people really thought the long one was going to dominate the Chinese build. But the operating performance of the Ap1000 plants at Sun and Hiang are so superior, are so great that the Chinese really do seem to be convinced, and the operating experience seems to be so good with the AQ and thousands that they're going ahead with building these Chinese Ap1000.

00:15:20:12 - 00:15:49:12

James Krellenstein

and I have to say, as we were talking about before, we're running a project right now tracking this sort of, the progress of the Chinese Ap1000 and just looking at the what we call the big six modules that can 2001205 being placed in the nuclear island, and we're going about 75% faster than we were in some cases, in order of magnitude faster than we were on the first Chinese builds.

00:15:49:12 - 00:16:10:15

James Krellenstein

Which really gives you the idea that if you actually have a highly modularized design, like the Ap1000 and you have a supply chain that actually is working, you have a complete design. You don't have to change anything mid mid design. These things really can go probably faster than anything else that we have right now, in our arsenal.

00:16:10:17 - 00:16:23:07

James Krellenstein

So that is a really compelling case for the United States getting on and other participants around the world, right, for getting on and building more. If you want thousands.

00:16:23:09 - 00:16:37:13

Chris Keefer

And so when you talk about everything speeding up, that's the submodule fabrication. That's, you know, the modular assembly facilities, that's the crane lifts. Like, is there a certain part of that or it's just the designs done, the supply chains there, the Asean stamp labor is there and it's all flowing as a result of that.

00:16:37:13 - 00:17:12:13

James Krellenstein

So what we what we look at is the time from start of nuclear construction to the time that we called the, the the modules are placed into the, you know, into their place in the either nuclear island or in the auxiliary building on the base mat or wherever they're going to go in. and, you know, a huge problem that we had at Vogel and Summer and at Simon and Hyung's because the designs for the modules weren't done right and the module supply chain was broken, it would just take a long time to even for the modules and all the submodule pieces to be on site to be assembled.

00:17:12:15 - 00:17:39:13

James Krellenstein

and therefore, you know, the submodules are in there. You can't place the module into the plant. Right? and even the Chinese, right, had this issue. Once again. You know, I think one of the lessons that you take out of this sort of, you know, saga of these couple series, is that, you know, the Chinese builds of the Ap1000 were not noticeably faster than the American builds were.

00:17:39:15 - 00:17:59:01

James Krellenstein

And I think that's pretty shocking because China generally builds large like water reactors in the medium around five and a half years, depending on how you calculate it. And it took them about nine years, five months, to build Saarinen unit number one. And, you know, took ten years of nuclear construction and some change in vocal. Right.

00:17:59:01 - 00:18:21:12

James Krellenstein

So, you know, what we were saying is, okay, if our hypothesis was correct at all, this was, you know, the supply chain breaking down, the design being incomplete and so on. Then with all that sort of fix, we should really see the, Chinese builds going dramatically faster of the next generation. And that's what we're exactly seeing right now.

00:18:21:14 - 00:18:27:22

James Krellenstein

We are seeing it going so much faster than they were even in China on the first generation. So it is all of those things.

00:18:28:02 - 00:18:35:02

Chris Keefer

Do you have a sense that they're going to get down to that five and a half year median build time, or even better at one of the next Chinese AP one thousands coming online?

00:18:35:04 - 00:19:13:17

James Krellenstein

I would be putting on a bet that and you know, famous famous mistake but that the Chinese AP one thousands maybe the fastest builds in China and maybe it even brings it it it beats the can do builds in the 90s. because I really do believe that the modular, sort of configuration that, Westinghouse did here really, can allow for dramatic, dramatic speed up in building, assuming, you know, all of the stuff that we talked about before, is there and that is there in China, it's not there in the United States.

00:19:13:17 - 00:19:31:21

James Krellenstein

And one of the key problems that we have in the US right now, or even the Western world, if you want to build Ap1000, is that we can't tap in for geopolitical reasons. The Chinese module supply chain. Right. So we are going to have to build our own supply chain right now. And you know.

00:19:31:23 - 00:19:39:17

Chris Keefer

In terms of those Chinese Ap1000, has the design stayed locked in or are they making modifications that you're aware?

00:19:39:19 - 00:19:49:02

James Krellenstein

so we're not aware, you know, what's going there's not that much transparency in it, but the general sort of unfortunately, that's a very different world than it was in. yeah.

00:19:49:04 - 00:19:50:06

Chris Keefer

Binet's.

00:19:50:08 - 00:20:18:13

James Krellenstein

yeah. Yeah. But our understanding is, is that it's going, that there's not that much design evolution that occurred, in, in the Chinese Ap1000, some sort of base, I think, where they spent a couple of years on is solidifying the design and getting that supply chain spun up. And, you know, I think one of the things that we should be clear about here, that I don't think a lot of people appreciate is, you know, as we've talked about, the AP 1000 really is a large modular reactor.

00:20:18:15 - 00:20:38:20

James Krellenstein

And we often think that the, you know, the whole way that SMEs have been pitched to a lot of us is that these things will allow more of the percentage of labor to be done in a factory versus a large modular reactor. And in fact, what sort of peer reviewed analyzes say it's actually kind of the opposite, right.

00:20:38:20 - 00:21:05:18

James Krellenstein

Generally, because one of the issues that we've talked about with assemblers before is that these small, you know, these SMEs have so much civil works. And although you can often shrink down the nuclear island modules, and the nuclear island itself, bringing that all into factory, the, the, scaling the amount that the civil works shrink is much slower, is much lower than the amount of capacity that change.

00:21:05:18 - 00:21:24:23

James Krellenstein

So what happens is you start dominating more and more of your cost structure goes into civil works such that if you take a new scale plant, right, the new scale power modules in a new scale plant cost less than 10% of the overnight cost of a new scale power plant, which means that a lot of the other labor has shifted.

00:21:24:23 - 00:21:43:15

James Krellenstein

A lot of the other cost, excuse me, is shifted to civil works and other things that are used to improve the plant. I used to build the plant. As a result. What you see is when you look at analyzes and once again, we're relying on Robbie Stuart's work, actions lab. for the nuclear cost estimation tooling.

00:21:43:19 - 00:22:07:06

James Krellenstein

What you really do see here is that in a 300 or an AP 300 or new scale plant, more of the percentage of the overall overall cost of the plant is on onsite work than on off site. then it compared to an AP 1000, which is sort of counter-intuitive to what I think a lot of what we've been sold on with estimates.

