The Exchanges

Q But politicians don't see it that way. There is a steady drumbeat of support for domestic manufacturing. Why have tariffs dominated the political landscape in solar for the last decade?

A Well, as ineffective as tariffs have been over the last decade, no, they've been ineffective in the sense that there hasn't been a large increase in U.S. solar manufacturing. It's an easy Dogmatic principle to get behind if you're a politician. Of course, we all want more solar manufacturing. Of course, we all want more solar employment. However, I have to say that the United States is no more suitable to solar manufacturing than it is to iPhone manufacturing. We are a, we are not a basic manufacturing country, and it's difficult to imagine the Us creating a manufacturing hub in solar, despite the righteousness and virtue of that happening. The energy transition does not happen in the United States without imports.

AI assessment note: “It's an easy Dogmatic principle to get behind if you're a politician.”

Q So we're going to be sort of unpacking the small modular and micro reactor space. And Eric, according to the Axios deal tracker, venture investors have put about three billion dollars into this category in the last couple of years. And that includes like people such as Bill Gates, Sam Altman of OpenAI. How do you define this category and the private investment activity we're seeing in it right now?

A Advanced reactor kind of means whatever you want it to. Um, many of the new advanced reactor designs are not exactly new. They date back to 60 years, uh, to the Manhattan Project and the early development of nuclear. So things like fast breeder reactors, gas-cooled reactors. We have experience with all of these for many, many years. The venture capital funding that's gone into Advanced reactors has come, like you said, from Bill Gates, Sam Altman. I think at a certain point, when you're poisoned by your billions, you either invest in longevity, rockets, or fission, or fusion, or you buy a newspaper. That's what, that, it's, buying a basketball team is old hat, but I think the, the problem with the venture capital going into fission is that it's not the same as Going from Cobalt to Fortran or a new Python compiler, we have these hordes of software developer billionaires thinking that they can disrupt the nuclear industry just like you can disrupt the software industry, and I think they're going to be sadly disappointed very soon.

AI assessment note: “the problem with the venture capital going into fission is that it's not the same”

Q Eric, you've written about this goal. What was your reaction to it?

A Well, climate change requires bold scale-up, and certainly tripling renewables or tripling nuclear qualifies, and, and so these are the types of big ideas we need to, to confront climate change. I would suggest that the only country that's capable of tripling their nuclear power wasn't a signatory to this agreement. It's China, who is the only one who really seems like it has a chance of doing that. China has 22 nuclear plants under construction today. Um, 22. And 70 planned. So China is ready to double their nuclear by 2035. They'll do it. China is, yet they did not sign on to the COP 28 agreement. I think we can, the globe can triple solar easily. In fact, we can talk about that later, but that's, that's a, that's a, that's easy. I don't think the globe, the United States, certainly has addressed the cost issues of getting nuclear down to 6000 dollars per kilowatt to build, and like Lara said, not having a positive learning curve where the, uh, the, the, each additional build is more expensive than the previous one. That's not the way that's supposed to work, and we have to do that with an order book. We can't have that with 10 possible designs that we're working on that are all first of a kind. It has, we have to have an order book of Five AP 1010 AP 1000, so that we can get a supply chain going and actually realize some economies of scale and some actual learning curves in …

AI assessment note: “climate change requires bold scale-up, and certainly tripling renewables or tripling nuclear qualifies”

Q All right, let's go to our final segment of the show, where we pick a story that tells us something about the near or far future. It's called The Forecast. It doesn't have to be nuclear-related. Um, Eric, what are you thinking about?

A Yeah, there's been some recent stories about what the global, um, total for solar will be, um, in twenty-twenty-three, and the number's over 400 gigawatts, um, and so let's do a little approximate math. That's a gigawatt a day. Over your weekend, the Globe installed two gigawatts a day. The nuclear industry, and I, I'm sorry, the comparison doesn't make the nuclear industry look good, but the nuclear industry grid-connected About four gigawatts of nuclear to the grid this year. That's four days. I realize, apparently, the sun does go away, and wind does stop, so thank you for that note. But I realize it's not apples and oranges when we're talking about nuclear and solar, but the sheer volume that's coming from solar these days, a gigawatt a day, that's going to start to add up. And in a few years, you're talking about terawatts, and in a decade, you're talking about several terawatts. I, I don't think people are, we're, we're in this water. It's happening every day, and I don't think people realize what the, what, what it's gonna be like in five years. We're gonna have amazingly cheap, abundant solar. Combined with storage, we may not need all of these advanced energy ideas.

