Sep 9, 2024 · 1h 18m · bg2-pod
Ep15: Inside Diablo Canyon Nuclear Power Plant | BG2 w/ Bill Gurley & Brad Gerstner · Bg2 Pod
Brad Gerstner · 30m spoken Bill Gurley · 27m spoken Maureen Zawalnik · 13m spoken Gavin Newsom · 17s spoken Elon Musk · 11s spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In Episode 15 of the BG2 Podcast recorded on location at Diablo Canyon Nuclear Power Plant, hosts Brad Gerstner and Bill Gurley analyze the critical role of nuclear energy in powering the artificial intelligence revolution. Joined by plant leadership, they evaluate regulatory hurdles, global cost disparities, and strategic solutions required to revitalize American nuclear infrastructure.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Brad and Bill hold 79.4% of the talking time here. How this is scored →
Brad and Bill as informed peer 5.9 Guest teaching 1.5 Guest disagreement 0.3 Brad and Bill pushing back 0.6
speaking balance: gold is Brad and Bill, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 45:01 Gurley rejects protectionist intellectual property claims
Gurley firmly challenges common industry grievances regarding China and Korea utilizing American reactor IP, arguing that lower landed energy costs are what actually matter globally.
Hardest push from Brad and Bill ▶ 1:05:30 Gurley pushes back against incremental subsidy policiesGurley pushes back on the idea that modest loan incentives like those in the CHIPS or IRA acts are sufficient, insisting only an overhaul on the scale of the Manhattan Project can solve the cost problem.
Biggest teaching moment ▶ 12:41 Zawalick clarifies reactor longevity and renewal mechanismsZawalick corrects Gurley's assumption that nuclear plants suffer from finite engineering lifespans, demonstrating they can operate for 80 years through continuous maintenance and NRC license renewals.
Brad and Bill hold their own ▶ 39:07 Gurley outlines insider breakdown of nuclear cost escalationGurley details an informed four-part framework dissecting the NRC's hourly fee model, environmental litigation risks, and the loss of industrial learning curves in US nuclear construction.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Brad and Bill as informed peer | Guest teaching | Guest disagreement | Brad and Bill pushing back | Why |
|---|---|---|---|---|---|---|
| Setting the Stage: Analyst Perspectives and Nuclear Energy Context | 5 | 0 | 0 | 0 | Brad Gerstner and Bill Gurley set up the episode, acknowledging they are tech investors looking at nuclear power through an analyst framework. They cite high-level figures regarding Diablo Canyon's power output and discuss their research process. | |
| Diablo Canyon Overview with VP Maureen Zawalick | 4 | 6 | 1 | 0 | Maureen Zawalick explains Diablo Canyon's history, safety culture, and the changing assumptions between 2016 and 2020 that made decommissioning impractical. The hosts listen attentively and ask clarifying questions on renewable replacements. | |
| Extending Diablo Canyon's Operations and Co-Locating Data Centers | 4 | 7 | 1 | 1 | Zawalick breaks down the plant's 90%+ capacity factor and details the 20-year license renewal process with the NRC. Gurley openly admits he previously misunderstood nuclear plants as having inherently fixed lifespans rather than being perpetually upgradeable. | |
| Policy Realities, International Progress, and Nuclear Waste Storage | 6 | 6 | 1 | 1 | The conversation covers state policy nuances, global operational knowledge sharing, and waste management. Zawalick delivers a striking visual fact that all US commercial nuclear waste would fit on a single football field within the goalposts. | |
| Operational Excellence, Community Roots, and Interview Wrap-Up | 4 | 2 | 0 | 0 | The interview concludes amicably with praise for the plant's operational excellence and PG&E leadership. Gerstner reiterates the imperative of securing dense power for Silicon Valley and AI. | |
| Historical Context of US Nuclear Power and Global Stagnation | 7 | 0 | 0 | 0 | Gurley and Gerstner review the broader historical data of global nuclear builds, comparing France, Germany, China, and South Korea. Gurley highlights the stark cost disparity between Georgia's Vogtle ($13B/GW) and Chinese reactors ($2.5B/GW). | |
| Deconstructing the US Nuclear Cost Driver and Build Delays | 8 | 0 | 0 | 1 | Gurley presents a four-part breakdown from an industry insider on why US nuclear construction is so expensive, emphasizing fee-based NRC regulations, environmental litigation, and lack of repeatable scale. Gerstner maps these into three primary cost buckets. | |
| Global Energy Security and Hyperscaler AI Power Demands | 7 | 0 | 1 | 2 | Gurley pushes back against knee-jerk anti-China rhetoric and US intellectual property defensiveness, noting South Korea delivers the same low costs. Gerstner contextualizes this with national security and AI cluster power demands. | |
| Gen IV Technology, SMR Prospects, and Hyperscaler Consortiums | 7 | 0 | 0 | 1 | The hosts examine Gen-IV reactors and SMRs, reviewing TerraPower and naval nuclear reactors. Gurley analyzes utility conservatism and Power Purchase Agreements, identifying high regulatory upfront fees as a barrier for venture startups. | |