00:22:07:06 - 00:22:36:10

James Krellenstein

Now, the way I like to think about this is, is that the micro reactors are probably going to be still have, the highest percentage if they ever get built in approved, they're going to have the highest percentage of of work done in a factory. Then you sort of go into a valley, right? As you get done for AP 300, as 300, and you come back up, to the AP 1000, in terms of percentage of work that's done in a factory versus done at the site.

00:22:36:12 - 00:22:49:11

James Krellenstein

And so that that is I think another reason why we're really trying to think a lot long and hard about consolidating on a single design and trying to to focus on building, deploying half a dozen or a dozen reactors.

00:22:49:17 - 00:23:12:06

Chris Keefer

Right, right. And I think your, airplane and airports analogy was, quite fitting there. So with, with the summer as you are making and servicing smaller aircraft. But, the size of the airport is not, not, certainly it doesn't disappear. The airport is still there. and it's not, decreasing, as significantly. So it actually becomes more of the actual cost.

00:23:12:08 - 00:23:18:15

Chris Keefer

you certainly hear that a lot in circles, you know, like we're going to get rid of the airport. We're just focusing on, you know, trying to move to a model of fabric.

00:23:18:17 - 00:23:19:19

James Krellenstein

I think the question.

00:23:19:23 - 00:23:23:11

Chris Keefer

Like Boeing does, but like Airbus, that's I guess,

00:23:23:13 - 00:23:50:00

James Krellenstein

Yeah. You know, I think, you know, our model, obviously for the next 81,000, we're modeling on the 737 Max is sort of, you know. No, but but, so going back a little bit, so to sort of, I think where what we're, what we're talking about here is, you know, with Vogel four and Vogel three is that, you know, anecdotally, we're seeing 30 or 40% cost reductions, roughly between Vogel three and four.

00:23:50:02 - 00:24:09:19

James Krellenstein

And a lot of people are pretty shocked by that. That's actually, you know, you know, there's a very famous paper, paper by Jessica Lovering and Ted Nordhaus that really is arguing this that really except for South Korea, it really hasn't been a big learning curve that you were referencing in the United States or even around the world in nuclear deployment.

00:24:09:21 - 00:24:31:18

James Krellenstein

And I think that that sort of it's kind of missing the forest for the trees in some ways. if you actually look at the history of US nuclear power deployments, we saw actually dozens of learning curves that occurred. Right? If you could almost every multi-unit plant. Right. there was massive cost reductions between the first plant and the second unit.

00:24:31:18 - 00:25:00:22

James Krellenstein

The first unit in the second unit, Palo Verde unit number one to Palo Verde, unit number two almost decreased almost by 50% in terms of overnight cost. Now there's two I think major issues that we have here in the United States, one is that the US never focused on a standardized design, and we were just beginning to have the standardized designs coming out when sort of, you know, end of nuclear happened in the United States.

00:25:00:22 - 00:25:28:13

James Krellenstein

So, you know, the first real standardized design approval that was ever done, the first license design that was deployed was Combustion Engineering System 80. That was built first at Palo Verde. So three units there and then also it was being built at Washington Nuclear Project three and five. Those were plants and was 84% done in three three. So we had that ability probably hypothetically, to go down that cost curve.

00:25:28:15 - 00:25:52:09

James Krellenstein

we just were kind of too late. almost by the time we started standardizing. But what you saw in, like, Lysol unit number one versus Lysol, unit number two, Brown's Ferry, unit one, Brown's ferry two. Throughout the history of the United States nuclear industry, we really have seen that we see pretty profound drops in the price from the first unit to the second unit.

00:25:52:09 - 00:26:12:02

James Krellenstein

And then the third unit if that happens. So as soon as it levels off the second units. So that's in some ways what we're kind of missing when we're talking about the lack of a learning curve. There's structural issues in the United States that preclude, us from being able to systematically deploy that over and over and over again.

00:26:12:04 - 00:26:54:23

James Krellenstein

and the utility model, the sort of fragmented utility model, in particular the United States utilized for building generation in the regulated utility era, in particular, was causal here, as well as the fact that the designs were very non standardized. And once again we've talked about this. But this is really important. As you go back to the topic of this episode, which is Vogel for Vogel three, to understand that in the United States, previous to Vogel in the AP 1008 plants, it wasn't just that you had GE and Westinghouse and Combustion and Babcock's building different nuclear islands, maybe even different models within that product line, but that the architects and engineers who were designing not

00:26:54:23 - 00:27:20:16

James Krellenstein

only the balance of plant, but also a lot of the critical architecture of the safety systems, that support the nuclear island or even ancillary systems like, you know, like chemical volume and charging systems. Those architectures often would very even within the same combustion engineering, you know, nuclear reactor model, very, very significantly. And so you got this real heterogeneity.

00:27:20:19 - 00:27:46:02

James Krellenstein

And in the reactor design. So that also precluded us from going down the learning curve. And the AP 1000 is really a different case where we have a totally standard Ise nuclear island balance of plant, and architecture that hypothetically can be copied and pasted, for lack of a better term, into different sites, assuming that, you know, it can conform with, let's say, seismic criteria at the site.

00:27:46:04 - 00:28:01:13

James Krellenstein

obviously there's going to be still obviously circulating water design and other aspects. But, you know, one of the things that we have focused a lot on is looking at the of the licensed Ap1000 that were licensed in the United States. There's a lot of them. You know, how much design variation did we see above the base mat of the plant.

00:28:01:15 - 00:28:19:21

James Krellenstein

And what you really find is there's very little that has happened. And they got that through the NRC, which is a tremendous sort of argument here that we have to be able to go down this cost curve possible before, if we are thinking about this smart. and that's what I think the subject of today's episode should really be on.

00:28:19:23 - 00:28:42:04

Chris Keefer

Just before we get deeper into that, what you're saying is, the second reactor is the reactor built on the same site, experienced a significant cost reductions. The U.S. didn't get to a place in the 70s where it had a fully standardized design and was still deploying to see if that would work between sites in France. We kind of have that where the standardized 900 megawatt reactor, and several other, and those are built between sites.

00:28:42:04 - 00:28:54:04

Chris Keefer

Do we see that, between sites or like, I guess what I'm trying to say is, to see further cost reductions, would that be greater at, say, vocal five or at a new Ap1000 site, within the US?

00:28:54:06 - 00:29:20:18

James Krellenstein

So I think you bring up the excellent point. Right. And I think, your colleague Chris Adam has frequently correctly pointed out that unlike our, you know, maple sirup soaked brethren in Canada, you know, the, the, the, you know, you guys deploy these big four unit, eight unit plants, right? Which make a huge amount of sense from an industrial project planning and perspective because, yeah, you can standardize design.