AI assessment note: “there's been some recent stories about what the global, um, total for solar will be”

Q But that was not the only near-death experience for Tesla, was it?

A No. So, in their life as a public company, in, and their effort to scale up from tens of thousands of cars to hundreds of thousands of cars per quarter, Tesla went through what Musk described as manufacturing hell, where he claimed to be sleeping under his desk and turning screws on the assembly line, along with the rest of the workers. And in these years after they were, after they went public, they had some lean years, and they were also Not producing numbers that put them on the map as a real car company, but after those lean years, Musk and company have gotten to the point where they're building hundreds of thousands a quarter. Recent, these days, it's 200,000 per quarter. These are not Toyota numbers, but they are a high-end luxury car company for sure. They sell a lot more than Ferrari.

AI assessment note: “No. So, in their life as a public company... Tesla went through what Musk described as manufacturing hell”

Q But politicians don't see it that way. There is a steady drumbeat of support for domestic manufacturing. Why have tariffs dominated the political landscape in solar for the last decade?

A Well, as ineffective as tariffs have been over the last decade, no, they've been ineffective in the sense that there hasn't been a large increase in U.S. solar manufacturing. It's an easy Dogmatic principle to get behind if you're a politician. Of course, we all want more solar manufacturing. Of course, we all want more solar employment. However, I have to say that the United States is no more suitable to solar manufacturing than it is to iPhone manufacturing. We are a, we are not a basic manufacturing country, and it's difficult to imagine the Us creating a manufacturing hub in solar, despite the righteousness and virtue of that happening. The energy transition does not happen in the United States without imports.

AI assessment note: “It's an easy Dogmatic principle to get behind if you're a politician.”

Q to cost in some way. And so the industry is grappling with a lot of different issues right now. High interest rates Rising commodity prices, limited supply chains, fuel availability, and this regulatory environment that has been slow to adapt to new technologies. Um, so Eric, when you look at some of these setbacks, do you put these stories in the same pool of problems, or are they very different?

A Well, the three, the three companies you mentioned are vastly different, uh, points in their corporate development and have vastly different technologies, and the three problems they Encountered were, are also, they're all a population of, of one. Um, there's, there's no, there's no commonalities between those stumbling blocks that they've, they've hit. But you mentioned the, the New Scale. Let's make a differentiation between New Scale and Oklo. New Scale sort of represents the old nuclear club. It's a modification of a light water reactor of which we have, we have 90 in the United States. Um, it's, it's something we understand, the fuel we understand, uh, And the, the new scale is a integrated, smaller, although small is not the right word to be using with their SMR. It is not, I'm sorry, I know I'm jumping around. So if the SMR from new scale represents sort of the traditional mode of thinking, the microreactor from Oklo is a, a completely different way of tackling nuclear.

AI assessment note: “there's no commonalities between those stumbling blocks that they've, they've hit.”

Q Yeah, so why did this new scale deal fall apart? Let me start there.

A Most of the reactors we're talking about today are what Admiral Rickover would call paper reactors, and this is a cliched memo from Admiral Rickover, but he makes a big distinction between, this is, he's not with us anymore, and this is in the, probably the, the forties, but paper reactors are not being currently built, they're simple, they're light, um, they, uh, are cheap, small, as opposed to actual reactors, which are being built now, are behind schedule, um, They're very expensive, large, heavy, and complicated. Um, and all of the reactors in the advanced reactor population are paper reactors. We haven't built them. We haven't tested them. There's many, many obstacles for us getting to advanced reactors. I also would suggest that the, the S in the small modular reactor that NuScale is building, I wanted to find that. The, the individual module, the The modular reactor from NuScale is 76 feet tall, so that's not exact. If you're thinking it's the size of a bread box, it's not. It's 76 feet tall, and when you're building a twelve-pack of these modular NuScale reactors, the size of the civil works that you have to engage in to site these is Enormous. In fact, it's larger than the size of a typical 1.2 gigawatt light water reactor.

AI assessment note: “size of the civil works that you have to engage in to site these is Enormous.”