| Plant Economics, National Initiatives, and Bipartisan Consensus | 7 | 0 | 0 | 1 | Gurley proposes a Manhattan or NASA-style government project to zero-base the regulatory apparatus. A montage of political figures (Newsom, Musk) demonstrates bipartisan support for keeping existing plants open. | |
| Proposing a Statement of Principles for Nuclear Power | 6 | 0 | 0 | 1 | Gerstner outlines concrete principles including moratoria on plant shutdowns and clustering AP1000 builds. Gurley expresses skepticism that incremental NRC reform from within will achieve necessary cost reductions. | |
| Analyzing Red Tape, Litigation, and Diablo Canyon's Challenges | 7 | 0 | 0 | 1 | Gurley cites Governor Shapiro's expedited I-95 repair as proof that waiving red tape and litigation risk enables rapid building. Gerstner points out the irony of environmental lawsuits leading to higher coal imports. | |
| Proposing an Open-Source Standard for SMRs | 7 | 0 | 0 | 0 | Gurley proposes creating an open-source, IP-free standard for SMRs based on US Navy reactor designs, comparing it to Linux and the Open Compute Project. Gerstner summarizes their 10-week investigation takeaways. | |
| Final Thoughts and Episode Sign-Off | 3 | 0 | 0 | 0 | The hosts wrap up with casual banter regarding college football game day signs and sign off. |
Statements from this episode (32)
Gerstner: Diablo Canyon operates two reactors generating 2.5 gigawatts
“We're sitting in you know, probably your three wood distance from two nuclear reactors that are banging out two and a half gigs of clean power.”
Gerstner: Diablo Canyon produces ~9% of California's energy at 6¢/kWh
“It cost sixteen billion dollars to build both reactors. It went online in 1985. It's the state's single largest power station. It generates about eight to nine percent of total energy, about 20% of all the renewable energy in the state, at a cost of about six …”
Zawalick: California renewable projects failed to match replacement expectations for Diablo
“This, the projects to replace, the renewable projects to replace Diablo have not made the progress that I think the state thought it would back in 2015, 20 16.”
Zawalick: PG&E Applied for 20-Year NRC License Renewal for Diablo Canyon
“Unit one's current license expires November second of 2024.
And it'll be really interesting to look at what's going on November third and fourth with our grid had we taken unit one off.
So we're right there, right?
unit two's current license expires in August…”
Zawalick: Diablo Canyon Operates at a 90%+ Capacity Factor
“Nuclear's capacity factors, you said efficient, you know, their capacity factors, Diablo's, you know, upwards of 90%, right?
And, ah, we have had our units run at 93, 94%.
You can't mess with those numbers.
We're available 24 seven, 365 days a year, rain or sh…”
Zawalick: Decommissioning Diablo Canyon Is 'Utter Madness'
“So it would be utter madness and scientifically wrong.
and I say that from 35 years in the industry as a nuclear engineer with confidence.”
Gerstner: California Should Build AI Data Centers at Diablo Canyon
“If we're going to build data centers in the state of California, as I was walking around here today, I was thinking to myself, they ought to be building data centers right here.
You have plenty of excess land.
And plugging them into these incredible, you know,…”
Zawalick: All US commercial nuclear waste fits on one football field
“You roll up all of that footprint, and you got to see it's very small and you take all of the over hundred units in the United States, it would fit in the size of a football field up to the goalposts.”
Zawalick: Reprocessing spent fuel allows 80% to 90% to be reused
“Now you start reprocessing that, and you have a, again, a federal policy change from the Carter administration to allow for reprocessing like France does. You can get about, you know, you hear numbers between 80, 90% Of, you know, isotopic, you know, use of be…”
Gurley: Diablo Canyon is a massive turning point for US nuclear industry
“And I do think Diablo was this kind of massive turning point for the industry, for the nuclear industry in the US.”
Gerstner: Power is the primitive for AI and drives China's nuclear race
“Power is the primitive for AI, and that's why China is heads down in this race, and they're taking our technology, right, and they're, you know, they're improving it”
Gerstner: US nuclear provides 31% of global output and 20% domestic power
“We commissioned our first nuclear electricity generating plant in 1957. The majority of American plants are built in the seventies and eighties. We have 94 plants today online representing 31% of the world's total nuclear energy production. It's 20% of total U…”
Gerstner: China is expected to pass US nuclear power generation by 2030
“China's on track, on the other hand, to bring on more capacity capacity in the next 10 years than we've brought on in the last 40 years. They're expected to pass us in terms of total power generation from nuclear by 2030, or thereabouts.”