00:29:20:18 - 00:29:42:12

James Krellenstein

Sure. But it's great if you can have the same workforce at the same site, you can build this housing and whatnot. and also they can slide along literally as they're finishing up with, you know, the base mat, you know, they can go to the basement on unit two and then unit three and then unit four. And then if you're a Bruce power unit eight, right all the way up, you're just going sliding, sliding, sliding down.

00:29:42:14 - 00:30:01:19

James Krellenstein

And that really allows you to retain so much of the lessons learned that the exact same labor, like it's literally the exact same people, in many case, doing it, you know, people can plan much more stably to build, you know, it's going to be a decade or two decades long a build. They can say, okay, you know, I'm gonna actually really move my family here.

00:30:01:19 - 00:30:22:20

James Krellenstein

I'm going to get some permanent housing and really plant stay there. and all of those sort of fixed sunk costs that you have of, you know, locating stuff, you know, getting logistics into barge or ship in the various components. That's all fixed, sunk in on the first unit. You get to spread the cost over any units at the same site.

00:30:22:22 - 00:30:43:15

James Krellenstein

So I think that's a really, really important point. So you're right, a lot of what we could be seeing in, you know, the unit one two, unit two cost drops, are those the question that we have to have. And we didn't really see it very much on the the French KPIs series, although obviously there are four unit and six unit plans in France as well using that reactor technology.

00:30:43:17 - 00:31:19:04

James Krellenstein

The question that I think is the one that needs to be asked and what needs to be proven is, you know, the CPI sort of product line, that three Loup product line from, from atom, that really was a stick built, planet was not particularly modularized. The question that we have to have is if we modularize the plant, fully standardize it, will that help with even as we're doing multi-unit multi-site deployment, right, to allow us to to be able to spread those learning across, various other sites.

00:31:19:06 - 00:31:35:06

Chris Keefer

And to and to be, clear, there's there's sort of a risk benefit of, of a hyper modular design. If, the modules don't arrive properly, that can actually, probably be worse than a stick built design. But again, if you do get that really teed up as the Chinese seem to be doing it, it presents a tantalizing advantage.

00:31:35:08 - 00:31:57:08

James Krellenstein

So I think like any mass produced product that is made on an assembly line, the question that we have to have is, if you were building, you know, the Ford Model T, to use a cliche example, and Henry Ford said, I'm going to build an entire factory product line, and I'm going to get and people are going to buy two Model TS afterwards.

00:31:57:10 - 00:32:16:06

James Krellenstein

that would be a horrible, you know, Ford Motor Company would not be Ford Motor Company today, right? I mean, if you just go to Model T's, it doesn't make very much sense. You might as well hand build two Model T's, right. the whole the whole way that we get here is the economies of scale, right. And the economies of scale.

00:32:16:06 - 00:32:38:22

James Krellenstein

As we've talked about before, not just in that cost capacity scaling, but in the sort of rights law, number of units. And what we're trying to hope for is that, you know, our opinion. The AP 1000 represents the best of both worlds, right? Where you both have the economies of cost, capacity scaling, and you have the ability hopefully to deploy a dozen or so reactors and really take advantage of that.

00:32:39:04 - 00:32:40:23

James Krellenstein

But that's to be proven.

00:32:41:01 - 00:32:57:11

Chris Keefer

I guess, following up on this, site specific, positive learning curve, versus potentially the lack or negative learning curve, going over to different reactor type, the EPR experience in Europe, as far as I know, there's not been two EPR is built on the same site yet it's not correct.

00:32:57:12 - 00:32:59:12

James Krellenstein

Well, is it Hinkley Point C one and two?

00:32:59:16 - 00:33:03:19

Chris Keefer

It's you know, and I, I thought so but yeah.

00:33:03:19 - 00:33:24:06

James Krellenstein

So I mean I think Hinkley Point C is two units but it's not done yet. And you know we'll probably be done. And you know by the time I have grandkids, but so yeah, it is two units. It's talking. But but but to your other point and, and Taishan unit that the two EPR that we built in China or twin unit facility as well.

00:33:24:07 - 00:33:43:22

James Krellenstein

Right. So in Europe we haven't yet built a twin unit EPR, you know, depending if you consider United Kingdom in Europe or not, you know, either we are building or we are not building one, and certainly not in the European Union. But, yeah, we built ol three obviously as a single unit, plant, as was Flamm ville, three.

00:33:44:00 - 00:34:05:01

James Krellenstein

And so we didn't take advantage of that. That being said, you know, the sort of go back to our previous, episode from the, what's going on with the AI revolution? The return of load growth, I think, really allows us to be planning for a multi gigawatt scale, in a single unit site, which I think is really, really good.

00:34:05:03 - 00:34:29:22

James Krellenstein

and you're right, the question that I would have for Vogel five, for example, would be given that there's going to be such a long pause between when construction is completed, not only when construct, but various phases of construction. You know, the basemap was poured on Vogel, you know, more than a decade ago now. So those concrete workers, for example, those rebar workers, they're probably not there anymore.

00:34:30:00 - 00:34:49:04

James Krellenstein

There may be working on some other projects in Georgia. You know, you probably have Foreman and other people at, at the construction site that are involved. but that is not as easy of a transition as it would have been had we been building three units at once in 2012, 2013. Now, in some ways it was kind of nice that we didn't.

00:34:49:04 - 00:35:12:21

James Krellenstein

We're building three units just because how probably that third unit would have been canceled. you know, one of the things, I mean, we're getting off a little bit from Vogel for, I mean, one of the things that I think is so amazing about the Vogel experience was, is that we finished it. So many of the other nuclear power plants that were dual unit, plants originally, when planned, they canceled those second units.

00:35:12:23 - 00:35:32:12

James Krellenstein

and you can still see like if you look at a power plant like Perry Nuclear Power Plant, right? There's a whole second. I mean, it looks like there's a twin unit plant. And just that second unit parrot Perry is in a BWR six plant in Ohio. It's just the whole second unit is empty. If you look at Seabrook, you can see the beginnings of the containment building.

00:35:32:12 - 00:36:08:09

James Krellenstein

There's a whole second turbine building there, right, that, you know, that was there was just abandoned. And we could go on and on in the list. Right. Even a a plant like Grand Gulf, right, had two units originally planned for it. And we just we just only finished a single unit. And, and I think what we're asking today and I guess we're off from Vogel for but it really presents the question, what is the future of nuclear power in the United States now that Vogel four is in commissioning and we don't have any units ordered right now in the US that are serious, committed orders.

00:36:08:09 - 00:36:41:16

James Krellenstein

Right. We saw the new scale plant, canceled. Right. We have some collaboration with Tennessee Valley Authority on the Ax 300. But, you know, there's rumors about Vogel five, as you mentioned, previously, but we don't have anything solid in the box right now. And if you talk to a lot of people who are very worried about climate change, feel like Tyler Norris and other folks, what we are starting to see is the utilities are really, really worried about meeting load because of the AI revolution, because of EVs, heat pumps.

00:36:41:16 - 00:37:01:19

James Krellenstein

We could go down the list. and how are we going to make a compelling case? And maybe that should be the focus of this episode at the end of Vogel about how we're going to make sure that there's a new nuclear power plant ordered in the United States. now, and maybe ideally half a dozen nuclear plants, in, in the US.

00:37:01:19 - 00:37:08:04

James Krellenstein

And the critical question I would like to ask and discuss is, should that be one design or should that be six designs?

00:37:08:06 - 00:37:10:05

Chris Keefer

I have a feeling you have a strong opinion on that matter.

00:37:10:08 - 00:37:13:22

James Krellenstein

I do, but, other people have strong opinions on the other side.

00:37:14:00 - 00:37:37:03

Chris Keefer

Absolutely. Well, let's let's try and assess. the, the merits of either side there. you know, just as, it's almost, you know, gossip, but, you know, jigsaw on. I'm not sure if it was, Doctor Volts or another podcast. It was on. did mention that there are three utilities in the US that had previously been eyeing us, summers that are looking at Ap1000 as being lower risk.

00:37:37:05 - 00:37:59:15

James Krellenstein

That's that's PL the LPO has gotten religion now and has recognized, you know, so bars are not, you know, it you know, a lot a lot of people in the community have been speaking. I think, you know, I think I think it's been a transition for LPO a little bit to understand the upside, the advantages and disadvantages of SMEs.

00:37:59:16 - 00:38:21:00

James Krellenstein

And once again, the question I think all of us need to be asking here is in the case, you know, when LPO is putting out a project, a report saying we need 200GW to 500GW of new firm capacity in the United States to meet the Biden administration's decarbonization goals. And, you know, the Biden administration is itching to get a nuclear project started in the US.

00:38:21:00 - 00:38:45:09

James Krellenstein

We obviously saw them say Palisades. They're looking at other plants that just recently shut down to really help support. The question that we have to say is, you know, what is the policy that we really do need from the, federal government to help us ensure that we can build a fleet, build out of new nuclear reactors in the United States?

00:38:45:09 - 00:39:06:05

James Krellenstein

And I think there's a lot of folks in the audience, probably in our, in the nuclear community, who really believe that should be smart or advanced reactor technologies. and I think that is and we should note, you know, previously I say there's not really another nuclear plant that's really in seriously in development, but there is actually one, right?

00:39:06:07 - 00:39:35:08

James Krellenstein

As Terrapower is project, which is a liquid sodium fast breeder reactor, in Wyoming that just filed a construction permit, docketed a construction permit with the NRC and is beginning the part 50 process, for that plan. So there's one I think there's a lot of people even within Terrapower. well, not within Terrapower, but around Terrapower that I think are wondering how the economics of that plant design is going to, to shake out.

00:39:35:10 - 00:39:43:04

James Krellenstein

And, you know, we've never even know one who's ever built liquid sodium reactors has been able to get them to be competitive with like, water reactors.

00:39:43:10 - 00:39:45:01

Chris Keefer

And even the rescue soon.

00:39:45:03 - 00:40:16:20

James Krellenstein

Even the Russians, the Russians, the Russians say maybe at 1200 megawatts, they'll break even. they built 350 600MW, 800MW electrical. but they paused development of their 1200 megawatt plant at the last and are redesigning it. so the critical question that we need to ask is maybe I'll be completely wrong. And Kemmerer will come in under budget, ahead of schedule, get the fuel and we'll we'll knock the success of everyone.

00:40:16:22 - 00:40:23:04

James Krellenstein

I'm not particularly betting that that plant design is going to be able to be more competitive than a light water reactor.

00:40:23:06 - 00:40:38:18

Chris Keefer

I mean, this does bring into question, and we are going to sort of just bring our focus back to what you suggested there. and stay relevant to Vogel. But this question of design stability, what do you think drives that? Is it is it sort of an anti-nuclear narrative that it's just nuclear is not good enough? It's not safe enough.

00:40:38:19 - 00:41:00:13

Chris Keefer

Like, how could we be building an Ap1000 that, you know, was licensed? I forget what year, 2006? That's that's old technology. We should be doing something new. Like, it seems like there's this, whether it's ADHD or just, perception that nuclear, is never good enough and that we couldn't focus on a standardized design because, hey, maybe there's, some safety margins by pursuing, you know, novel moderator coolants, etc..

00:41:00:15 - 00:41:24:01

Chris Keefer

what's what's the argument for standardization saying this is good enough? where do we need to stop? Should we be stopping innovations? A really hot term, but it just seems like the pace of nuclear innovation, especially blue sky innovation, is just very slow because these are large, complex, highly regulated projects. you don't see those kinds of disruptions that we've talked about before in other industries.

00:41:24:03 - 00:41:38:17

James Krellenstein

One aspect of this has been historically regulatory right, that, under the previous now we've not to get into too much in our sea regulatory arcane. like.

00:41:38:19 - 00:41:41:15

Chris Keefer

So do you have the self-awareness there, James? But yes. Proceed. Yeah.

00:41:41:15 - 00:42:19:18

James Krellenstein

So let's let's try to keep this before I lose every everyone but you know previous. So the the process upon which if you in thousands are regulated which is this one step licensing process for part 52 didn't come into force until 1987. 1988. And so previously, with the exception of a couple of plants like palo verde and, you know, the snap's plants at Wolf Creek and Callaway, there basically was like each plant was sort of there were some cloned plants like, I think McGuire and Catawba might have used this approach as well as, some of the Illinois plants.

00:42:20:00 - 00:42:43:18

James Krellenstein

Byron maybe. so previous to this, really, every time you went to the regulator, the regulator wasn't necessarily bound by what they previously had said so often. Sorry, I don't know what what that is. I think this is some of this is a mac OS x anyway, so, so previous slides, there's fireworks for the listeners.