Gurley: US Vogtle reactors cost $13B per gigawatt versus China's $2.5B
“We recently brought on two new plants in the U.S. Vogel three and four in Georgia, and the total cost of that was about thirty billion for 2.2 gigawatts. It turns out over thirteen billion dollars per gigawatt. The plants in China that are the equivalent level…”
Gurley: South Korea builds nuclear at the same cost as China
“South Korea is a democracy, A friend of the United States, they're at the same delivered price point as China, and they're doing it at scale, and they're starting to export their technology.”
Gurley: NRC charges operators hourly fees for regulatory oversight
“The NRC is a fee-based regulatory. So you literally pay per hour to have them come regulate you. Right, right. And so those costs are extremely high.”
Gerstner: Unlikely US nuclear build costs fall 70% to compete with gas
“The idea that we're going to bring the cost of building one of these things down by 70%, which is kind of the target needed to make this competitive in the open market with gas and everything else, I think is very, you know, it's hard to see.”
Gurley: Westinghouse is suing to block South Korean reactor exports to Czechia
“Westinghouse, who was the company That, that originally designed level three fission in the US is suing to try and prevent them from delivering to Czechoslovakia.”
Gerstner: US baseload power growth will surge over next 5 to 10 years
“When you model out the need for data center capacity over the course of the next five to 10 years, you realize for the first time in really two decades, the US's need to grow its baseload power generation is going to go up significantly, significantly faster t…”
Gurley: Nuclear startups pay $60M in NRC fees for first approval
“The NRC, which we haven't talked much about, but the Regulatory Commission here in the US is fee-based, and all the people that are playing in this market I've talked to say you're probably sixty million to first approval. Just on fees, the startup's gonna pay…”
Gerstner: Hyperscalers Spend $250B Annually on AI CapEx
“I mean, if they're spending two hundred and fifty billion dollars a year on CapEx associated with AI, that is emperor level spending.”
Gerstner: Diablo Canyon Was Originally Provisioned for Six Reactors
“They built two nuclear reactors here. You know, this site was provisioned for six. For six reactors.”
Gurley: Diablo Canyon's inflation-adjusted cost is half that of Plant Vogtle
“In the mid eighties dollars, the plant was built for 5.5 billion. So right around 2.4. Yeah. Unfortunately, in today's dollars, that's 6.4. But 6.4 is still half of 13, which is Vogel.”
Gerstner: The US Navy operates roughly 100 floating small modular reactors
“We basically have a hundred floating SMRs in our naval fleet.”
Gurley: The US needs a Manhattan Project-scale effort to fix nuclear power
“The first thing that comes to my mind, and maybe this could be applied to both SMRs and level three scale out, is we could choose to do something more like a Manhattan Project or a NASA Project, and you hinted at this already, where you get the best and bright…”
Musk: Shutting down existing nuclear power plants is total madness
“It's crazy to shut down nuclear power plants. I can't emphasize enough. Please do not shut down the nuclear power plants. Please reopen the ones that have been shut. This is total madness to shut them down. Total madness.”
Gurley: NRC leadership considers keeping existing plants online a sufficient win
“And one thing that becomes very apparent is like, he's like, considers it a win that we've gone from a negative reduction to just keeping everything online.”
Gerstner: US export controls prevent nuclear companies from building and exporting
“Well, we have export controls in the United States, which are preventing a lot of these companies from building and exporting.”
Gurley: Building next-gen nuclear requires ground-up deregulation and litigation immunity
“And if you want to go build this next generation level three plant, I think you've got to rewrite the regulation from zero ground up, like make it, Thinner and tighter. And two, I think we've gotten to the point where we got to say this is so important you can…”
Gerstner: South Korea's nuclear regulatory framework is modeled on the US
“Because in South Korea, Their national regulation and the regulatory body that oversees it all is modeled on the US, ok?”
Gerstner: Decommissioning Diablo Canyon causes California to import more coal power
“Ironically, right, if you decommission Diablo, you know what the state does? It imports more coal-produced power.”
Gurley: Open-sourcing SMR designs eliminates single-source risk for utilities
“The reason to make it IP free, Is to get everyone working on the same platform, to remove single source dependency risk, and to get the utilities confidence that this thing's gonna be successful, and gonna go forward, and to get everyone behind it. So do the L…”