00:42:43:18 - 00:42:45:03

Chris Keefer

Yeah, we got some fireworks, but.

00:42:45:05 - 00:42:50:02

James Krellenstein

Looks of fireworks. And this my computer decided to add to,

00:42:50:04 - 00:42:53:16

Chris Keefer

To highlight how exciting this, NRC regulatory segment is.

00:42:53:22 - 00:43:14:03

James Krellenstein

So there wasn't really a standardized design process just. Yeah, put it simply. You'd go file a construction permit file and FSR, an operating license, you know, application. And each time the NRC could say even though they had approved this at a previous plant, didn't mean that it it was able to be regulated again and without some modification.

00:43:14:03 - 00:43:50:09

James Krellenstein

And the argument that the Europeans gave in particular, unlike the EPA, is that local building fire codes, for example, at the finish at go to three, required a huge amount of modification to the EPR design, just so that apparently that it has the most doors and the most number of types of doors. for any building, maybe in Finland or maybe in the world, because they had this Finnish requirement that, fire building code that you have to basically add doors to each room within the, EPR, of different types.

00:43:50:09 - 00:44:19:19

James Krellenstein

And this is once again, law. But, you know, that lack of a standardized design approach that was designed for standardization really did make each plant require to be a bespoke one of the kind. We really have gotten a huge amount from that. First, the NRC, you know, starting in the 70s, in the mid 70s, introducing two processes called appendix O and appendix N, which allowed us to standardize designs, licenses, designs and reference final design approval in the Z.

00:44:19:19 - 00:44:43:10

James Krellenstein

And that's what Palo Verde use. Appendix. Oh, Wolf Creek and Callaway I used appendix M. So that's the first part. And then we had to really come super standardize in 1987 with the introduction of part 52 and design certifications, which basically made the design part of the regulatory code that's literally in appendix to part 52, which describes the Ap1000 design, design control.

00:44:43:10 - 00:45:10:18

James Krellenstein

And then we and then we allowed that to be a standardized process. And as I noted, that allowed these multiple coils that were issued, around the country for new Ap1000 to be a really standardized design without regulatory interference causing design variation. Now, the corollary to that is we saw at Vogel a 188 license amendment request, changing that license design license.

00:45:10:20 - 00:45:33:07

James Krellenstein

The question is, is if you built a new one, what proportion of those license amendments would have to be reintegrated into the, operating license FSR that you would you would be, you know, applying for and building when you're building a new Ap1000. So that's the first thing. The second thing is, is the natural variation that was driven by a couple of things.

00:45:33:08 - 00:46:00:13

James Krellenstein

One was, you know, the highly competitive U.S nuclear steam supply system market, where we had four large fossil fuel companies really trying to insert themselves into the nuclear industry with with different designs that varied significantly. And then you had each utility hiring their own architect and engineer that were building their own turbine island and ancillary systems. So this is the really became bespoke there.

00:46:00:15 - 00:46:22:19

James Krellenstein

The question that everyone needs to ask themselves now is if we're building more reactors and you're a utility or customer or an off taker or developer, what approach are you going to take? Are you going to demand variations for so that the the sort of power plant is built the way that you want to build power plants, or are you going to accept with all the downsides and upsides, a standardized design?

00:46:22:19 - 00:46:58:11

James Krellenstein

Because ultimately it's going to be up to the customer in the United States, absent some real heavy handed federal policy for to actually choose what that design is. And so that goes back to your question, doctor Kiefer, right. Is is what is driving this? Well, it's a combination of historically was regulatory issues, at least in the US has to a large extent be kind of there is a regulatory path that allows the super standardize the plants and lock that design in and and not even have variations after you've got a design cert in, but the question, the ultimate question is going to be the customer who's ordering the plant and developing the plant.

00:46:58:13 - 00:47:05:17

James Krellenstein

Are they willing to basically clone the plant? Exactly. Are they going to demand tweaks themselves? Right, right.

00:47:05:19 - 00:47:14:03

Chris Keefer

Did Fukushima lead to any significant design changes with, the AP 1000? Like, would a future nuclear accident potentially throw this all up in the air again, I'm just trying to think about.

00:47:14:03 - 00:47:38:09

James Krellenstein

The interesting and I think very positive aspects. Although it delayed slightly the issuance of coal issuance for those plants. But the interesting thing is, is that the Fukushima, you know, the the revision of the design control document, Rev 19 of the DCD for Fukushima was actually Docketed, I think like six days before Fukushima happened at least March 4th, 2011.

00:47:38:11 - 00:48:02:08

James Krellenstein

And you had the NRC rather, I think nicely, if I was, you know, not to be overly complimentary of the NRC, basically sort of say afterwards that sort of crosscutting sort of tiger team they put in with the agency. So the, the AP 1000 doesn't really need to have any design modifications for, for the Fukushima accident.

00:48:02:09 - 00:48:27:02

James Krellenstein

Now, I think that was the right decision because the, the one of the great things about the Ap1000 plant is this is a total passive plant that does not require any like emergency diesel generators, at least for the first 72 hours, right, to cope with the station blackout event. So what happened obviously at Fukushima Daiichi was not that the earthquake or, you know, ruined the plant.

00:48:27:02 - 00:48:53:06

James Krellenstein

It was that the enemy flooded the emergency diesel generators and associated switchgear, right, of the plant that prevented the sort of decay heat removal from being removed through the active safety systems. The AP 1000 is designed to passively cool the plant without any offsite or onsite AC power. Right. So this is a, you know, if Fukushima Daiichi unit had been Ap1000, I think it would have been totally fine, right.

00:48:53:08 - 00:49:12:16

James Krellenstein

even if the they had placed emergency diesel generators in the basement because the plant is passive, passively cooled, for the first 72 hours, I mean, after 72 hours, all you have to do is basically refill the water tank, on the top of the containment with seawater or freshwater and, you know, you can continue passive cooling indefinitely.

00:49:12:18 - 00:49:40:14

James Krellenstein

So the NRC ruled there was no design modifications. And indeed, Rev 19 did not get changed at all from that. And that's a pretty impressive, I think, move from the NRC considering how much design changes and regulatory changes happened post Three Mile Island. that happened, in the US, and the fact that the Fukushima Daiichi plants were, were U.S. plant designs, right?

00:49:40:14 - 00:50:04:12

James Krellenstein

Fukushima Daiichi unit number one was not only a U.S. reactor vendor, General Electric BWR three, but it actually a US architecture and engineer, a Basco services that actually designed that plant. Right. So it really was a U.S. plant, although didn't construct it. But Basco designed that the secondary balance of plant for Fukushima Daiichi unit number one.

00:50:04:12 - 00:50:11:10

James Krellenstein

So this was really a plant that was very a very similar design to operating U.S plants today. Okay.

00:50:11:10 - 00:50:14:13

Chris Keefer

Well where do you want to take this from here on in. So we're looking.

00:50:14:17 - 00:50:32:01

James Krellenstein

I think we got off a little bit to this sort of high level sort of stuff. I mean I'm not sure where we, we finished up on, on the though it's been, you know, years since we last had this episode. But, and I have the, the foresight not to listen to my own episodes. maybe I should have listened to the last one.

00:50:32:03 - 00:51:06:17

James Krellenstein

You know, I think what we were. What what I think what we want to talk about here, consume. This is our last episode, God willing, about this topic that, you know, we we really think about, well, what the aftermath was of a vocal three and vocal four. I think, as I said at the beginning, the I believe at the last episode, what is amazing and the kudos need to go to Southern Company, to battle to Westinghouse and to the Georgia Public Service Commission, especially the Georgia ratepayers, for ensuring that the reactor got finished.

00:51:06:17 - 00:51:19:08

James Krellenstein

And I know our friend Patty, I'm trying. Yeah. Yeah, right. Patty is a very big fan. You know, we're we're sort of, person in the public service. I don't know if she's on the public Service Commission of the.

00:51:19:09 - 00:51:20:09

Chris Keefer

Yeah.

00:51:20:11 - 00:51:48:18

James Krellenstein

Maybe candidate for the PSC. You know what? She was really arguing vociferously was, you know, it will always be this way. Always. will Vogel five would be an equal amount of disaster as Vogel three and Vogel four. I just don't think that is true at all, I really don't I think that it is, unless we redesign the plant and make that decision, and the Public Service Commission should never allow that to happen.

00:51:48:20 - 00:52:09:16

James Krellenstein

We have a real opportunity here to go down the cost curve, learn the lessons from Vogel three and Vogel for not just Vogel five. If that ever comes to be, but at power plants, sites across the country if we choose to I think the, the question I want to pose and drive this that we're sort of at the after math.

00:52:09:18 - 00:52:38:20

James Krellenstein

Vogel three and Vogel four is one really not underestimate the impact that this has had on the US nuclear industry. And so I, I would argue maybe the fear that we all have about building new nuclear that utilities certainly have. And it's not even Vogel. I think summer is more of what is driving the fear. There, but also, ask the question that you were kind of exploring on Chris and really talk about that.

00:52:38:22 - 00:53:07:05

James Krellenstein

Well, what is the role of innovation have here? And in my mind, the biggest mistake we could do is try to build six new designs in the US and have six, and maybe there is mini Vogel's occur right where those designs really go through all the learning curve problems that we've had. And I want to just ask us as as nuclear advocates, it's very unlike the United States, to decide on a single design.

00:53:07:07 - 00:53:32:17

James Krellenstein

That is not who we like to think of ourselves as. We're free marketers where buccaneers, right? We want to we want to libertarians or what? We're contrarians. We want to have our nuclear power plant design. But what I'm worried about is we we need to understand that that comes with costs. It comes with cost, Chris, to, be doing multiple reactor designs at once.

00:53:32:18 - 00:54:01:07

James Krellenstein

And certainly that our first of a kind reactor designs and the I don't know of any and I would challenge anyone. On what basis do we have to think that there's any other nuclear steam supply system that is going to be operating at a higher capacity factor than the AP one thousands already have demonstrated themselves at that have other advantages that are going to be able to outweigh the real cost.

00:54:01:09 - 00:54:29:15

James Krellenstein

The real benefits that we've got from a as built design with a reference plan that's operating in the regulatory domain that we have in the United States. That is a compelling question I would ask. And my thesis is that it is that there right now, the step that needs to happen, the most important thing that the United States needs to do is build another Ap1000 and build that thing in seven years, right.

00:54:29:17 - 00:54:51:18

James Krellenstein

That needs to be the focus of it. Otherwise, if we can't deliver on time and on budget, I don't know. We're going to have a real continuing more and more uphill battle. But I think the highest probability, as I've talked about, I think on a multiple episode of us doing is learning the Vogel episode, making sure that the Georgia taxpayer sort of investment and ratepayer did does not go to waste.

00:54:51:18 - 00:55:01:10

James Krellenstein

And some people in Florida as well. But that is really, really critically important here. And I want to just say that's that's what I'm planning on doing, and trying to work on.

00:55:01:12 - 00:55:21:09

Chris Keefer

Well, you know, I think it's interesting in terms of, that kind of thought leadership, kind of like intellectual contagion of, of a paradigm shift. you know, certainly the smart paradigm has been dominant for the last, I'd say, decade or so. I've been frustrated with it because at least in terms of the public discourse and conversation, I haven't found it adequate.

00:55:21:09 - 00:55:41:03

Chris Keefer

I'm sure a lot of really smart people are sort of talking behind the scenes, but so far it's felt in the public domain to be largely a branding exercise. And so, you know, in terms of my, my journey with the couple, trying to understand these issues, seeing the value proposition of nuclear, seeing how often, it doesn't go right in terms of construction.

00:55:41:03 - 00:55:59:03

Chris Keefer

It goes very right in terms of operation almost all the time. But in terms of construction, that's led me towards an acceptance that economies of scale are real. that modularity is great. if you can pull it off, that standardization, makes a lot of sense standardizing on really as few designs as possible if they're designs that are operating well.

00:55:59:05 - 00:56:11:02

Chris Keefer

and that the focus in terms of innovation should really be on construction, innovations and project management. again. Right. Yeah. So I mean, I think that's that's kind of my program. I think it's, it's it's starting.

00:56:11:02 - 00:56:31:17

James Krellenstein

To what, you know, I think that's, that's you and I, I mean, and, you know, I would even say we're friends at this point, you know, we we, I think live in this bubble. we don't live in the bubble. I don't think that that's, you know, but but that is not a widely shared view outside of this, this, ecosystem.

00:56:31:17 - 00:56:53:05

James Krellenstein

Or maybe it's more and more shared in the, in the nuclear world. But one of the things that I think what we're trying to do is build a developer organization. One of the key things that needs to happen that, you know, if you look at the signal that we've had historically in, U.S nuclear project deployment. So one of the key factors is how well the utility has been able to manage that.

00:56:53:05 - 00:57:14:03

James Krellenstein

You know, the problem is where does that project management innovation, construction management innovation lie. And it's very, very hard to make the EPC the engineer or the construction firm or even the reactor vendor do that because the reactor vendor wants to isolate the risk, especially in the United States, of of that, they want to provide their scope and only their scope.

00:57:14:05 - 00:57:43:01

James Krellenstein

The engineering and construction firm doesn't want to take the liability in, probably wants to build you, you know, basically do change orders to make more money on that offset. So it really often is going to come down to the development organization that's bringing all these folks together to be able to figure out, how to actually build this project on time and on budget, and manage the EPC and manage the nuclear island, just like if you're building out addition to your house.

00:57:43:01 - 00:58:04:00

James Krellenstein

I mean, it's a it's a limited, limited comparison, but I mean, my house is not as big as or expensive as an AP 1000. It's almost there. But, you know, the that you have to manage your architect, your construction crew, your contractors, right, to make sure that everyone's working together and that all the interests are lined in the United States.

00:58:04:00 - 00:58:25:15

James Krellenstein

One of the biggest problems that we've had is that historically in nuclear power, that no developer base project delivery, it has been hit only based, out of the utilities and the utilities because they only have so much load that their servicing can only build so many reactors before they've met their, their limit. So even at their needs.

00:58:25:15 - 00:58:47:19

James Krellenstein

So even as we've talked about all this learning curve that we've had, the lack of a learning curve in many ways in the United States has also been structural, because we do not have a centralized organization that is deploying across the country and retaining all the lessons learned to managing a back door or Sergeant Lundy or United managing or Westinghouse managing the General Electric.

00:58:47:21 - 00:59:13:22

James Krellenstein

Right. to be able to deploy that project on time so you can think about it not just in terms of standardizing the design, but literally standardizing the organization that can actually retain all these lessons and deploy it from one site in Florida to another site in Michigan, to another site in Nevada to New York. Right. That hasn't historically happened because there's different utilities, each one of those things, and they're managing the construction of the plants.

00:59:14:00 - 00:59:30:01

James Krellenstein

So we need to figure that question out as well. And I think that, you know, if you're talking about what I'm working on, as, you know, the company I'm working on is exactly not to do too much spon con here. Like, is is really trying to figure out how do we build a development organization that's not Westinghouse. It's not a back door.

00:59:30:05 - 00:59:51:15

James Krellenstein

It's not a utility, but more in the model of an independent power producer for, for nuclear projects like what you have in the gas turbine business that has been so successful at being able to rapidly and affordably and predictably deploy combined cycle gas turbines around the world or around the country. Very predictable. We on time and on budget right now.

00:59:51:15 - 01:00:10:00

Chris Keefer

I was going to ask about a precedent there. and I was I was, you know, thinking, grasping at straws of, you know, EDF, for instance, during, during the Messmer plan, that you would have that continuity and obviously that's not going to happen in the States, for, for obvious political and institutional reasons. But you're saying within the gas industry, that's, that's more common in terms of gas power.

01:00:10:01 - 01:00:41:18

James Krellenstein

It absolutely happened right within. You know, if you look at most of the new generation that's happened in the deregulated power markets, it's not by, you know, Con Edison like I am. If you're in New York, it's by merchant independent power producers Calpine, competitive Power Ventures and so on who have gotten really, really good at siting about about, developing about, you know, managing Siemens and General Electric in this case for combined cycle gas turbine deployment, managing the permitting process, managing the offtake.

01:00:41:20 - 01:01:20:16

James Krellenstein

you're arranging with the natural gas purveyors and the transmission. We really do need to see that happen in the nuclear space. no matter which reactor technology, by the way, we deploy. Because what you see is the real successful nuclear power plants that have been deployed historically really, really are done by the utilities that have done this, you know, have built for reactors previously or built a dozen coal power plants in the case, like Arizona Public Service that have the onsite engineering, onsite QA, onsite construction management sort of skills, that's not only put together as a person, but that machine has run through this a couple of times, gets that real world experience

01:01:20:16 - 01:01:44:22

James Krellenstein

and retains that culturally. And, you know, that's one of the reasons why I think southern, as a deployer of the next Vogel plant, is a very good option because the organization at Southern Nuclear out in Alabama really has actually gone through this. And God, they had the scars to show for it. A couple of times. So, you know, that ability to deploy another unit really is a smart idea.

01:01:45:00 - 01:02:04:11

Chris Keefer

And I mean, I'm thinking of other organizations that are running multiple projects, like opg's integrated, project delivery, lots of lessons, certainly to learn there. when we were up at the Bruce touring together, actually, they were talking about the, Bruce, units as Bruce, a unit one and two refurbishments where they just sort of handed off responsibility to Atomic Energy of Canada Limited at the time.

01:02:04:11 - 01:02:17:22

Chris Keefer

And another contractor and a big curtain went up and lots of delays happened. But that that sort of project management getting involved, multiple entities coordinating one team, one goal, seems to be something that is helping us success.

01:02:18:00 - 01:02:24:15

James Krellenstein

That is, in my mind, the innovation that we need right now in the in the nuclear space period. And the story. Right is it's.

01:02:24:15 - 01:02:42:07

Chris Keefer

Sexy enough, though, James. Is it sexy enough? Are people interested? Is it. You know what I mean. It's it's more it's more interesting to to revolutionize nuclear energy and come up with a, you know, disruptive nuclear steam supply system that can, you know, answer all of nuclear's problems where there'll be no waste and no weapons and, you know, just beautiful clean power and rainbows.

01:02:42:07 - 01:03:01:22

James Krellenstein

Well, I, I think that actually like water reactors and the proliferation part are as good as anything I've seen in resisting proliferation potential. Right. no, I'm not going to go any further there. I don't think no one's ever made a, like a bomb out of a light water reactor. Yeah. that's saying, you know, you know, North Korea.

01:03:01:22 - 01:03:19:02

James Krellenstein

I mean, nobody already has bombs. They don't have, like, water reactors. And we're going to remember, like the US and the South Koreans were building the North Koreans, you know, two light water reactors because they thought the proliferation resistance was so high. But my one sorry not to go on that. So let's go back here and ask this question.

01:03:19:04 - 01:03:41:18

James Krellenstein

Are is it sexy enough? And, you know, I say this as someone who, as I said, you know, as a kid likes to have my my birthday parties as an eight year old, nine year old, ten year old at power plants, right. And I if you had told that ten year old boy that time would be asking in 30 years or 20 years, sorry, I'm not that old, you know, 20 years.

01:03:41:18 - 01:04:01:20

James Krellenstein

Oh, is it sexy enough that you know your power plant is sexy enough? Power plants maybe aren't sexy. And I don't know how to say this and, like, what? You know, what with the famous story that happened is by a woman. A girl at the time who was a classmate of mine. We'd had this tour with the nut of a nuclear plant because it's very hard to get into nuclear plants at that point.

01:04:01:20 - 01:04:28:18

James Krellenstein

But I've like the waste to energy, like refuse incinerator power plant that was local to me where I was. And she just thought power magically came out of the wall. So you put up sheet rock and you put it in a power divined out of the well, because that's a testament to not only how unsexy power plants are, but how good they are at what they're doing, power plants, work, and the we hope and do the grid works.

01:04:28:18 - 01:04:59:19

James Krellenstein

You plug in and there's power, right. And the power's relatively affordable. And most people don't think about it at all. And power plants are sort of they're not the sexy sports cars that you you know, you know, you they're not your your Lamborghini or Ferrari. What we're hoping here are for you like literally Toyota Corolla or, I don't know, some affordable or Ford Focus is or model T's things that can deliver power reliably, cheaply and safely.

01:04:59:21 - 01:05:23:06

James Krellenstein

Right. And and that doesn't necessarily lend itself to sexy ness when I'm thinking about, you know, who I want to hook up with at a bar, I'm not thinking, can this person. Well, I mean, maybe some people are, but like, sexy. This is not like, is this person reliable and affordable? Like, that's just not that's that's not what turns me on.

01:05:23:06 - 01:05:25:02

Chris Keefer

That's that's life life partner material.

01:05:25:02 - 01:05:41:23

James Krellenstein

But yeah, that's me life partner material. But that's not like, that's not what I would consider sexy. So like, it's not like, you know, you don't think of like, I don't know, a sexy girl or a sexy guy as, like the. Oh, that person like, you know, there's that Vogue's, I don't know, Playboy spreads. I'm sorry.

01:05:42:02 - 01:06:01:02

James Krellenstein

The gay male part of me is pretty. I try to make it more relatable like that. Like. Like, you know, whatever you people watch for, you know, wherever the sexy girls are, right? Like. Like it's not. You're not saying, like, that girl looks reliable, like, you know, and that's what I'm trying to say. And I'm trying to be jokey about this, but that's not what powerplants are.

01:06:01:04 - 01:06:34:12

James Krellenstein

That's not what's this engineered? This is not a consumer facing product. We're never going to have nuclear power plants in your backyard. Right? I mean, like, not literally in your backyard. We're never going to be buying nuclear power plants as consumers, right? unless you're very, very wealthy. Right. And the question is, is, are is focusing on something sexy, the right view, or is it focusing on something that is going to be able that utilities are going to be able to want to buy power from?

01:06:34:14 - 01:06:54:05

James Krellenstein

And I think there's a lot of things that aren't sexy that make a lot of money. And that's what I think we need to be looking for here. I don't think sexiness is what's going to sell us. I think it's, you know, a combined cycle gas turbine is not sexy, I don't think, but they, they I've been extraordinarily, extraordinarily successful.

01:06:54:05 - 01:07:13:09

James Krellenstein

Right. Solar panels are not sexy at all in my opinion. They're just not wind turbines. Not sexy at all. Hydro dams, not sexy. That's what we're we're looking for here. And maybe we're too focused. I mean, too disruptive and not doing what the market actually needs.

01:07:13:11 - 01:07:31:00

Chris Keefer

Let's, let's leave it there with the sexy talk. James, it's been fun. It's been fun. I'm sure we'll find new stuff to talk about soon. you know, I guess we had the AI Revolution show. I think that's an interesting reference point in terms of increasing demand. I remain skeptical about climate being a sufficient driver to do.

01:07:31:01 - 01:07:54:09

Chris Keefer

I think the hardest form of power generation and certainly what's what's what's first, like what's frustrating to me is, you know, China has, and Europe now have very strong energy security reasons to go nuclear. they have every reason to, but the Chinese, you know, we're no longer in this globalization heyday of the noughties, and can't sort of share, lessons learned in supply chains with them.

01:07:54:11 - 01:08:10:23

Chris Keefer

and, I mean, Europe just seems like such a bloody mess right now. and it seems to be really foundering on the nuclear side. I wish them all the best. I hope new things come along. Some good news comes from there. not that there's great news out of the US, but, I'm just worried that there's not the, the actual energy security imperative to to get moving on this.

01:08:11:01 - 01:08:32:16

James Krellenstein

Well, I think the question and this is a great show, it's a great article about this, you know, is the what is going to you like, how serious are Google, Amazon, Microsoft at all about decarbonization. Right. Because you know, the hardest part that I think we've talked about before, it's natural gas right now is at very, very cheap prices.

01:08:32:18 - 01:08:52:22

James Krellenstein

and natural gas that you could add some solar wind. Do you know, load shifting, fuel saving, whatever you want to call it. The critical question I need to ask you is, is in this new AI load, is there going to be are the companies going to put money up for low carbon power? And if they are, then there's a real space for nuclear.

01:08:52:22 - 01:08:57:13

James Krellenstein

But if they're just going to say, you know what, we're fine with building gas turbines.

01:08:57:15 - 01:08:59:22

Chris Keefer

With a little virtue signaling on the side. Yeah.

01:09:00:00 - 01:09:01:02

James Krellenstein

Yeah. What with a little.

01:09:01:02 - 01:09:01:10

Chris Keefer

Virtue.

01:09:01:12 - 01:09:12:16

James Krellenstein

Is a really hard economic case. Now, maybe an A ten units, 15 units will be cost competitive. I believe that's possible, but it's going to be it's going to be really hard on those first couple of units to be cost.

01:09:12:18 - 01:09:19:07

Chris Keefer

Yeah. I'm just waiting for, I'm waiting for peak shale and, prices to go up before I get too bullish. But that's the cynic in me.

01:09:19:09 - 01:09:20:12

James Krellenstein

That could be 100 years from now.

01:09:20:13 - 01:09:22:07

Chris Keefer

I know, I'm aware.

01:09:22:09 - 01:09:31:00

James Krellenstein

So I mean when when your your, you know, when I'm dead, you know, peak shale might be a hundred years from now. You know, I don't think we can bet on that.

01:09:31:01 - 01:09:33:09

Chris Keefer

Okay. Geez. We're drifting. We'll talk again soon.